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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