London mayor Sadiq Khan has launched a review of Transport for London’s (TfL) long-term financial future, just days after central government announced a similar investigation.
The Department for Transport and Treasury review was widely seen as taking power out of the hands of the mayor and TfL, and could lead to the imposition of a new funding and operating model, the sale of its assets and driverless trains.
The mayor's review will: 'Develop options for TfL’s long-term future funding and financing models that would enable TfL to deliver the right services for London, invest in new and existing infrastructure and continue to contribute to London’s development and sustainability.'
Mr Khan said that following the impact of COVID-19 'it is vital that we find a new solution to support not only London but the wider economy'.
The work will be carried out 'in parallel with the previously announced Government review' of TfL’s finances, and is expected to conclude in September.
The review panel will be 'independent from both TfL and the Greater London Authority (GLA) and will not be paid a fee.
The membership is:
- TC Chew, Global Rail Business leader at Arup, Chartered Engineer and a Fellow of the Royal Academy of Engineering;
- Stephen Glaister CBE, Emeritus Professor of Transport and Infrastructure at Imperial College London, a member of the Board of TfL 2000 to 2008 and member of the 2019 Oakervee Review of HS2;
- Bridget Rosewell CBE, Chair of Atom Bank and of the M6 Toll company and a Commissioner for the National Infrastructure Commission;
- Sir Jonathan Taylor, Vice President of the European Investment Bank from 2013 until 2019.
As recently as the start of March 2020, TfL was still forecasting it would reduce its like-for-like operating deficit by 86% by the end of the 2019/20 compared to the end of 2015/16.
However, the previous removal of the Government's Operating Grant meant around 70% of TfL’s income to operate the network has come from fares. This meant the impact of the coronavirus pandemic severely affected its finances.
At the peak of the COVID crisis, TfL’s passenger income reduced by more than 90% compared to last year.
Andy Byford, London’s Transport Commissioner, said: 'The pandemic has revealed that the current funding model, with its heavy reliance on fare revenue, simply doesn’t work when faced with such a shock.
'This important review will examine the options for new and more robust arrangements to provide firmer foundations into the future. Securing TfL’s short and long-term financial future as part of our post-covid recovery is one of my top priorities and I look forward to assisting the panel in their work.'
As part of the Government's emergency funding package for TfL, worth up to £1.9bn, the transport authority agreed a number of imposed restrictions on its powers.