Transport for London’s budgeting came under fire at a London Assembly meeting dedicated to discussing the organisation’s £1 billion deficit.
Opponents of London mayor Sadiq Khan have often blamed the debt on his decision to partially freeze fares on the Tube and bus network for five years, while TfL’s Commissioner Mike Brown previously admitted that income from the Underground network is being used to pay for road repairs (RAIL 852).
In addition, the 2018-19 financial year marks the first time TfL will not receive a Government subsidy. Last year, it received £228 million from central Government, while the grant used to stand at £700m a year.
Transport for London has previously stated it aims to get rid of the debt by 2022, with the help of opening the Elizabeth Line (Crossrail) later this year and stopping all-but essential roadworks.
However, Professor Tony Travers, from the London School of Economics and Political Science, said recent forecasts have been out by several hundred million pounds, saying: “The challenge TfL has to balance its books has a great deal to do with the difficulty of predicting fare income in the short and medium term. If you look at the last three forward projections they have been significantly overly optimistic.”
Travers said while passengers may be prepared to pay more than at present to use the Tube, they would want to see improvements. He suggested a ring-fenced funding increase may help the public perception.
Gareth Bacon, chairman of the London Assembly Budget and Performance Committee, claimed: “Londoners are now paying the price for the Mayor’s reckless policies. His partial fares freeze has resulted in cuts to vitally important infrastructure projects and worsened the state of TfL’s finances.”
In a previous meeting to discuss the organisation’s budget, TfL said it had hoped to increase advertising revenues by 50%.
“To say that these claims should be treated with caution is a significant understatement,” said Bacon.
His view was backed by Richard Anderson, co-director of the Railway & Transport Strategy Centre at Imperial College, who said: “It would be quite heroic to assume that revenue could be grown significantly to offset the need to freeze fares.”