Transport for London has denied claims that it is sitting on a £890m cash surplus which could be used to fund a fares freeze.
The latest credit report from Moody’s claims the capital’s transport body has “a budgetary surplus of GBP 890.6 million”.
The report has prompted the London Assembly Labour group to repeat calls for Mayor Boris Johnson to freeze fares.
TfL’s business plan predicts a fares increase each year until 2015, money it and Mayor Johnson say is needed to deliver vital service improvements for passengers.
However Val Shawcross, Labour’s transport spokesperson on the Assembly, says “Londoners are struggling with rising rent, fuel and childcare costs” and has called on the Mayor to “ease the burden and abandon his planned above inflation fare rise later this year.”
She added: “This report shows that the Mayor has the flexibility to, at the very least, freeze fares. I’m not surprised that he quietly published this report on his website late yesterday.”
TfL says claims of a large cash surplus are based on a “misunderstanding” of both the report and its own accounts.
Steve Allen, Managing Director of Finance, told MayorWatch: “We do not have an £890m surplus. Every penny in TfL’s budget is allocated to be spent on running and improving London’s transport network.”
Mr Allen added: “TfL’s grant from Government, which funds both revenue and capital expenditure, is reported as revenue expenditure in the Moody’s report and therefore shows up as a revenue surplus. However, most of this grant is used for capital expenditure.”
Current capital spending includes a major upgrade of the Tube network and the construction of Crossrail.
The report, which can be viewed on the TfL website, highlights TfL’s reliance on Government grants and “high borrowing levels“ to fund new projects, noting that “the need to provide services at politically acceptable prices limits the extent to which prices can be raised”.