Boris Johnson has been urged to “start a conversation with Londoners” about his fares policy as a London Assembly report warns the capital’s transport network could be facing a £1.7billion funding gap by 2018.
The report by the London Assembly’s Budget and Performance Committee warns that the Mayor may have to “increase fares by an inflation-busting amount, reduce services, defer or cancel planned improvements, or try to find further efficiency savings to the £2.4 billion he has already asked Transport for London to find.”
Committee chair John Biggs said: “Depending on the length and severity of the recession, the next few years will be very challenging for the Mayor and Transport for London. Finding ways to plug the gap that do not impact on services or place a large financial burden on fare payers will be difficult.”
The Committee says TfL is already facing a shortfall of £112m owing to rare revenue being lower than expected due to the impact of the recession. However TfL insist this “is not a new projection and the £112m was taken in to account when TfL’s budget for 2009/10 was published earlier this year. We therefore do not recognise the Assembly’s range of numbers.”
Steve Allen, TfL’s Managing Director of Finance, said: ““Clearly TfL is not immune from changing economic conditions and, among other things, we continue to seek further savings and efficiencies over and above the £2.4bn we are already delivering. However, lower RPI means that we also benefit from some lower costs.”
The Mayor of London’s Transport advisor, Kulveer Ranger, said: “Every organisation has to deal with changing economic conditions. But it is unrealistic to predict that the economic climate will remain stationary until 2018. Therefore it is inappropriate to propose options based on that assumption. Every year the Mayor carefully reviews all of the relevant factors before deciding on a fair and affordable fares structure.”
Download the full report here.