An emergency meeting of the TfL board today (Tuesday 9th August) has revealed that Mayor Sadiq Khan has rejected some of the Department for Transport’s demands in exchange for funds.
The meeting saw TfL highlight it is now using reserves which may see an emergency notice soon issued and large service cuts.
The meeting was discussing ” a last extraordinary funding settlement with Government, which will support TfL’s final stage of its path back to financial sustainability from April 2023.”
TfL state “This proposed funding settlement was shared with TfL late on 22 July 2022 and has been subject to intense discussions with Her Majesty’s Government (HMG) officials over the intervening period.”
Transport Minister Grant Shapps stated it was his “final offer”.
Previous rounds have already seen TfL agree to increase the age of Freedom Pass eligibility from 60 to 66.
TfL are expanding the ULEZ to outer London to raise further revenue (encouraged by Conservative Transport Minister Grant Shapps) though income is expected to be modest given very high eligibility above 90 per cent of existing vehicles by the time of introduction.
TfL had been moving towards financial stability before 2020 and a vast reduction due to the pandemic.
Compared to most cities across the world, Transport for London are heavily reliant upon fare income compared to a balanced source of funding seen in other major world cities.
TfL have attempted to follow models seen abroad and expand income through methods such as property development to cross-subsidise transport operation.
However the Treasury have rejected applications for support to do so and generate long term income, meaning far less housing on public land than could be possible.
Not that TfL do themselves much favour at times, as 13 years after the Woolwich DLR extension opened a large amount of land in Woolwich town centre is still vacant.
An agreement was made with developer Oakmayne in 2007 – but nothing has happened since.
TfL are also spending large sums on Silvertown Tunnel out of public funds aside from their PFI deal with Riverlinx.
However, these sources of potential far from make up funding required to operate services in the short to mid-term as passenger numbers recover and London’s population grows once more.
In recent weeks the Home Office has made it easier for more Hong Kong nationals to move to the UK – though central government seem intent not to fund services for a growing population. Recent census figures show a sharp rise in the population between 2011 and 2021.
Where things go from here is unknown. The DfT seem intent on playing to the gallery (driverless trains on the tube would cost billions in a time of recession – it’s not happening) while Khan has not fully embraced ways to increase revenue. It’s not long since he reduced Congestion Charging hours costing TfL revenue.
While both are at loggerheads, Londoners face an uncertain future as does business. A London that doesn’t operate ensures less tax revenue for the Treasury.