TfL to Lose £1 billion per Year

 “TfL expects £1bn deficit by next year”. That was the headline in an article in today’s Financial Times. Apparently they have seen an internal email written by finance director Patrick Doig that the organisation faced an operating loss of £968 million in 2018/19 which he said was “clearly not a sustainable position…”. The deficit in the current financial year is expected to be £785 million this year which shows how rapidly its position is being eroded.

There are several reasons given for this erosion in their financial position – the Mayor freezing public transport fares (estimated cost £640m) did not help, but the big problem is falling revenue from users. Both bus and underground journey numbers have been unexpectedly falling.

Is this because more people are not travelling, e.g. doing internet shopping and working from home? Or is it because they have chosen to travel by bike (usage is growing), or find it is as cheap and a lot more comfortable to call Uber? Or perhaps it’s because some London residents are selling up and moving to the country with house prices peaking in London, or returning to homes in the rest of Europe. Perhaps those French, Polish, Romanian and other residents are worried about their future after Brexit? Perhaps they just got tired of life in London, unlike Dr Johnson who did not have to suffer the mediocre standards in TfL’s public transport provision.

The Mayor has only recently published his Business Plan for the years to 2022/23 (see this article: ). But you can see exactly why the Mayor is so keen to raise as much as £300 million from Londoners via the Ultra Low Emission Zone (ULEZ) charges. As we have said before, the ULEZ is about money, not about improving the health of the population or cleaning up London’s air.

A comment in the FT article was by Gareth Bacon, London Assembly Conservative Members, who said there was now “serious cause for concern” about Mr Khan’s “cavalier” financial stewardship of TfL.

Roger Lawson


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New Mayor’s First Acts

As readers will be aware, Sadiq Khan has been elected to Mayor of London, soundly beating Zac Goldsmith who ran a rather lacklustre campaign. The new Mayor has moved rapidly to implement some of his policy initiatives which includes a freeze on public transport fares for 4 years. Previously it was suggested that it would leave a £1.9bn hole in Transport for London’s budget but the Transport Commissioner, Mike Brown, says that he will deliver it. Exactly how is not yet clear but obviously TfL’s expenditure will be reduced and staff cut back, so support for local road safety and other schemes is likely to be reduced. Perhaps TfL could stop wasting money on speed cameras as one element of expenditure that has little benefit – for example the £15m alone proposed for average speed cameras on arterial London roads?

In addition to that financial gap, the new Mayor has also announced a new “Hopper Fare” that will enable bus passengers to take two trips for the price of one so long as they are both within one hours. This will be introduced in September this year. And what is the cost of this? Another £30m hit to TfL’s budget it is estimated but it will benefit a huge number of people according to Mike Brown.

Needless to point out perhaps that Mr Khan is the son of a bus driver. Is this going to be regime for bus users, whereas Boris’s became one for cyclists? We shall see no doubt.

Another initiative already announced is an attack on air pollution (Mr Khan apparently suffers from asthma so has a personal interest in the matter), with a formal policy consultation in weeks on a number of measures. These include extending the Ultra-Low Emission Zone (ULEZ) to the North/South Circular Roads and bringing it forward to be earlier than 2020; introducing ULEZ standards for HGVs from 2020, planning for a diesel scrappage scheme (assuming central Government will support it); introducing ULEZ standards earlier for double-decker buses and cleaning them up in outer zones plus putting cleaner buses on certain corridors. It also seems likely that the “Boris Bus” (aka. New Routemasters) will be replaced for new orders by other vehicles.

Such changes will of course assist in plugging the budget gap because people may not find it easy to change to compliant vehicles quickly enough so will end up paying the surcharge for non-compliant vehicles. Oddly enough the people most affected by these changes are likely to be Mr Khan’s own election supporters – namely the poorer section of the community that is running older cars.

Comment: air pollution in London is certainly a cause for concern but it has been steadily improving. Diesel vehicles are many times better than they used to be but it takes time for the installed base of vehicles to change. However the main problem is not private cars, but buses, HGVs, LGVs and taxis. In addition transport is only one element that makes up air pollution in London. Construction alone is a major factor, particularly when transport associated with it is also high.

Unfortunately the impact of air pollution on medical problems and life expectancy is grossly exaggerated by the advocates of banning vehicles. Any proposals to reduce air pollution by restricting the use of certain vehicles may have little impact in practice and have enormous financial costs. Let us hope that the proposed public consultation gives us a proper cost/benefit analysis of the proposals that are on the table before asking our opinions. There was certainly none done for the original ULEZ proposals which included many vehicles in the restrictions which would have negligible impact on air pollution.

Roger Lawson