Transport for London (TfL) will lose £600m by 2023/2024 due to the Crossrail delay, according to its latest business plan, which outlines a worrying financial situation.
The news comes after TfL agreed a £2.15bn rescue package for the troubled project, pushing costs up to close to £18bn with no definite opening date in sight for the central section.
The rescue package includes a £1.3bn loan from DfT, paid back over 10 years using the mayor's community infrastructure levy. With the loss of income, this has put the Crossrail 2 project in doubt as well as forcing cuts to capital schemes.
TfL said the capital costs and loss of fare revenue is 'expected to be approximately £200m in 2019/20, rising to potentially £600m across the next five years'.
Its plans to turn an operating loss into a surplus or at least break even have been pushed back by a year to 2022/23.
Even this is dependent on a 3% growth in passenger numbers next year, which TfL's own forecast suggests it is likely to miss, with trends showing a '15% fewer transport trips than four years ago'.
It states: 'Whilst TfL’s overall fares revenue is just above forecast for this year, since the 2016 Business plan the five year forecast is approximately £2.1bn lower than expected, due to the wider state of the economy.'
On top of this TfL plan to make fares grow from half to two thirds of income, which it concedes will make 'us more exposed to changes in the economy'.
As a result capital projects are being put on hold - including signalling upgrades and the Camden station upgrade - both of which will not be possible without central government supporting the capital costs.
There are also 30% cuts planned for back office costs.
The situation with TfL's roads is also worrying, with the transport authority recording that in 2018/19 cost will be around twice that of income at £600m compared to £317m. TfL appears to have no answer for this and states: 'A solution to this congested, underfunded network is needed.'
Cuts in government funding have resulted in an average reduction of £700m a year in TfL's operating funding. Since April 2018, TfL has become one of the only transport authorities in the world not to receive a direct Government operational grant for day to day running costs.
TfL has reduced year-on-year operating costs by more than £150m, and further reduced like-for-like costs in 2017/18.
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