Motorists to Pay for Sadiq Khan’s Financial Incompetence?

Newspapers have reported that the Government is imposing tough conditions for another bail-out of Transport for London (TfL). TfL are in severe financial difficulties as most of their income comes from fare paying passengers on buses and the London underground. But passengers have declined very sharply as they are avoiding the risk of Covid-19 infection on public transport and many City workers have moved to work from home.

TfL have already had £1.6 billion from the Government in May to keep them afloat, but it is reported that they are asking for another £2 billion for this financial year alone, with another £2.9 billion later.

Taking into account the population of London that means every man, woman and child in London will be paying the equivalent of £700 each in taxes to keep TfL afloat. A completely ridiculous sum!

The Government is allegedly requiring TfL to extend the Congestion Charge zone – presumably to the North/South Circular – plus increases in public transport fares and cancellation of free travel for children and older people.

Clearly tough decisions are required unless the Government comes up with some cash, TfL may be forced to issue a Section 114 notice – the equivalent of a public body going bust. Such a Notice inhibits any new expenditure which would severely hamper the Mayor and TfL. But would that be a bad thing when so much money is currently being wasted on daft road schemes and cycle lanes?

The basic problem is that while customers have disappeared, TfL have continued to run unchanged services which no commercial business would have done. They should have reduced services to save money, i.e. matched services to customer demand. What is the point of running trains or buses with nobody on them? It’s financial lunacy. They are also suffering from past financial mismanagement and delays to the Elizabeth line which meant they had no financial buffer to cope with the epidemic.

But who is going to pay for these problems? Apparently the motorist which is quite unjust.

I have sent the following email to my Member of Parliament  – I suggest readers do the same:

To Robert Neill, M.P.

Dear Bob,

I see that according to press reports the Government is demanding tough measures from Sadiq Khan and TfL to keep the latter afloat. That includes an extension of the Congestion Charge (a.k.a. Tax).

It is absolutely unacceptable that motorists should be required to bail out Sadiq Khan and the management of TfL as a result of their financial incompetence.

The Government should simply say “no more hand-outs – you need to adjust your revenue and costs on public transport so that they match”. Otherwise they should let it go bust and take over direct control of the organisation and institute some sensible management. That includes cutting out all those expensive cycle lanes and other traffic schemes that do not generate any revenue at present but cost hundreds of millions of pounds.

Yours, Roger Lawson  

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Mayoral Election Postponed and Transport Price Freeze Unfrozen

Among last weeks epidemic news and financial turmoil, two important items of news for Londoners sneaked out. First the election for Mayor of London has been postponed – possibly for a year, along with other local Government elections due in May. With Sadiq Khan well in the lead in the polls, that might be welcome news for other candidates as it will give them more time to gather supporters.

One of the current Mayor’s vote winning policies at the last election was his promise to freeze public transport fares. That proved popular with many Londoners despite the fact that it was financially rash and has resulted in a big deficit in Transport for London (TfL) finances and limited investment in new transport services. The Mayor has now decided to drop that commitment but he is committing to limit rises in Underground fares to inflation and continuing to freeze bus fares – if he gets re-elected of course.

Is that wise? One thing he appears to have overlooked is that TfL finances depend to a great extent on fare-paying passengers. Bus trips have been falling and the coronavirus impact will undoubtedly reduce the numbers travelling on London buses and the underground substantially as more people work from home and events in London are cancelled. Nobody is going to be travelling on crowded public transport if they can possibly avoid it by walking, cycling or getting taxis instead.

This might have a very severe short-term impact on TfL’s finances as a lot of TfL’s costs are fixed so any hit to revenue results in big financial losses. But TfL is already loaded with debt due to the fares freeze so may no longer be credit-worthy. That will be a real problem for the new Mayor whoever it is.

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