“TfL expects £1bn deficit by next year”.
That was the headline in an article in today’s Financial Times. Apparently they have seen an internal email written by finance director Patrick Doig that the organisation faced an operating loss of £968 million in 2018/19 which he said was “clearly not a sustainable position…”. The deficit in the current financial year is expected to be £785 million this year which shows how rapidly its position is being eroded.
There are several reasons given for this erosion in their financial position – the Mayor freezing public transport fares (estimated cost £640m) did not help, but the big problem is falling revenue from users. Both bus and underground journey numbers have been unexpectedly falling.
Is this because more people are not travelling, e.g. doing internet shopping and working from home? Or is it because they have chosen to travel by bike (usage is growing), or find it is as cheap and a lot more comfortable to call Uber? Or perhaps it’s because some London residents are selling up and moving to the country with house prices peaking in London, or returning to homes in the rest of Europe. Perhaps those French, Polish, Romanian and other residents are worried about their future after Brexit? Perhaps they just got tired of life in London, unlike Dr Johnson who did not have to suffer the mediocre standards in TfL’s public transport provision.
The Mayor has only recently published his Business Plan for the years to 2022/23. But you can see exactly why the Mayor is so keen to raise as much as £300 million from Londoners via the Ultra Low Emission Zone (ULEZ) charges. As we have said before, the ULEZ is about money, not about improving the health of the population or cleaning up London’s air.
A comment in the FT article from Gareth Bacon, London Assembly Conservative Members, said there was now “serious cause for concern” about Mr Khan’s “cavalier” financial stewardship of TfL.
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