The government’s £1.9 billion bailout of Transport for London in May came with controversial strings attached – scrapping free travel for under-18s, curbing concessionary fares for older travellers, above inflation fares hikes from January and extending the Congestion Charge.
Details of the final condition, a “broad ranging review of TfL’s future financial position and future financial structure” published today by transport secretary Grant Shapps, looks to be equally controversial, with the beleaguered transport authority seemingly firmly in the hands of Whitehall as it faces a further period with significantly reduced income from fares.
The review will be led by the Department for Transport, according to today’s announcement, with “support” from external advisors, reportedly KPMG, as well as the department’s “special representatives” on the TfL board. Mayor Khan and TfL may provide “views and options” and information “as reasonably requested”.
Long-term City Hall watchers may not be surprised that one of the special representatives, also announced today, will be Andrew Gilligan, the former journalist who was Boris Johnson’s cycling commissioner and now advises the former Mayor on transport matters.
He will join fellow former mayoral adviser Sir Edward Lister, now a senior Downing Street figure, who co-chairs the “London Covid Transport task force” responsible for “joint” action and oversight of TfL as the capital moves out of lockdown. The second representative is former civil servant Clare Moriarty, whose CV includes leading the Department for Exiting the European Union and senior roles in the Department for Transport.
The review team will be working fast, with a deadline of the end of next month so that its findings can inform government decision-making on further support for TfL after its current arrangement runs out. While another bailout seems inevitable for a system almost entirely dependent of fares and other revenue to cover its costs, the review will also look at short-term options for “revenue maximisation” and efficiency savings, reassessing capital spending priorities and exploring “more fundamental changes” to make TfL fully financially sustainable by 2025.
This could include raising more income from TfL’s “housing development pipeline”, currently scheduling 10,000 new homes, 50 per cent affordable, including developments on Outer London Tube station car parks which have proved controversial with London Assembly Conservatives.
Further opportunities for efficiencies could include “workforce modernisation” and exploring the feasibility of introducing so-called “driverless” trains on the London Underground, the document says. And the review will also be looking at “alternative operating models” for the system, including its structure and governance.
Tube workers’ union the RMT was quick off the mark to criticise, warning the government of the “mother of all battles” against “plans for Tube privatisation and driverless trains”. Assistant general secretary Mick Lynch said: “This not just a serious threat to safety and services, it is the government using the Tube as a political football and engaging in political point scoring in advance of the mayoral elections.”
Labour members of the London Assembly have already described the May bailout as a “brazenly political” attempt to undermine Khan, and this latest intervention is not likely to reduce tensions between City Hall and Whitehall.
Khan has regularly called for government funding for TfL, pointing out that, uniquely for a major city, the system receives no direct grant support. While the review will include a look at other systems and levels of public funding internationally, it makes it clear that changes to government tax or spending plans are “not part of the scope of this review”.
The review team will report to Shapps, the terms of reference state, with “oversight from the Prime Minister and the Chancellor of the Exchequer”. Whether its findings come into the public domain remains to be seen. Its report may be published, but only “if ministers are minded to do so”.
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