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Sir Bob Neill MP: TfL must have the tools to help itself

Bob Neill MP
February 24, 2022

With fares for TfL services set to increase against the backdrop of a dire financial situation for London's transport provider, Sir Bob Neill writes that more imaginative ways of funding must be brought in to ensure future income can be secured.

Since its inception in 1933 as the then London Passenger Transport Board, and bedevilling each of its numerous incarnations since, near incessant political wrangling as to who should fund public transport in our capital, and how, has been a virtual constant in Transport for London's (TfL) otherwise illustrious history.

40 years ago, the London Borough of Bromley – part of which I'm proud to now represent in Parliament – initiated a successful legal challenge against Ken Livingstone's (then leading the Greater London Council) Fares Fair policy on the grounds that Bromley's residents were effectively being forced to subsidise the Underground despite having no tube service within, or anywhere near, the Borough.

Some things never change. Funding is no less of a political hot potato now than it was then, Bromley Council remains top of the class in terms of its fiscal prudence, and our Borough (in spite of my best lobbying efforts to extend the Bakerloo line south) is still, regrettably, tube free.

The ongoing, somewhat unedifying public arm-wrestle between the Department for Transport and the Mayor of London over TfL's finances – which after what seems like endless temporary fixes, mixed with a fair deal of finger pointing – was extended again last Friday for one week is not, then, new or unexpected. What is different is the scale of TfL's debt and the impact balancing the books will inevitably have on people who live and work in our great city.

After all, London has the highest rate of relative poverty in the UK and the greatest level of unemployment of any region. GLA figures show that prices are 7 per cent higher in London than the UK average, while data from London Councils has reiterated the extent of the cost of living crisis in our capital, with 34 per cent of Londoners having struggled to pay their household bills in the last six months and 13 per cent failing to make ends meet, going without essentials or relying on credit. The average 4.8 per cent hike to fares announced by TfL last week, and coming into effect from 1st March, will only add further unmanageable pressure on thousands of already hard-pressed families across the city. It is, though, just the tip of the iceberg.

The Mayor's proposed council tax precept increase, which is due to be considered by the London Assembly this week, will raise bills for Band D households by £31.93 a year (£20 of which is being directly earmarked for TfL), while the congestion charge hike from £11.50 to £15 a day, introduced as a temporary measure during the height of the pandemic but now made permanent, extends the woe to those reliant on private transport too. Throw in last year's expansion of the Ultra Low Emission Zone (ULEZ), now 18 times its previous size, and within which TfL estimates that 20 per cent of vehicles are non-compliant, and the list of additional, transport-related outgoings heaped on ordinary working folk soon racks up at an eye-watering pace. That's particularly the case in outer London boroughs like mine where, without the same TfL provision as their inner city neighbours, car ownership remains a necessity, not a choice, for the vast majority.

Of course, London needs to adopt policies that help it transition to a greener future, and that means taking urgent, practical steps to put transport onto a more sustainable footing, both from an environmental and financial standpoint. But is hitting those least able to pay really the way to go about this?

The dramatic fall in passenger numbers brought about by COVID-19 had decimated TfL's bank balance, especially as London, to a far greater degree than any other city, funds its transport network via passenger fares (roughly speaking, they make up 72 per cent of Underground funding in London, compared to 38 per cent in New York and Paris, and 21 per cent in Singapore). But let's be clear, TfL's finances were far from being a picture of health before the pandemic struck.

Indeed, TfL's debt stood at around £13 billion – a record high – before the first lockdown, with interest payments of £400 million a year. Repeated delays to Crossrail, which still hasn't opened four years after it was scheduled to, have been a significant contributor, with mounting costs and lost income from fares, rental units and commercial advertising.

This has been exacerbated, and will be made worse still, by decisions the Mayor has, and is planning, to take. For example, the move to increase bus fares by 6.5 per cent next month when, as London TravelWatch has pointed out, these services are used more frequently by less well-off residents, is both unfair and ill thought through. The same can be said for the Mayor's proposal, not yet fully taken off the table, to implement a boundary charge for non-Londoners driving into the city, something that would again unduly affect people living and working in outer boroughs like Bromley where car trips into Kent, and vice versa, for work, school, or to see family, are a daily occurrence.

Worst of all, even after these wallet-busting, revenue raising exercises, the Mayor has conceded in his draft budget that a period of "managed decline" – or, in other words, service cuts – will still be required. This will include a 9 per cent reduction in tube services, an 18 per cent reduction in bus services, and no new cycle enhancement schemes.

Whatever your views, continuous subsidy from central government is politically unpalatable for an administration whose self-branded raison d'être is to curb the historic and perceived preferential treatment London and the South East has enjoyed. At the same time, the Government must wake up to the fact that self-sufficiency will prove impossible for TfL until whoever is in charge at City Hall (regardless of their politics) is given the levers to raise sufficient cash. Pragmatism is needed from both sides and more imaginative ways for TfL to generate income secured.

Luckily, plenty have already been identified, not least in the two reports published by the London Finance Commission in 2013 and 2017, many of which were fully endorsed by Boris Johnson while Mayor. That includes devolving the full suite of property taxes to London government and smaller revenues like Vehicle Excise Duty (something ministers have perhaps been too swift to rule out), while also allowing London to introduce its own small taxes such as a tourism levy. Doing so would offer a sensible middle ground between Sadiq Khan's current Sheriff of Nottingham stance and the reoccurring cap-in-hand routine TfL is having to perform. Brinkmanship and ad-hoc bailouts are no way to run a service and will only prove counterproductive to good management and forward planning.

Yes, TfL requires reform, but it remains a huge asset that shouldn't be taken for granted. The coverage and reliability of its services are the envy of countless cities, but it needs to have the tools to help itself. The irony seems to be lost on the Government that while it plans "London-style" transport systems for other regions, London itself will be robbed of its network unless a rethink swiftly ensues. The window is narrowing, but we haven't yet missed the train.

Bob neill

Sir Bob Neill is the Conservative MP for Bromley and Chislehurst and Chair of the Justice Select Committee.

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