Croydon Council has refunded just £520,951 of the more than £13 million it collected from motorists through fines issued under Low Traffic Neighbourhoods (LTNs) that were later ruled unlawful.
The council was forced to withdraw all six of its zones in March after a High Court judge ruled that their continued operation was driven largely by the revenue they generated.
Almost six months later, only around 4 per cent of the money collected has been returned to motorists, according to council figures.
How Croydon's LTNs generated more than £13 million
LTNs are designed to reduce traffic in residential areas. They can use cameras, planters, bollards and other measures to prevent vehicles from travelling through certain roads.
Croydon's schemes were quashed after Mr Justice Pepperall said he was satisfied that "the dominant purpose" of making the zones permanent after an initial trial period was "the need to safeguard the revenue raised by enforcement".
Figures show the council collected £7,210,328.18 from the LTNs between March 2024 and February 2026.
Newly released figures covering an earlier trial period, which ran from November 2023 to March 2024, show that a further £5,828,136 was raised.
Together, the two periods generated more than £13 million in fines.
Council collected up to £480,000 in a single month
The council collected an average of around £300,000 a month, with its highest monthly total exceeding £480,000 from just 11km (6.8 miles) of road.
During the trial period, one LTN at the junction of Derby Road and Clarendon Road generated almost £250,000 in a single month.
In April, the council said motorists could apply for refunds through its website but did not commit to returning all of the revenue generated by the schemes.
Thousands of motorists have applied for refunds
Council figures show that motorists have submitted 6,167 applications for refunds so far.
Shadow Transport Secretary Richard Holden said: "Labour's low traffic neighbourhoods in Croydon were unlawful, and it was drivers who paid for them.
"The previous Conservative Government put in clear guidance saying councils must listen to local people and keep these schemes under proper review. Labour ditched that guidance and imposed these schemes with Sadiq Khan's backing.
"Croydon's Conservative mayor scrapped all six zones the moment the High Court ruled. Every driver who paid a penalty in those zones should put in a claim, and I would encourage them to do so today."
Mayor says schemes were inherited from Labour
Croydon's Conservative mayor, Jason Perry, said: "Richard is absolutely right. These deeply unpopular schemes were imposed by Croydon's previous Labour administration in 2020 with Sadiq Khan's backing, despite the concerns of residents and businesses.
"I inherited them alongside a council Labour had bankrupted, with millions of pounds in anticipated fine income already built into its finances. I worked to reduce their impact by removing physical barriers and introducing free resident permits.
"When the High Court ruled, I acted immediately: accepting the judgment, refusing to pursue a lengthy appeal and scrapped all six schemes.
"I welcome Richard's support in encouraging every eligible motorist to submit a refund claim. Labour treated Croydon's drivers as a cash cow; we have put residents first, removed these schemes and ensured they will never return whilst I am Mayor."
Residents describe impact of fines
Karen Lawrence, who led the original legal action against the schemes, previously said: "These closures had such a big impact on my movement around Croydon. I am so glad the courts vindicated what we all thought these were truly about… money."
Residents affected by the schemes have described receiving fines and, in some cases, being pursued by debt collection agencies.
Roger Minnis's daughter said her father was recovering from abdominal surgery when he travelled to an urgent GP appointment and was issued with a fine.
She described the council's handling of the matter as "absolutely disgusting", claiming she was subsequently pursued by an "aggressive" and "threatening" debt collection agency while attempting to resolve the fine on her father's behalf.
Campaign group welcomes refund process
The resident campaign group Open Our Roads said it was "shocked" by the scale of the revenue generated by Croydon's LTNs.
A spokesman said: "The figures quoted suggest they were not performing their stated objectives, given the high level of enforcement revenue, but we are pleased the current administration has swiftly put processes in place to refund the fines wrongfully taken."
The group said it had received more than 1,000 messages of thanks from residents.
It also claimed that LTNs in other boroughs had generated further complaints from motorists and residents over the sums being collected through enforcement.
High Court examined mayor's previous position
The High Court judgment in March also examined comments made by Mr Perry about the schemes while he was in opposition.
Mr Perry had previously said he wanted to remove all of the LTNs on his first day in office.
However, after he was elected in May 2022, the judge found that his position had changed because of the council's financial circumstances.
The judgment said Mr Perry "didn't think he was in a position to remove the schemes because the previous Labour administration had predicated their budgets on assumed income from the schemes".
Mr Perry later said: "I did not at any point say that I would remove all the LTNs because I just knew it was not a pledge that I could uphold... any future schemes coming forward should not be based on fining residents in order to achieve it."
Croydon has faced repeated financial problems
Croydon Council has effectively declared bankruptcy three times since 2020, the same year it began trialling LTNs before making them permanent in 2024.
The council's financial difficulties formed part of the wider context considered by the High Court when examining the decision to make the schemes permanent.
Government dropped plans to restrict LTNs
Last year, the Labour Government dropped plans to restrict councils' ability to introduce LTNs and 20mph zones, in a move criticised by opponents as a "secret war on drivers".
The proposed reforms, drawn up under the previous Conservative Government, would have limited councils' powers to restrict traffic and impose what critics described as unfair fines and parking charges.
Ministers rejected the proposals, arguing that they "would have made no positive difference for drivers".
A Department for Transport spokesman said: "As is longstanding policy, local authorities are best placed to decide what traffic management schemes are appropriate, but they should always be developed through engagement with local communities. There are no plans to change this."