London Assembly members are to examine whether sponsorship of transport services such as the bike hire scheme and cable car delivers value for money to the taxpayer.
The schemes were originally promised to be built without the need for public subsidy, but in both cases the sponsors ultimately paid only a fraction of the final costs.
In the case of the bike scheme, Transport for London and City Hall repeatedly told Londoners and the Assembly that Barclays was paying £50m.
However it later emerged the bank was only contracted to pay £25m and that TfL had failed to turn a promise to pay an additional £25m into a signed contract.
This led to TfL managers discussing ways to deny that they would be left “out of pocket” on the deal despite privately admitting this was the case.
A public meeting on Wednesday will herald the start of a wide-ranging investigation into both schemes’ finances, the lessons TfL has learnt and how it plans to manage future sponsorship deals.
The Assembly’s Budget & Performance Committee will question a number of witnesses, including Deputy Mayor for Transport, Isabel Dedring, and Graeme Craig, TfL’s Commercial Director.
Committee chair, John Biggs AM says: “At a time of ever shrinking public sector budgets Transport for London is right to look for alternative and novel forms of funding public transport improvements.
“But the lure of sponsorship cash must not warp public transport priorities and TfL must ensure they achieve a credible price for the taxpayer in exchange for these unique marketing opportunities.
“Our investigation will look at how future projects can make the best use of sponsorship to keep London moving.”
The meeting will take place on Wednesday, 25 June from 2pm in The Chamber at City Hall.
