After threatening the Government that TfL would have to make deep cuts to public transport in London unless they came up with some money by the close of yesterday, they did agree a bail-out. But with some conditions attached.
The Government has agreed to provide TfL with £1.5 billion in grants and loans to enable TfL to continue operating for at least a few months. With most of TfL’s income coming from bus and underground fares, the collapse in usage as people avoid public transport in the virus pandemic has resulted in massive losses at TfL which are still continuing. In addition the Mayor’s previous decisions to suspend increases in public transport fares, which he made to ensure election, have been enormously damaging to TfL finances and meant they were already budgeting massive deficits even before the epidemic hit.
The suspension of the Congestion Charge and ULEZ has also not helped, plus the fact that you can avoid paying bus fares by entering through the central door as is now required. Even TfL’s advertising revenue has fallen as advertisers’ budgets have fallen and they won’t pay when far few people are using public transport. With social distancing required, even the capacity of buses and the underground will be severely restricted for some time, even if people can be persuaded to use it.
The details of the agreed deal have not yet been disclosed, but the BBC reported that it includes a commitment to raise public transport fares by inflation plus 1%, two seats on the TfL board and a complete review of its finances. TfL has also committed to run a full service when previously they were cutting to 75%.
Mr Khan as usual blamed the Government rather than his own financial incompetence. This is what the BBC reported as being said by someone in the Mayor’s office: “They have forced ordinary Londoners to pay a very heavy price for doing the right thing on Covid-19 by hiking TfL fares, temporarily suspending the Freedom Pass at busy times and loading TfL with debt that Londoners will pay for in the long run”.
Grant Shapps, Transport Secretary, said it was wrong for the rest of the country to be bailing out Londoners but in fact Londoners who never use public transport will be paying a lot of the bill anyway via the Mayoral Council Tax Precept and in other ways.
What should the Mayor have done instead of running up a large deficit, and what should he do now?
Clearly many TfL projects have been very expensive. Building cycle superhighways has not come cheap and schemes such as Crossrail have very marginal cost/benefit ratios. The Mayor’s office and TfL management costs have also grown as the Mayor built an empire at taxpayer’s expense. It seems likely that a number of projects such as to expand the underground network will now have to be cancelled. Subsidies to bus operations which have been running at about £1 billion per annum could never be justified except by the desire of the Mayor to win popularity and elections.
The Mayor and TfL have actually cut their bus income by introducing road schemes that slowed traffic including buses, thus cutting bus ridership. You cannot solve these problems by simply encouraging cycling. The average distance travelled by a London commuter is 13 miles per day with many travelling much longer distances. That makes it impractical for many people to cycle even if they had an inclination to do so. The danger of cycling puts many people off using it for long journeys. Department for Transport (DfT) figures show that there are 1,139 serious injuries and 29 deaths for every million miles cycled, while for car drivers the figures are only 27 and 2 respectively.
The Mayor and central Government should face up to realities and work on the following:
- Free up the road network to enable more commuting via cars/taxis and improve bus services. Stop reducing road space.
- Provide more parking facilities at low cost.
- Encourage more tele-commuting by investing in broadband services and support.
- Encourage businesses to relocate out of congested central London into the London suburbs and elsewhere.
- Retail facilities and hotels/restaurants should be relocated similarly.
- We should move away from the concentration of businesses and facilities in central London to have a wider distribution so we are not reliant on public transport so much.
- Bus and underground services should pay for themselves. Handouts for political reasons (such as the Freedom Pass) should be severely restricted to those who really do need travel support, i.e. those who cannot afford to pay.
- The ULEZ and Congestion Charge should be scrapped as they don’t really provide a sensible return on the investment and operating costs. They are simply a financial burden on Londoners with very little benefit.
All it needs is strong and wise leadership from the Mayor of London to get Londoners through the current crisis, but will we get it? It seems unlikely from the current Mayor.
All that is likely to happen is that the TfL deficit will continue to grow after this short-term bail-out unless someone really gets to grips with the underlying financial problems.
P.S. Government announcement here: https://www.gov.uk/government/news/government-grants-transport-for-london-funding-package? They apparently still think the problems can be solved by encouraging cycling.
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