After years of financial peril, Transport for London (TfL) is on course to deliver an operating surplus this financial year as ridership continues to rise towards pre-pandemic levels, chiefs told a board meeting yesterday.
Passenger numbers have risen to 85 per cent of pre-Covid totals overall, albeit with the highest travel numbers coming at weekends rather than on working days, the meeting heard. Each one per cent increase generates an extra £50 million in fares income, which is good news for TfL coffers, bringing the 2022/23 year-end deficit down to £300 million on operating costs of more than £7 billion.
Fares income overall was up by just over £1 billion on 2021/22, with property and advertising income also rising, all pointing to a continuing post-pandemic recovery. Savings of £222 million had been made over the year, well above the budgeted target of £174 million. Debt was reduced too, to some £15.3 billion. The S&P Global Ratings agency last month revising its outlook for TfL to “positive” from “stable”.
Board members welcomed the financial turnaround as well as the improving ridership figures and also criticised “glass half-empty” commentary on the capital. Sadiq Khan, who chairs the board, called for more recognition that London is recovering from the pandemic faster than other global cities.
But with no government promises on capital funding for major projects beyond next April, the city’s transport network continues to face uncertainty over longer-term improvement plans – which could even put at risk the Mayor’s ambitious “Vision Zero” strategy to eliminate all deaths and serious injuries on London’s streets by 2041, finance chief Patrick Doig told board members.
The current funding strategy would see smaller-scale investment funded from surpluses on revenue, covering three-quarters of capital spending, and government financial support sought for bigger schemes, including new Piccadilly line trains and signalling upgrades, new Docklands Light Railway trains and electric buses.
With £475 million already contractually committed on those big schemes for 2024/25, as TfL reported in March, failure to secure a new capital funding deal would mean “undoing the progress made under the current funding agreement” and forcing the transport agency to again “start making difficult choices relating to reducing service levels, asset renewals and delaying non-committed investment” could mean scaling back on road safety improvements, Doig warned.
A separate report to the board tracking progress against Mayor Khan’s transport strategy spelt out the point. Although still well down on totals a decade ago, the 2022 figures for road casualties – 101 people killed and 3,873 seriously injured – were returning to pre-pandemic levels and remained off track for meeting the 2041 ambition, the report said.
It added that a “longer-term financial settlement from central Government” is needed to get back on track with traffic reduction measures, which had been proven to be “one of the most effective ways to reduce the number of people killed or seriously injured”.
And the clock was again ticking for TfL to secure the capital it needs. An initial meeting with Department for Transport officials and junior transport minister Richard Holden will not take place until 12 July, Doig said. “We need certainty well in advance of March 2024,” he said. “We have the summer and early autumn to make progress.”
Commissioner Andy Lord, whose permanent appointment to his job was announced at the meeting, said securing long-term funding would be a key priority for his tenure. He also pointed out the “irony” that under government plans for “London-style” transport systems across the country, including multi-year funding deals, the capital was now falling behind. “We continue to make the case for a ‘London-style’ deal for London,” added Doig.
The full board meeting can be viewed here.
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