TfL chief reports ‘good progress’ in government funding talks, but Shapps says ‘we can’t have’ Boundary Charge option

TfL chief reports ‘good progress’ in government funding talks, but Shapps says ‘we can’t have’ Boundary Charge option

Transport for London commissioner Andy Byford says “good progress” is being made in talks with Department for Transport (DfT) officials towards the “long-term financial deal that we all know we need,” in order to secure the capital’s transport funding in the wake of the damage done to it by the pandemic.

Speaking at TfL’s board meeting today, Andy Byford said he and colleagues are also “trying to persuade government that proper funding of TfL can directly help government with its own agenda”, including helping to strengthen the economies of other regions to and nurturing a green economic recovery.

However, transport secretary Grant Shapps has again chosen to publicly rubbish ideas put forward to his department by TfL for inclusion in the next financial settlement, which has to be agreed by 16 March so that TfL can fulfil its statutory obligation to produce a balanced budget by that date.

In a financial sustainability plan submitted on 11 January, TfL suggested it could introduce a £3.50 per day Outer London Boundary Charge to be levied on vehicles entering Greater London if they are registered outside it, thereby exempting Londoners.

But speaking to ITV London, Shapps said today, “We can’t have a situation where a devolved administration in one place pins the cost on people who live elsewhere,” describing this as “taxation without representation”.

Last week in the House of Commons Shapps appeared to dismiss TfL’s other idea for raising the same amount of money – an estimated £500 million a year – by retaining the share of Vehicle Excise Duty raised in London rather than it being spent on roads everywhere else in England and also mocked the Boundary Charge idea. Government figures show that taxes as a whole raised in London but spent in other parts of the UK have recently amounted to nearly £40 billion a year.

City Hall points out that as Mayor Sadiq Khan, who chairs the TfL board, has “broad powers to introduce road user charging schemes to facilitate the achievement of the Mayor’s Transport Strategy.” These powers have been used by Khan and his predecessors to introduce and vary London’s existing road-pricing schemes, the Congestion Charge, the Low Emission Zone (LEZ) and the Ultra Low Emission Zone (ULEZ), all of which apply to the vehicles of non-Londoners. The LEZ begins at London’s boundaries.

The GLA Act 1999 gives Shapps “a limited power” to direct the Mayor to change the transport strategy if he considers it “inconsistent with national policies relating to transport” and any inconsistency to be “detrimental to any area outside Greater London”.

Road-user charging in other parts of the country applies to anyone who makes use of the road affected, regardless of where their vehicle is registered. For example, Southampton City Council’s toll on Itchen Bridge must be paid by drivers from outside Southampton. TfL is bound by financial governance rules similar to those of local authorities, such as issuing a formal notice – a Section 114 –  when it finds itself unable to deliver more than the most basic services.

Byford also told the board he has had “a very positive discussion” with the DfT’s permanent secretary about the need to avoid “another last minute deal”, as was the case with the two emergency bailouts negotiated after TfL’s revenues slumped due to passengers avoiding using public transport.

The board heard that a feasibility study is being conducted into the possible Boundary Charge, and board member Lynn Sloman, who is also director of a sustainable transport business, told the meeting the Boundary Charge presents “an opportunity to focus on the challenge of improving sustainable transport in Outer London”.

She described doing so as “one of the key core areas for us to try and do better on” for residents in suburban areas in terms of transport options and air quality. Byford said the whole point of raising the money would be to help pay for improvements in the outer boroughs.

Clare Moriarty, one the two government “special representatives” who the current bailout agreement says “will continue to attend all TfL board meetings” concurred with Byford’s assessment of the negotiations, describing them as “constructive”, and added that the DfT is “very focussed” on the 16 March deadline.

The other special representative, Boris Johnson’s transport adviser Andrew Gilligan, a former media supporter of the Prime Minister, was invited by the Mayor to comment on the discussions, but didn’t do so. A message appeared on the screen shortly after describing Gilligan as being “waiting the lobby” for the Teams-hosted meeting.

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