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.
The Evening Standard has published an article by London’s Transport Commissioner, Andy Byford (see Reference 1). In it he welcomes the £1 billion in Government funding to keep Transport for London running for another few months.
But like Sadiq Khan’s press release over the deal (see Reference 2), it complains about the lack of a “long-term settlement”. The Mayor even called it “yet another sticking plaster”. They do not seem to understand that the basic problem is that they are looking for taxpayers (i.e. you and me as represented by the Government) to fund an uneconomic business called Transport for London.
Andy Byford does spell out where some of the money will go which includes this: “And it means we can continue with innovative and creative schemes to decarbonise transport by 2030 and to clean-up London’s air through the expansion of the Ultra-Low Emission Zone, further electrifying the bus fleet, promoting active travel — including more Santander cycles — and improving road safety”. In other words, they are spending taxpayers’ money to expand the ULEZ (a very ineffective scheme on a cost/benefit analysis) and provide more cycles. Clearly the approach seems to be to spend their way out of trouble in the socialist paradise of London.
The Mayor says that TfL only needs emergency funding from the Government because the Covid epidemic cut fare income by 90%. That might have been true in the short term and over a few weeks but the details do not seem to have been disclosed. Usage of public transport is fast recovering so this may be only a temporary problem and the financial problems of TfL are a long-standing failure to run a prudent budget that takes into account not just operating costs but capital expenditure and financing costs in addition.
Regrettably the Mayor is acting like the animal that bites the hand that feeds it with his attacks on the Government.
Gareth Bacon, leader of the GLA Conservatives, has published a very interesting document entitled “The Cost of Khan”. It supplies a half-term report on the regime of Mayor Sadiq Khan and the negative impact he has had in certain areas (crime, planning, parking, housebuilding for example). In essence he suggests one of the key problems is financial mismanagement.
Of particular interest to our readers will be his comments on the activities of TfL (Transport for London) and the budget for that organisation. It covers:
Cancellation of new tube trains for the Jubilee and Northern Lines that would have provided much needed extra capacity. That might have saved £600 from the TfL budget but that’s desperately needed after Khan’s expensive promise to freeze public transport fares which cost at least £640 million in foregone revenue. Even that promise was only partly kept.
The pay of executive staff in TfL. The number who are paid more than £100,000 p.a. increased by 25% last year so there were 576 such employees. Is the Mayor really cutting the flab out of TfL budgets as he promised to do?
The “T-Charge” which was introduced last October and will cost Londoners £23 million a year despite the Mayor’s own Impact Assessment saying it will have only a negligible impact on pollution (and that has been borne out by real data since).
Nominee passes which you may not be aware of are highlighted. These allow TfL employees to nominate family members and anyone who resides in the same household to obtain free travel. Even flatmates qualify! There are 39,884 people who are nominees and the cost might be equivalent to £32 million in lost revenue per year.
Those and other reports show how the Mayor has been so wasteful of financial resources with the result that he is desperate to raise money from the T-Charge and the ULEZ charge which will impose major unnecessary costs on Londoners. In the personal view of this writer TfL continues to be a massive and very expensive bureaucracy which is unaccountable to the public. It formulates transport policy that will increase the bureaucracy and then does public consultations designed to get the right answers. TfL needs major reform but the Mayor does not seem to have it under control.