09.12.15
Commissioner Mike Brown to reveal TfL’s financial coping strategy
The London Assembly Transport Committee will meet Transport for London’s (TfL’s) commissioner, Mike Brown, tomorrow to question him on the future of the capital’s transport links after repeated government cuts.
In a meeting that only happens once a year, the committee’s members will grill Brown on how TfL expects to cope with the government’s decision to phase out the body’s revenue grant entirely by 2018-19.
Chancellor George Osborne announced this in November’s Spending Review as part of the Department for Transport’s (DfT’s) financial settlement until the end of this Parliament.
In total, TfL’s funding has dropped by £2.8bn over the course of its business plan, from this financial year to 2020-21.
As well as cutting off TfL completely, the Treasury also expects the DfT to cut resources by 37% until the end of the decade and reduce the subsidy paid to rail franchises by “repeating the benefits of competition”.
This has already started to materialise from today after the government announced that the new TransPennine franchise, awarded to FirstGroup, will pay a £303m premium over the core period – with 2017-18 marking the franchise’s transition from subsidy from government to premium to government. The new Northern franchise, awarded to Arriva Rail, will also reduce its existing subsidy by £140m by the end of the nine-year contract.
The commissioner will also have to answer how financial cutbacks will impact on services and TfL investments, as well as to what extent the organisation can generate further income – above what is already planned – from selling some of its 5,700 acres of land.
On a different note, the committee is also intent on asking when the government will approve Crossrail 2.
Last month, TfL’s Finance and Policy Committee was asked to recommend that the board brings forward £4.74m from the 2016-17 budget to allow the programme to “be maintained” and ensure momentum isn’t lost. Shortly after, in the chancellor’s Spending Review, the government announced a £300m ‘transport development fund’ that could be used to support Crossrail 2, as well as other proposals emerging in the north, following advice from its National Infrastructure Commission.
The meeting will take place in London’s City Hall at 10am and is available for streaming.
(Top image c. TfL)