How ULEZ is devastating business in edge of London Borough's like London

The Sun sets over Mill Hill Music Complex

Every year, at this time of the year, I sit down with the bookings and sales from my music business and do an in depth dive into how the business performed, on a week by week basis for the previous year comparing with years before. We use this data to plan such things as advertising strategies, maintenance windows, etc. We analyse what we spent on advertising and how this worked.  This enables us to see what we did right in the year and what we did wrong. It shows trends in our business and enables us to work out how external events impact our business. 

In 2022, the business performed exceptionally well for the first three quarters, then had a drastic and unexpected slump for the fourth quarter. There were two main reasons for this end of year slump. The first was the death of Queen Elizabeth, which added bank holidays and cancellation of gigs, which resulted in a drop off and cancellation of bookings. The second was the world cup, which meant venues were showing football, instead of music.  This resulted in bands not requiring rehearsals. The situation was so bad for us, that we had to take out a loan to pay the VAT for the final quarter. As the final quarter of the year is traditionally the best for us, it really blindsided us. By analysing the data, we now know that if there is another world cup in the Winter (Saudi Arabia?), we will have to build cash reserves to tide us through. In 2022, we actually did some serious studio refurbishment in the summer, with cash we should have earmarked to pay bills. Had we anticipated the world cup effect, we certainly wouldn't. 

When we did some forward planning for 2023, at the start of last year, we anticipated growth of 25% as we went through the year. Our projection was that for the first two quarters this would be 15%, 20% for the third quarter and 50% for the final quarter, as Xmas gigs that didn't take place last year generated decent rehearsal income. We also expected a significant increase in retail sales. We anticipated a 10% growth in this. We have adapted our model, to try and adapt to the post covid world. This worked well generally, but we need to constantly ensure we are on top of trends that damage us.

I spent the whole of yesterday crunching the numbers. I have a lot more work to do on this but some trends are unmistakeable. On the 29th August, The Mayor of London, Sadiq Khan extended the ULEZ zone on the 29th August 2023 to the edge of his jurisdiction. We are located in Mill Hill and are about 1.5 miles from the edge of the ULEZ zone. Approx 40% of our trade comes from outside of the ULEZ zone. Many of the customers for our studios and shop come from Borehamwood, Watford, other parts of Hertfordshire and beyond. Many are musicians with older vehicles. Whilst our prices are highly competetive, any customer with a non ULEZ compliant vehicle (which includes many musicians, who need to ferry gear in vans), now have to pay £12.50 per vehicle to visit us. Adding £12.50 to the cost of a session (or multiples of), makes us relatively expensive. A band of 5-6 people only needs one to have a non ULEZ complaint vehicle for the impact to be huge. 

So how did this affect us? In short, it has been pretty catastrophic. We have seen a 60-75% fall off in customers from outside the ULEZ zone, whilst seeing a 30-50% rise from customers within the zone. Whilst some businesses in central London have seen a benefit from the expansion, as customers who previously wouldn't travel in have traded cars and now are using their services, businesses like us that are on the margin, have been clobbered. We are not alone. People with non ULEZ compliant cars in Hertfordshire, who may have nipped down to Mill Hill to shop, buy services and visit our cinemas, pubs and clubs are now going elsewhere. I'd love to see how cinemas like the Phoenix and the Everyman have been affected. 

Many Londoners got rid of non compliant cars in the lead up to the ULEZ zone. They sold good vehicles off at well under their true value. Most were not scrapped, simply sold to people in areas outside the zone, who rubbed their hands at bargain. Those people are not inclined to spend money travelling into the zone. This means that businesses like ours have been clobbered. The Mayor of London has absolutely no interest in people who run small businesses. He has no interest in people working in music and the creative industries, who require large expensive vehicles to move gear around and who's finances have been devastated by the pandemic. For businesses like ours, which have a huge capital investment in our firms, it makes planning almost impossible. We have to try and work out what our cashflow is going to be for 2024, so we can plan how we spend our money. Before I did a deep dive, I'd have expected a 15% increase on last year for the studios in 2024, as the music industry continues to recover. If we factor in the ULEZ hit, we could actually see negative growth. As best I can tell from our figures, the ULEZ hit will be about 12.5% so that just about takes out any growth we would normally achieve. 

So what can we do? Well we have to decide whether it is even worth bothering advertising in Watford, Borehamwood. We currently target these in Google Adwords campaigns, but we are seeing almost zero traction. We had been planning some more studio upgrades, but we cannot realistically plan these until we can see a couple of months data against last years, to see year on year effect on normal business, as Q4 2022 was  not a normal year to baseline against, so the hit was very hard to estimate. 

It is clear to me that Sadiq Khan is not a Mayor for all London. He is a Mayor for his own, rather narrow vested interests. His ULEZ scheme offered nothing for businesses struggling to recover from the pandemic. Without people like me, who work their socks off and invest huge amounts of money, London would not be the creative hub it has become. One of his first acts was to appoint a Night time Tsar in Amy Lame. Her job was to stand up for people in the creative sector. She has done nothing to make the case for artists and others in the sector affected by ULEZ. 

On a wider note, Mill Hill Broadway, our nearest high street, is seeing more empty units than ever. It is no surprise to me that shops, etc have taken a hit as people living a mile or so away now have to pay £12.50 in ULEZ charges, if they need a pint of milk and they have a non ULEZ compliant motor. 

The real tragedy is that the Tories have chosen a virtually unelectable candidate as a challenger. Whilst her scheme to abolish ULEZ would definitely benefit businesses like mine, she seems to look like a rabbit in the headlines every time she is interviewed. 

Later this year, the studio will celebrate it's 45th Birthday. What is the biggest tragedy is that it seems that both the local council and now the Mayor of London have done everything in their power to strangle us. I am not the only local business owner to feel like this. The Federation of Small Business has done sterling work making our case, but the Mayor of London is not interested.