An expanding city, ambitious mayoral targets for sustainable travel – and a serious lack of funding. That was the picture presented to the London Assembly’s Budget and Performance Committee today as it began its probe into Transport for London’s record on delivering capital projects.
TfL is big business: assets worth £55 billion, operating costs of £6.3 billion last year, more than £3 billion in capital spending and overall borrowing standing at £11.7 billion. And although the transport body already had one of the largest capital investment programmes in the country, it has needed to plan for a travelling population of more than 10 million by 2041 – equating to an extra six million trips a day – alongside £650 million a year to keep its networks running.
Existing sources of funding were “not enough to deliver the Mayor’s transport strategy”, TfL’s director of city planning Alex Williams told the committee. “We are maxed out in terms of our borrowing. We need to look at other sources, new and creative ways of funding.”
Crossrail delays, costing up to £2 billion, were also affecting Crossrail 2 plans, he added, with a fifth strategic business case now in preparation for Whitehall next month, on which will take into account the fact that “money assumed to be in the Crossrail 2 piggy bank is now required to complete Crossrail 1”.
A government response is expected in the autumn, “though the timetables for decisions like this have not been as quick as we would like”, Williams said. He stressed that government support is vital for major projects, and a “key challenge” for the government’s forthcoming spending reviewing, setting Whitehall spending from 2020: “We need funding certainty for our business plans. Without that, it makes it almost impossible to progress with major schemes.”
Funding issues have had a wider impact too, with Piccadilly Line signalling upgrades deferred along with improvements to Camden Town tube, while replacements for the 60-year-old Piccadilly Line trains will going ahead only after a 20 year sale and leaseback deal on Elizabeth Line trains has generated £1 billion.
The network had benefited from historically high levels of investment in the run up to the 2012 Olympics and after, allowing some scaling back this year and in 2020, said TfL strategy and network development director David Hughes, with spending on “core asset renewal” due to increase from 2021. “We still have a very significant investment programme,” he said. “You will always have prioritisation issues and resource constraints.”
There was better news for the Silvertown road tunnel, which is intended to relieve congestion at Blackwall Tunnel. The funding is in place and a decision on a preferred bidder to do the work is expected this week, the committee was told.
Hughes did not accept criticism from Assembly Members that a new road tunnel could actually worsen congestion and further damage air quality. He said the scheme had been approved by transport secretary Chris Grayling after additional air quality impact analysis and that the tunnel would be “public transport based”, facilitating extra bus journeys, and that its toll regime could be used to regulate traffic levels.
And work was continuing on plans for a bridge between Rotherhithe and Canary Wharf, with £330 million allocated in the TfL business plan, though consultation had been postponed while costs were examined, the committee heard.
The TfL officials sidestepped questions about whether Mayor Khan’s fares freeze policy was a correct one given TfL’d financial concerns, but they did report patronage holding up on the Tube at the same time as National Rail services, which have been subject to significant fare increases, have seen passenger numbers falling.
New ways of raising money were continuing, they said, from the sale of TfL’s Grade I listed art deco HQ at 55 Broadway in Westminster to discussions on land value capture, “on demand” bus trials to boost bus use in Sutton, and even discussion of workplace parking levies to help fund possible tram links in the same area.
A webcast of the budget and performance committee meeting can be watched here. The TfL board meets tomorrow, and will be discussing Crossrail and progress on implementing the Mayor’s transport strategy.