Category Archives: Financial and Taxes

Mayor’s Budget – Another Stinker

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Sadiq Khan has published a proposed budget for the GLA (including TfL) for 2023-24 (see https://www.london.gov.uk/who-we-are/governance-and-spending/spending-money-wisely/mayors-budget ).

This is yet again a budget reliant on central Government bail-outs rather than a budget that keeps expenditure within income. It’s a “spend, spend, spend” socialist budget.

1.       This budget again blames central Government for inadequate funding of London’s public services and in particular TfL (see page 4 Paragraph 1) when the budget has not been set so that the GLA operates within its available income. This is financially reckless.

2.       The document identifies a new concept of “climate budgeting” so as to achieve Net Zero Carbon by 2030. This is financially impractical to achieve and asks effectively for even more central Government funding when there is no cost/benefit justification provided. See page 25.

3.       The budget proposes a substantial increase in “Strategy and Communications” (see page 33) which is not justified. The Mayor already spends too much on public relations and social media activities a lot of which is in essence political promotion of the Mayor.

4.       The budget includes the cost of expansion of the ULEZ to outer London which involves significant capital expenditure (see page 105). It is now budgeted that income from the CC, LEZ and ULEZ taxes will be over one billion pounds in 2023-24 (£1,028 million – see page 74). In effect private motorists and commercial vehicle operators are subsidising public transport losses within TfL. This is unfair and unreasonable. There is no financial justification for expansion of the ULEZ.

5.       The Mayor’s attempts to reduce traffic congestion by using taxation in the CC, LEZ and ULEZ schemes has proved to be totally ineffective. Recent media reports confirm that London is now the most congested city in the world. The budget does nothing to reverse this trend as there is no expenditure proposed to improve the roads or traffic flows.

6.       In summary, this budget is financially incompetent and continues to support expenditure that is higher than the income that TfL and the GLA will receive. This is not a budget set on sound financial principles but one set based on political prejudices and unrealistic policies.

Please send in your own objections to GLAbudget@london.gov.uk within the next two days.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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The Financial Lunacy of the ULEZ Expansion

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The London Evening Standard have published a good article highlighting the financial lunacy of the ULEZ scheme. By 2027 they suggest that the scheme will generate zero income even though it will cost £160 million to implement the expansion.

TfL might recover the £160m in the first year from charges but the vehicle population will rapidly become compliant and after that the cost of running the scheme might exceed income from charges on non-compliant vehicles and fines.

Of course that assumes that the vehicle standards remain the same but don’t bet on that! The Mayor could use the new cameras to impose a London-wide charging scheme on all vehicles which is clearly his ambition.

The article also reports that some boroughs may try to frustrate operation by blocking the erection of cameras which no doubt many residents of the outer London boroughs will welcome.

Comment: This is yet another example of the financial incompetence of Sadiq Khan. Spending money to enable the collection of more taxes is just another financial imposition on London residents that will increase the cost of living.

Remember there is no significant improvement in air quality from the ULEZ expansion. It’s just a money-making scheme.

Evening Standard article: https://www.standard.co.uk/news/london/ulez-expansion-sadiq-khan-pollution-scheme-300m-zero-2027-london-vehicles-b1050769.html

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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Another Bail-Out for TfL Agreed

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Transport Minister Grant Shapps and Mayor Sadiq Khan have agreed another £1.6 million of funding for Transport for London (TfL) as part of a “long-term settlement”. That now makes a total of £6 billion of Government funding which of course comes from taxpayers not just in London but from the whole country. That’s about £100 for every man, woman and child in the UK.

The funding will support new Piccadilly line trains, as well as modernisations and upgrades across the District, Metropolitan, Hammersmith and City and Circle lines. It will also support the long-awaited repair of Hammersmith Bridge, the extension of the Northern Line, improvements to Elephant and Castle station and £80 million every year for active travel schemes (mainly cycling schemes).

The Mayor has agreed as part of the settlement to reform pensions and work on the introduction of driverless trains on the underground. But he is not happy with the outcome. He said in a press release: “The Government is still leaving TfL with a significant funding gap, meaning we will likely have to increase fares in the future and still proceed with some cuts to bus services. There are also onerous strings attached, such as the Government’s condition requiring TfL to come up with options for reform of TfL’s pension scheme at pace, which could well lead to more industrial action and more disruption for commuters”.

Comment: By funding gap he means TfL will continue to lose money. Users of TfL services, particularly bus passengers, will continue to be massively subsidised instead of paying the true cost of their journeys. Why should that be so?

Grant Shapps has yet again avoided the proper decision which should have been to take control of TfL away from the Mayor. Will the Mayor stand up to unions when strikes are threatened over changes to working practices and pension schemes? I doubt it.

Grant Shapps Press Release: https://www.gov.uk/government/news/future-of-londons-transport-network-secured-with-governments-multi-billion-pound-settlement

Sadiq Khan Press Release: https://www.london.gov.uk/press-releases/mayoral/statement-from-the-mayor-on-tfl-funding-1

Roger Lawson

Twitter: https://twitter.com/Drivers_London

TfL Board Meeting and Finances

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TfL Board Meeting and Finances

gold colored coins near calculator

There was a Transport for London (TfL) Board Meeting on the 9th of August to discuss negotiations with the Government on finance. Such meetings should be public but in fact almost all the meeting was closed to the public; even the Government representative who has a seat on the board was excluded.

But there is an interesting board paper that spells out the dire financial position of the organisation – see link below. In summary they need £900m in Government subsidies to stay afloat in the current financial year, i.e. to offset the shortfall in revenue from the pandemic.

The paper says this: “The 2022/23 TfL Budget is based on a ‘managed decline’ scenario. This involved significant service reductions, deteriorating asset condition and no new enhancement schemes. This not only would mean that we will fail to make progress on critical priorities such as safety, decarbonisation and air quality, but it would trap London’s transport network in a vicious circle of deteriorating services and declining demand. Avoiding managed decline is critical to supporting the London economic recovery, and therefore the national economic recovery, following the pandemic”.

In essence they want to continue spending instead of cutting their cloth to meet the new circumstances. They need £1.2 billion just to balance the budget in the current financial year and even more for “longer-term capital funding to avoid the managed decline scenario”.

Looking at TfL as a business (which is what it is) this is surely pure hogwash. Businesses that do not reduce their expenditure to match income end up going bust. As will TfL unless they change their approach.

It’s interesting to look at who is on the board of TfL. It’s full of academics, trade unionists and politicians, not business people. And it’s chaired by Sadiq Khan. This is one of the key problems. Until TfL is taken out of the control of the Mayor and the board is replaced by people with business experience of running transport organisations, nothing will change. They will continue to rely on Government (i.e. taxpayer) hand-outs rather than taking the tough decisions necessary.

Roger Lawson

Board Paper: https://board.tfl.gov.uk/documents/s18400/board-20220809-item03-Update%20on%20TfL%20Funding.pdf

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Comments on the Energy Security Bill and the Next Prime Minister

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Yesterday the Government introduced the Energy Security Bill into Parliament. It is good to see that the Government continues to function after the recent political upheavals, but would it not be good to get back to some normality as opposed to the recent dramas?

The new Bill aims to:

–         Boost Britain’s energy independence and security.

–         Attract private investment, reindustrialise our economy and create jobs through new clean technologies, as well as protect consumers.

–         Introduce new powers to help prevent disruption to fuel supply because of industrial action, malicious protests and on grounds of national security (comment: surely to be welcomed).

See https://www.gov.uk/government/news/plans-to-bolster-uk-energy-security-set-to-become-law  for details.

It includes new powers which will enable the extension of the energy price cap beyond 2023, shielding millions of customers across the country from being charged “unfair” prices as they call it. Or to put it another way – to protect consumers from the real world of market prices and hence making it uneconomic for some companies to operate in this sector. This is surely not a very “conservative” approach!  There are better ways to subsidise household fuel bills.

The clear objective is to reduce reliance on imported oil and gas and encourage offshore wind farms, nuclear power generation and other infrastructure that we need to achieve carbon reductions although the growth of nuclear is still at a snail’s pace. It is certainly worth reading the document on the Bill’s contents and the associated British Energy Security Strategy mentioned in it.

But will any new Government back-track on the net zero commitment which has made for some very expensive (the public do not know how expensive) policies as regards motor transport.

Let us hope that any new Prime Minister does not get the job by promising more tax cuts. It’s clear that Government expenditure is rising by commitments in the Energy Security Bill for example and in many other areas when what is really needed is reducing the amount of our wealth that is spent by the Government. In the last couple of years we have had a quasi-socialist economy with more willingness to interfere in the economy by the Government. But civil servants consistently back the wrong horses.

What the country really needs is a period of stability under a competent leader who everyone can support.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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Transport for London Quarterly Performance Report – Clearly a Financial Basket Case

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Transport for London (TfL) have published their quarterly performance report. It covers the quarter to 11 December 2021 and gives some useful information on the slow recovery in passenger numbers from the pandemic lows.

In Q3 demand plateaued however and is still only 68% of pre-pandemic levels. But to really get a good picture of how TfL is a total financial basket case you only have to jump to the Appendix. That shows that the “Net Cost of Services” is £2,267 million (i.e. £2.3 billion of costs more than income) for the quarter. This deficit is only made up by £3.4 billion of “Grant income” no doubt mainly from central Government.

Indeed the Chief Financial Officer clearly thinks that he is doing a great job because he says “we are performing better than budget” while staff numbers have actually increased despite passenger numbers falling.

Somebody asked me recently how much London buses were subsidised. I did not know the immediate answer although the last time I looked at this it was an enormous figure. But this report gives you guidance on it. The Appendix reports that for the Operating Segment of “Buses, streets and other operations” there is a deficit of £754 million for the quarter and that probably includes the income from the Congestion and ULEZ charges.

It is clear that TfL are still relying on enormous Government bail-outs to stay afloat and that shows no signs of changing.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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Sadiq Khan Wants Your Views

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The Mayor of London, Sadiq Khan, wants your views on the future of London. He has issued a survey which is available on the Talk London platform which asks a number of questions and also allows you to post some general comments.

The survey starts out by asking you to pick your top three choices from the following changes you would like to see in the next ten years:

Safer streets for walking and cycling; Cleaner streets; “Improved parks and green spaces; More attractive outdoor public spaces; More trees and greenery outside of parks; More workplaces; Better public transport; More housing; More attractive high streets and town centres; More physically accessible public spaces; Don’t know”.

This list does not include my top choices at all which would be: “1) Better private transport (i.e. more road space and less congestion, with fewer closed roads, bus lanes and cycle lanes); 2) Fewer people and less encouragement to move into London to reduce the stress on housing provision and transport provision; and 3) Lower taxes such as the ULEZ, Congestion Charge and Mayor’s Council Tax Precept.

I might vote for more trees and greenery but more housing we do not want in an already congested city.

In other words, it’s a typical biased survey from the Mayor that asks both the wrong questions and asks leading questions.

Some of the later survey questions are more innocuous but miss the opportunity to really find out what Londoners want. It then takes you to a section where you can add general comments on a few issues.

This is a good opportunity to give your real feelings about what how you think London should be improved (and you could of course mention the removal of Sadiq Khan as a starter). So please do respond to this survey.

You’ll need to register for the Talk London platform first but that’s easy. Go here to start: https://www.london.gov.uk/talk-london/planning-londons-future?

Roger Lawson

Twitter: https://twitter.com/Drivers_London

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Using PCNs to Raise Council Funds – It’s Unethical

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With local Council budgets under severe strain, they have looked at raising money by maximising PCNs being issued. These can be issued for breaches of bus lanes, no entry signs in Low Traffic Neighbourhoods (LTNs), infringement of yellow box junctions, illegal turns and for a number of other reasons.

Many millions of pounds are now being raised by some London Councils in this way, totally unethically, particularly by those Councils who are prejudiced against motor vehicle use. The number of fines issued by the London boroughs and TfL in 2020-2021 are given in this document: https://www.freedomfordrivers.org/_files/ugd/84d4d3_2184322bb2af44c18e1a16ce65e3fbf6.pdf

You can see that the worse London councils are Croydon, Hackney, Hammersmith & Fulham, Islington, Lewisham and Newham with a large number issued by Transport for London (TfL) also.

In Lewisham for example, after the LTN was introduced in Lee Green the Council issued 87,443 PCNs for infringement in Dermody Road between August 2020 and January 2022. These would have been picked up by camera enforcement systems. There were also 5,462 issued in Ennersdale Road, 12,002 in Manor Lane and 19,961 in Manor Park.

The campaign group One Dulwich also reported these figures: “More than £6.6 million paid to Southwark in fines. An FOI to Southwark has revealed that 123,853 fines were issued in 2021 to vehicles going through the timed closures on Burbage Road, Turney Road, Dulwich Village and Townley Road, raising a total so far of £6,623,517. Once all fines are paid (calculating 123,853 PCNs at the lower rate of £65 each), the total will be more than £8 million. With this kind of annual revenue, the financial benefits of continuing with the Dulwich Streetspace scheme must have been part of Southwark’s thinking”.

You can see now why Councils are so keen to install camera-based enforcement systems – they are actually money spinners because the money they generate exceeds the cost of installation and operation.

A recent example is a proposal from Lewisham Council to introduce up to five yellow box junctions in a recent “Budget Reductions Report” to the Sustainable Development Select Committee. The capital cost would be £100,000 but the first-year rate of return is given as £150,000, i.e. there is a payback in under one year. It’s a highly profitable measure! But there is no evidence that such box junctions actually improve the flow of traffic.

In summary, LTN schemes enforced by cameras are not about reducing vehicle use, improving road safety or improving the environment. They are about generating money in a totally unethical way.

The approach by local councils and the number of PCNs issued very much depends on the policies set by Councillors. Please bear that in mind when voting at the forthcoming May Council elections.

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Sadiq Khan’s Plan to Screw Drivers Even More

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Two days ago (on 17/01/2022) I pointed out on this blog that the Mayor’s Budget document spelled out that road pricing in London was definitely anticipated. His budgets for future years depend on it.

It became clearer what he is planning yesterday when both the BBC and London Evening Standard provided more details of the Mayor’s plan – see links below.

His proposals include a small daily charge on everyone who drives in London – perhaps £2. He claims this is required based on a report commissioned by City Hall that found that a 27% reduction in London’s car traffic was required by 2030 to meet net-zero ambitions. He has the powers to introduce this but he is also considering a London entry charge for anyone who drives in from outside. A boundary charge (of perhaps £3.5 per day) would require Government consent when they don’t currently favour it.

Longer term, by the end of the decade, he would like to introduce a pay- per-mile system although the technology to do that is not yet available.

In the meantime it looks very likely that he will extend the ULEZ to the whole of London.

The Mayor has said “I have got to make sure there is a disincentive to drive your car, particularly if it is petrol or diesel, when there are alternatives, like public transport”. Yes he would like to force everyone to use public transport which of course he has a financial incentive to advocate. It’s yet another reason to take TfL out of the control of the Mayor.

The justification for these measures is to tackle air pollution and defeat climate change. It certainly won’t do the latter and there is a very good debunking of the claims of death from air pollution on the web site Not a Lot of People Know That – see link below.

Improving air quality is certainly something the Freedom for Drivers Foundation supports but there needs to be a clear cost/benefit and the measures our national Government has been taking have been by far the most effective to reduce air pollution. London’s measures introduced by Sadiq Khan have been enormously financially damaging with very little benefit. He postures about saving the world while spending your money ineffectively.

BBC Report: https://www.bbc.co.uk/news/uk-england-london-60030127

Evening Standard Report: https://www.standard.co.uk/news/london/sadiq-khan-clean-air-charge-petrol-diesel-cars-ulez-expansion-london-b977223.html?

Deaths from Air Pollution: https://notalotofpeopleknowthat.wordpress.com/2017/08/15/claims-of-40000-deaths-from-air-pollution-debunked-by-death-statistics/

Roger Lawson

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Sadiq Khan’s Budget for London – Mayor Cuts Bus Services but Plans for Road User Charging

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Sadiq Khan has published his proposed Mayor’s Budget for 2022-23 which covers support for Transport for London and other services in the capital.

His foreword says this: “At the time of writing, London is in the grip of a serious crisis. Our city has more COVID-19 infections than any other UK region, we are seeing an explosive and alarming rise in the number of Omicron cases, and our NHS and other public services are being placed under immense strain because of staff absences caused by sickness and the need for key workers to self-isolate. The government is also still refusing to properly fund London’s public services, particularly Transport for London, the Met police and the London Fire Brigade. It’s against this extremely challenging backdrop that I’m having to take a series of tough decisions to ensure that the progress we have made towards building a fairer, greener, safer and more prosperous London is built upon, rather than put at risk. The pandemic is the only reason TfL is facing a financial crisis”.

The last sentence is a lie and he yet again blames the Government for his own financial mismanagement over the past several years that meant that TfL had no financial resilience to meet the unexpected impact of the Covid epidemic.

The Mayor goes on to say “However, as a condition for the emergency short-term funding, the government is forcing us to raise additional revenue in London through measures, like council tax, that will unfairly punish Londoners for the government making our transport network so dependent on fares income”.

Why should not Londoners pay for the transport network they use? Either in fares or council tax (preferably the former)? Basically he is begging the Government to fund TfL rather than getting Londoners to pay while TfL continues to run uneconomic services instead of adapting its business to meet the new market conditions.

Sadiq Khan’s foreword is a classic example of him blaming the Government for his problems. We need less politicking and more constructive and practical steps to get TfL back on an even keel.

I’ll pick out just a few interesting points from the budget document:

  • The budgets anticipate a reduction in bus services of 18% by 2024-25.
  • Road pricing is definitely anticipated. It says on page 56: “In addition, further to the requirements of the 1 June 2021 funding agreement, the budget assumes a widening of road user charging schemes in later years to deliver the Mayor’s transport policies, subject to a full impact assessment, consultation as appropriate, and decision-making processes. The implementation costs have not at this stage been included as discussions are still ongoing”.
  • The Mayor talks about cost reductions in TfL but in reality the total operating expenditure rises from the expected £6.8 billion in 2021-22 to £7.5 billion next year.
  • The deficit between operating income and expenditure in TfL remains high at £1.35 billion in 2022-23 and is still £638 million in the following year. That ignores the capital expenditure and other items making the total “financing requirement” of £2.1 billion for next year. See page 95 of the budget document for the breakdown. Clearly the Mayor is expecting the Government to come up with the cash to finance these deficits which is surely unreasonable.
  • Expected income next year from the Congestion Charge, LEZ and ULEZ schemes is £754 million which just shows how much money is being taken out of the London economy and from the pockets of Londoners to support the Mayor’s grandiose plans. This is a charge on Londoners for which there is no countervailing financial benefit.
  • The proposed adjusted basic amount of council tax is £396 for a Band D property (an increase of £32 over 2021-22). Yet again the Mayor is increasing his council tax precept at more than inflation when the general population is facing major cost of living increases from food and energy bills. Normally such a large increase would require a public referendum (see pages 109/110) but the Mayor is apparently asking the Government to waive that requirement.

Summary and comment: This is a typical socialist “spend, spend, spend” budget where instead of cutting the cloth to what he can afford the Mayor wants to continue spending regardless of economic and market conditions. The budget should be reconsidered and brought more into line with reality.

Please make sure you submit your own comments on the budget by sending an email to GLAbudget@london.gov.uk (but it needs to get there by the 18th January so it’s URGENT).

Mayor’s Budget: https://www.london.gov.uk/sites/default/files/mayors_consultation_budget.pdf

Roger Lawson

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