'Hamstrung' TfL may not deliver Khan's transport priorities

 

A hard-hitting report says the funding to support capital investment in London’s transport network is at risk while the mayor’s fares freeze has left Transport for London (TfL) ‘hamstrung’.

The warnings come in an analysis of TfL’s ‘financial challenges’ from the London Assembly’s Budget and Performance Committee.

”Local
Mr Khan campaigning on a bus prior to his election

The report says whoever had been elected as London mayor in May would have been faced with a major financial challenge at TfL, which had just published a business plan based on £2.8bn less revenue funding than in its 2014 plan.

On top of this, Sadiq Khan’s commitment to freeze fares – whose cost is agreed to be £640m – has ‘made TfL’s financial position even more strained’.

The report says major capital investment in the transport network is needed to keep London moving as its population grows but the funding to support this ‘is now at risk’, with Government funding falling faster than TfL had previously expected.

In a foreword to the report, committee chair and Conservative assembly member Gareth Bacon said: ‘Perhaps unsurprisingly, TfL hasn’t worked out a solution yet. But some of what we heard hasn’t exactly filled us with confidence.’

Mr Bacon said that while TfL says it has plans to save money through better procurement, ‘it could not give us any examples of current contracts that are not delivering value for money’.

The transport body’s hopes to generate more commercial income, ‘could be at odds with the Mayor’s desire to build more affordable housing on TfL land’, Mr Bacon said.

He added: ‘And TfL is undergoing a “root and branch” review long before the Mayor publishes his Transport Strategy: will TfL be able to deliver the Mayor’s transport priorities?’

Mr Bacon said the situation was ‘obviously not all doom and gloom’, with the fares freeze and new bus ‘hopper ticket’ benefiting millions of passengers and TfL still expanding and improving the transport network.

Uncertainty and arbitrary figures

The report says TfL’s financial situation became more uncertain when the UK voted to leave the EU but it ‘appears to have no plans about how it will manage any loss of funding, research, or staff from the EU’.

It says Mr Khan’s announcement on the savings to fund the first two years of the fares freeze ‘contained a number of arbitrary figures and are currently unsupported by any firm delivery plans’.

The report also casts doubt on TfL’s other proposals to increase its income, warning that fares growth cannot be taken for granted, particularly as TfL is ‘hamstrung’ by the mayor’s promise to freeze fares and protect the existing concessionary fares structure, and that there is no guarantee that his plan to create a new trading arm will be profitable.

Committee members say they are ‘particularly concerned’ at the risks to TfL’s capital investment programme, which is ‘inextricably linked’ to cuts to TfL’s revenue funding. They warn that delays to capital projects are likely to have a negative effect on fares income, while capital projects may have to be scaled back, delayed or cancelled if TfL cannot meet its funding gap.

The report also warns that ‘financial constraints also apply to any ambition the Mayor and TfL might have to take over suburban rail services’.

A TfL spokesperson said: ‘We welcome the Committee's report and will set out our finances later this year in a revised Business Plan which will deliver all of the mayor's commitments to London.’

 

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