Transport for London faces ‘significant financial challenges’, which pose a risk to the capital’s bus services, according to an independent report.
KPMG’s bus service review has warned that public subsidies for the network will rise from £653M to £766M by 2017 – without taking into account the extra costs of the reintroduction of Routemaster buses.
The review said TfL should periodically conduct a competition and market risk analysis to consider the current state of competition and plan contingencies should an operator leave.
It recommended a rethink on restrictions on the volume of on-bus advertising, improvement on the transparency of the bidding process, and maintaining individual relationships with London boroughs.
The review warned that in order to balance the books, the mayor might have to increase fares, downsize the network, cancel new projects, or reduce the quality of the service. It added that Boris Johnson’s plan to introduce the new bus for London would result in further additional costs not included in the budget forecast.
However, a TfL spokeswoman said: ‘TfL’s business plan includes funding for the design and development of the new bus for London, which will go into service from 2012.’ The spokeswoman confirmed that TfL was looking closely at the recommendations.
Val Shawcross, Labour assembly member and deputy chair of the assembly transport committee, warned that the mayor could use the review as a pretext to cutting services. ‘There is clearly going to be pressure on TfL finances and passenger fares, so the last thing the mayor should be doing is pursuing a wildly-expensive and totally unnecessary new open-backed bus.’
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