TfL’s fourth and latest temporary bailout last weekend has put off a funding crisis only until Friday as authorities try to agree a long-term funding deal.
The current TfL funding deal was expected to expire on the 11th of December 2021 but keeps getting extended as the Department for Transport and TFL wrangle over the details of long-term funding.
Without a long-term funding deal, TfL has begun to par back investment projects such as ‘Healthy Streets’ schemes in an attempt to keep current services operating. Earlier this month tube and bus fares were increased by 4.8% on average. Though slightly less than inflation, the increases will hit bus riders and outer London hardest.
Between these rises and an increase in the premium Heathrow Tube fares, TfL is expected to net an extra £60-80 million. None the less a long-term funding deal is still essential to keeping services open and new investments such as new rolling stock for the Central and Bakerloo lines.
Earlier this month the London Assembly wrote to the Secretary of State for Transport, Grant Shapps, warning that bus routes are going without retendering. This will leave older, more highly polluting vehicles on London’s streets.
TfL contracts are worth £7 billion so it won’t be long until the wider economy in London and beyond will start to feel the effects of the delay in funding.
Final thought
The solution to TfL’s funding crisis depends on two factors.
The first is a question of the nature of the crisis. Everyone agrees that this crisis has been brought about by the pandemic, with a drastic reduction in travel causing a funding shortfall. The question is when and to what extent travel will resume. In November 2021, bus journeys were 71% of 2019 capacity and tube journeys were at 66%.
Those arguing for a generous settlement from the Government maintain that with pandemic restrictions ending, those numbers will soon recover and so funding for investment in TfL projects will be essential. Those arguing for smaller settlement cite the possibility that the pandemic may have wrought permanent changes to how people commute and therefore TfL will have to prioritise a smaller budget.
The second factor is politics. With the Government’s focus on ‘Levelling Up’ northern marginal constituencies and Labour’s increasing grip on London in recent years there is not necessarily a large political price for a Conservative Government to pay for reducing funding in London. The Mayor also looks to be making decisions with an eye to future elections; favouring tube riding central Londoners who are by and large, wealthier and more likely to vote to bus riding outer Londoners who are poorer and less likely to vote.
With so much uncertainty it’s clear why agreeing long-term funding has been such a tall order for so long.
