The context behind the Government’s London transport interferences

To say that recent negotiations between the Government and London have been tense over the finances of Transport for London would be putting it mildly.

Transport for London’s main source of income is fares. It is the least subsidised major transport system in the world. 72% of it’s funding comes from Passenger fares. Before the Coronavirus period, TfL’s finances were in a good condition as verified by independent auditors. With failed projects such as the Garden Bridge which was never built and the phasing out of a Government Grant to TfL, Boris Johnson left TfL with a £1.5bn deficit when he left the Mayoral office in 2016. In addition, a legacy of his deal with the David Cameron Government means that from 2021, the £500m raised every year from Londoners paying Vehicle Excise Duty (more commonly known as the Road Tax) will be collected by central Government and not given back to London – thereby only invested in roads outside the Capital.

Under Sadiq Khan’s mayoralty, TfL’s operating deficit before the Covid 19 period hit was reduced by 71%.

The Coronavirus lockdown and the continued message to stay at home and work from home as much as possible has led to a drastic reduction in people using London’s public transport system. At the peak of the pandemic, TfL's passenger income was reduced by more than 90 per cent compared to last year. TfL kept running trains and buses throughout the pandemic period to ensure that essential workers such as NHS staff could get to work. This has had a devastating financial impact on the essential public service.

Transport for London is not alone. Transport networks in other cities such as Manchester, Tyne and Wear, Nottingham, the West Midlands and Sheffield for example have also been impacted. However these transport networks have all been given debt free bailouts.

London has been treated differently. In order to receive a bail out, the Government has set conditions on receiving bailout funding. Within the first round of bail out negotiations, those conditions included;

  • Stopping free travel for under-18s
  • Stopping freedom pass holders from traveling at peak hours
  • Increasing the congestion charge
  • This was part of a short-term deal to keep TfL going to October.

As part of fresh negotiations, the Government is proposing further conditions as part of a bailout deal. These include;

  • Extending the Congestion Charge Zone to the North and South Circular Roads and increasing its charge further
  • Increasing Council Tax for all Londoners
  • Increase public transport fares

This approach from Government is very political and quite clear they are more interested in political elections rather than dealing with urgent and emergency issues. However in trying to hurt or attack the Mayor of London, they are in fact hurting people and businesses in London.