No easy options for Transport for London finances, Assembly hears

No easy options for Transport for London finances, Assembly hears

Investment in transport should be top priority for the capital – with time running out to take a radical look at Transport for London’s fare structures too, according to experts quizzed by the London Assembly’s budget and performance committee.

Economists and academics including Jagjit Chadha from the National Institute of Economic and Social Research, Tom Pope from the Institute for Government and LSE London director Tony Travers gave their views as committee members began their scrutiny of Sadiq Khan’s 2024/25 budget plans.

The Mayor’s gross annual revenue and capital budget tops around £19 billion in all, more than half of which goes on TfL. Continuing “epic” levels of economic uncertainty meant no easy options for City Hall as it planned next year’s spending, the experts agreed, with the transport network facing persistent challenges both on investment support from government and shortfalls in fare income.

The shift to working from home meant TfL could no longer continue to rely on early morning commuter cash, said Professor Travers (pictured). This meant other ways to boost passenger income were needed, reflecting new travel patterns, as well as new funding sources in the longer term. These could include Council Tax contributions, further congestion charges and devolved revenue-raising powers.

TfL and City Hall should also be probing the impact of hybrid working on productivity and looking to change fare systems to encourage workers to go to the office more often, said Professor Chadha. “London is a thriving world city,” he added. “Should it be so quiet on a Friday?”

Time was running out to make the changes needed, warned Pope. “The transport system is what makes London London,” he said. “The question is how we pay for it.  We can wait one more year to see if we get back to pre-Covid levels, but not much more than that.” Adjusting Monday and Friday fares could provide important real time evidence of how changes might work, he said.

Chadha nevertheless struck an optimistic note. “We are living through some difficult times, and yet London is still a leader for the country and potentially a focal point for economic development,” he said. That meant not “wringing your hands and saying nothing can be done”, but acting on the constraints of growth, including transport.

That call was echoed by the capital’s business lobby group BusinessLDN, in a pitch to Chancellor Jeremy Hunt to use the upcoming Autumn Statement to bring forward “bold measures” to “improve the country’s economic performance and the capital’s competitiveness as a global city both now as well as in the longer-term”.

Those should include a commitment to transport investment and sustainable fares reform, the group said, citing recent research putting the value to the economy of TfL’s investment in its UK supply chain at £5.9 billion in gross value in 2022/23 alone, supporting more than 100,000 jobs nationwide supplying everything from engine and track components to station signage, escalator steps, zero emission buses and new trains for the Piccadilly Line.

 “Transport is a critical enabler for the capital’s labour market and economy,” BusinessLDN said. “The Government must deliver clarity and certainty on long-term capital funding for TfL so that it can efficiently deliver the maintenance and upgrades that the network needs.”

TfL’s current funding deal with Whitehall runs out in March next year. The network has bid for £500 million in capital support for 2024/25, for projects including new Piccadilly line and DLR trains as well as for replacing the Bakerloo line fleet, which, at more than 50 years old, is the oldest operational train fleet in the UK. Investment plans also include new trams, Metropolitan and District line signalling upgrades and renewal work on the A40 Westway and the southbound Blackwall Tunnel, but new funding arrangements have yet to be secured.

Khan’s 2024/25 budget guidance, covering City Hall programmes, TfL, the Mayor’s Office for Policing and Crime, the fire service and mayoral development corporations, confirms that TfL fare income is still expected to be below 2019 levels next year. The guidance also suggests fares might rise by four per cent, and that a further £20 will be added to Council Tax bills to help fund TfL. The budget will be out for consultation in December and be finalised in February.

Watch the budget and performance committee meeting in full here. X/Twitter: Charles Wright and On London. If you value On London’s coverage of the capital, become a supporter or a paying subscriber to editor and publisher Dave Hill’s personal Substack for just £5 a month or £50 a year. In return you get a comprehensive weekly London newsletter and offers of free tickets to London events.

Categories: News


  1. Lorraine Palmer says:

    I am extremely confused here. Where is the incentive to travel by public transport into central London for work if not required to do so? TfL have increased fares, changed bus routes or curtailed the route and is encouraging travel by bicycle. Tinkering with fares on Monday and Thursday will not encourage a mass of people to come to offices. Perhaps more long term thinking on the impact of decisions would have told you that as people are struggling, trying to extract more out of them will keep them away.

  2. Nick says:

    Exactly: TfL is carrying out making bus services unreliable and (in the case of South London) refusing to provide public transport alternatives to the dangerously congested Northern Line at Clapham North (via its to opposition to providing a Victoria-Dartford service at Clapham High Street Station for example).

    Bus stops are run down with information often missing whilst TfL also refuses to listen to customers. So how does it square its desire for more people to use its services on the one hand whilst steadily making services less appealing or listening to its stakeholders? Either TfL is a public transport body or an extended cycling lobbying group. It cannot effectively be both

  3. Sally Hughes says:

    I agree that fares are becoming too expensive for those that rely on buses (ie have no other transport option). The Cycle Highway4 – along Trafalgar Road and Woolwich Road means that the tiny number of people cycling have taken road space from – essentially – buses, preventing them from moving at a good rate and speed during the morning and afternoon school and work runs.
    TfL also controls these roads. Blackheath Hill is a disaster because of HGVs moving at slow speeds on a steep hill: both in terms of restricting the bus service, and the horrendous pollution they cause.
    LTNs – this is wasted funding, particularly where the needs of residents are such that they are forced to contribute to congestion on the strategic road network, or where there have been measurable limits on ‘switchability’ (ie from cars to active travel). Isn’t it time to review how this kind of money is spent – ie restoring parking for the train services and buses into the more central areas of London, and providing incentives to use public transport?

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