TfL accused of hindering Assembly’s scrutiny of Mayor’s budget

Fares will increase by up to 4.2% next month with more increases planned for future years.
A new London Assembly report accuses Transport for London of hindering its scrutiny of the Mayor’s 2013/14 budget by refusing to provide sufficient information about fare increases.

The Assembly’s pre-budget report says TfL has refused to provide information at “an appropriate level of detail” necessary to allow Assembly Members to “understand the financial and service implications” of the options it puts before the Mayor when he sets fares each year.

TfL’s failure to co-operate means “it is impossible for the Assembly to carry out its scrutiny role effectively.”

The all-party report says transparency around the fares setting process is necessary because TfL has been set very low levels of budget savings in coming years.

The capital’s transport operator has been asked to make savings of just £24 million in 2013-14 and £89 million in 2014-15 from its £8bn annual budget. These savings account for just “1.4 per cent of TfL’s budgeted total operating expenditure in those years.”

By comparison London’s fire authority, which is considering axing fire stations and engines to balance its budget, “has been asked to save £30 million in 2013-14 and £65 million in 2014-15, making up 8 per cent and 16 per cent of its budget in those years.”

AMs have also highlighted how previous years have seen Londoners hit with above inflation fare increases only for TfL to receive a windfall when passenger numbers exceeded its forecasts.

Over the past two years this lead to TfL collecting “over £250 million of additional, unanticipated, fare revenue” which was then used to reduce its borrowing ahead of schedule rather than holding down fares in future years.

TfL’s recently published draft Business Plan suggests fares will continue to increase by one per cent above inflation each year. The Assembly has been told that for each percentage point fares increase, TfL receives approximately £34 million in additional revenue.

AMs say the Mayor should consider limiting future increases to ease the financial pressure on Londoners and have called on TfL to “set out the implications of living within inflation-only fares rises for the remainder of the Mayoral term.”

In addition the report calls for TfL’s advice to the Mayor to be made publicly available to allow the Assembly to give proper consideration to his fares decision.

The Mayor’s budget will be published in early January 2013 and will then be considered by the Assembly at a series of public meetings.