12.12.18
TfL shelves plans for Tube upgrades as financial woes revealed
Plans to upgrade major parts of London Underground will be put on hold and Crossrail 2 is now in doubt after TfL has disclosed the extent of its financial difficulties.
TfL has published its five-year business plan, revealing that the delayed opening of Crossrail will cost TFL £600m in lost fares.
The financial impact of the delay to the £15.4bn project has been exacerbated by a decline in passenger numbers and government cuts, leading to London’s transport bosses struggling to balance the books.
TfL has said its revenue for the next five years would be £2.1bn lower than forecast in 2016, compounded by the end of a £700m annual government grant.
Due to the financial troubles, the modernisation of signalling on the Piccadilly Line and the rebuilding of Camden Town station will be halted.
TfL has just agreed a £1.4bn bailout with the government for Crossrail, accompanied with a second push-back to its launch date, originally due 9 December, with the Elizabeth Line now not expected until at least 2020.
The rescue deal will see the Greater London Authority borrow up to £1.3m from the DfT and, following a review into the spiralling costs and delays, it’s been revealed that the project is now £2bn over its original budget.
The levy money that will be used to pay for the loan had, until this week, been earmarked from to provide funding for Crossrail 2.
The business plan expects fares to rise in London by more than inflation, and more jobs would also be lost at TfL as it seeks to cut back-office costs by 30% through merging functions and departments.
The transport body says it expects to break even by 2022-23, a year later than planned, due to the delays and lower demand for transport services.
Mike Brown, London’s transport commissioner, said: “This first year without a direct government grant for the day-to-day operating costs of running transport services has coincided with tough external economic conditions that has meant lower overall passenger numbers than previously forecast.
“That financial pressure has been compounded by the extremely disappointing news about the delay to the opening of the Elizabeth Line.”
He added: “A new Crossrail Ltd management team under Mark Wild's leadership is now working to establish a robust, deliverable schedule before committing to an opening date. “
TfL states that major progress has been made as efficiency targets are ahead of target and the current operating deficit is set to be cut by more than £200m.
It blames a subdued economy for reduced journeys across the country, with Londoners now taking fewer trips per day compared to previous years, but declares that Sadiq Khan’s freeze of TfL fares will help “cushion London from the severity of impacts.”
The mayor of London said: “We are pushing ahead with our ambitious plans to make London a cleaner, safer, healthier city with more affordable and accessible public transport. This is despite an average reduction of £700m per year in TfL's funding from government, and the financial challenges of uncertainty in the economy and the delay to the Crossrail project.”