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London Assembly report says TfL ‘does not know’ how to fund Sadiq Khan’s fares freeze

September 8, 2016 - Martin Hoscik@MayorWatch

Transport for London has yet to identify how to fund Mayor’s Sadiq Khan’s flagship £640m fares freeze according to a London Assembly report published today.

During May’s election Mr Khan promised to freeze fares for the full mayoral term, a pledge TfL initially said would cost up to £1.9bn. Mr Khan always denied that figure, arguing the real cost was around £450m.

By the time the Mayor unveiled the details of his freeze in June, City Hall’s official costing for the policy was £640m over the four year mayoral term.

Some of the difference between the original TfL projection and current figure is because the freeze doesn’t cover Travelcards, or daily and weekly Oyster and contactless card caps.

Those restrictions led to accusations that the Mayor had broken his promise to voters, although Mr Khan says underlying individual fares will be frozen at 2016 levels for his full term.

Mr Khan’s office has so far declined to release TfL’s advice to him on the affordability of his pledge, despite Labour Assembly members successfully persuading former Mayor Boris Johnson to release the information underpinning his annual fares rises.

AMs previously argued that access to this information was essential if they were to properly scrutinise the Mayor’s budgets, and during Mr Johnson’s term the Information Commissioner ruled that the public interest in seeing it outweighed the Mayor’s right to confidential advice.

Today’s report, published by the Assembly’s Budget and Performance Committee, could explain why Mr Khan appears reluctant to be as transparent as his predecessor.

In it AMs says that although TfL has identified £117m of savings over the next 2 years, the organisation has yet to work out how it can fund the policy in later years.

As part of the savings identified to date, Transport Commissioner Mike Brown has announced reductions in the number of senior managers and agreed to implement the Mayor’s manifesto commitment to merge engineering teams within TfL.

However Assembly Members say the changes are being implemented before the publication of the Mayor’s Transport Strategy, a formal document which sets out priorities for the years ahead, and warn that making significant organisational changes before the agency knows what it will need to deliver risks leaving TfL not fit for purpose.

The report says “TfL should not make any radical changes now that could limit its ability to implement the Mayor’s Transport Strategy and keep London moving.”

AMs also claim savings plans announced by Mr Khan and TfL are “unsupported by evidence” and say a pledge to cut spending on agency staff by 50 per cent appears to be “arbitrary”.

Another area of concern raised by AMs is the Mayor’s decision, first reported by this site, to force TfL to sell off land far below its true market value in order to deliver on his affordable housing targets.

They warn this will limit Transport for London’s ability to generate income from property development, thereby undermining efforts to replace lost fares revenue and axed government grants through commercial activity.

Unless major efficiency savings can be identified or commercial revenue maximised, the report says major projects such as the expansion of Cycle Superhighways or the building of a new London Overground station at Old Oak Common could be at risk of being scaled down or dropped entirely.

Committee chairman, Gareth Bacon AM, said: “Major capital investment in the transport network is needed to keep London moving as its population continues to grow. But the funding to support this investment is now at risk.

“Government funding will be cut to zero faster than TfL had previously expected. And the Mayor’s fares freeze will put another dent in TfL’s finances.

“Will TfL be able to deliver the Mayor’s transport priorities? What we heard in this investigation hasn’t exactly filled us with confidence.”

A TfL spokesperson said: “We welcome the Committee’s report and will set out our finances later this year in a revised Business Plan which will deliver all of the Mayor’s commitments to London.”

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Tagged With: Fares Freeze

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