Toll rakes in £1 billion but is it good value?

Some time last summer, or maybe early autumn, a London motorist provided the billionth pound of revenue under the Mayor's congestion charge.

Whether it was a daily £8 fee or a fine for non-payment we shall never know. The milestone went unmarked.

But it does highlight the huge financial scale of the great congestion charge industry.

Five years on from its launch, revenues are running at around £250million a year. In the 2006-07 financial year they accounted for 8.5 per cent of Transport for London's earnings, slightly down from 9.3 per cent the previous year.

Whether the scheme is providing good value for Londoners, taxpayers and society as a whole, however, is still a matter for debate. Even its most ardent supporters concede the C-charge is an expensive, clunky, even primitive, form of road pricing.

Costs ate up almost two-thirds of revenue, leaving a "profit" of just £89.1 million.

This was well down on the previous year's record surplus of £107.4 million, partly due to the costs of setting up the western extension into Kensington and Chelsea.

Tony Travers, director of the Greater London Group at the London School of Economics, said: "Any other tax with underlying costs as high as the congestion charge would be considered untenable.

"But in this case they are regarded as acceptable because of the other benefits that flow from it."

A detailed cost benefit analysis carried out by TfL last July found overall social benefits - mainly more freely flowing traffic - outweighed costs.

The first five years have provided rich pickings for the private-sector companies involved.

Capita, which hands over the contract for operating the charge to IBM next year, earns £56million a year.