Londoners face a £20 council tax hike for the next three years as Transport for London (TfL) tries to come to a long-term funding arrangement with central government.
As crisis talks drag on between TfL and Westminster, mayor Sadiq Khan issued a statement listing the ways he could be 'forced' to recoup cash as a result of ministerial pressure.
The current emergency funding agreement between TfL and the Government expires on 17 December and according to Mr Khan the Government has yet to propose a new agreement.
He accused central government of holding the capital to 'ransom, threatening to withhold all emergency funding unless even more significant additional revenue is raised from Londoners for TfL'.
The Mayor said he was being forced to propose an increase to council tax of £20 a year for the next three years to raise approximately £172m annually.
Following an earlier bailout, TfL already agreed to raise fares by RPI + 1, and Mr Khan said he refused to increase ticket prices any further.
Instead, a number of modifications to fares structures and ticketing to raise an extra £60-£80m per year were considered. These included:
- increasing the age of eligibility for free travel using the 60+ pass by six months each year over the next 12 years
- Increasing the cost of an Oyster card deposit from £5 to £7.
- Applying an all-day peak fare for London Underground journeys between Zone 1 and Heathrow on the Piccadilly Line to reflect that demand to Heathrow does not conform to the usual peak periods, with daily and weekly price caps limiting costs for airport workers.
- Withdrawing from the Travelcard Agreement. Travelcard users are now a minority, as passengers gain many of the same benefits from other ticket types due to the introduction of Contactless and Oyster Pay As You Go (PAYG).
All of the changes are subject to consultation, impact assessment and decision-making processes before they are implemented.
Mr Khan said: 'These are on top of the changes forced upon London last year when short term funding was first given. The fairest way for additional funds to TfL would be for the Government to give back the £500m Londoners pay every year in Vehicle Excise Duty (VED), which is currently used almost entirely to maintain roads outside London, but this proposal has been rejected. Instead, ministers are insisting on further measures to raise revenue that will unfairly punish Londoners.
'We’re being forced down this route by the Government’s refusal to properly support TfL or to enable us to raise additional revenue fairly by devolving powers.'
The Government previously said it would ringfence VED for a National Roads Fund for the strategic road network and major roads in England. However, as revealed by Transport Network's sister publication Highways, this plan appears to have been quietly dropped due to funding cut backs.
'Even with the additional revenue we’re being forced to raise in London, TfL will still have to make significant cuts to bus and tube services, planning on the basis of “managed decline”. This will also have an impact on housing supply that is desperately needed,' Mr Khan said.
'Only a proper, long-term funding deal with the Government, including additional capital funding, will avoid these damaging cuts and give TfL the certainty it needs to plan future investment and improvements to our transport system.'
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
