13.02.18
Union calls for government intervention after near-£1bn TfL deficit revealed
The RMT has urged the government to reverse plans to cut grant funding for TfL after it was discovered that the company could suffer from a budget deficit of nearly £1bn in 2018-19.
The news comes after the Financial Times revealed details indicating that the capital’s transport body could continue to rack up its deficit, which is already expected to hit £785m this year.
In internal emails sent by the company’s surface transport division finance director, Patrick Doig, it was discovered that the gap could rise as high as £968m – a situation which Doig said was “clearly not a sustainable position.”
While there are some suggestions that a fall in customer numbers and an increase in costs has caused the rising deficit, the union has pointed to the future removal of the government’s revenue grant as a major pitfall.
Mick Cash, general secretary of the RMT, said he was attempting to set up a meeting with the government’s minister for London, Jo Johnson, in order to discuss the issue.
“RMT is not only campaigning for proper funding of London transport we are also making it clear that we will be resisting any transport austerity in London, and the associated threat to jobs, services and safety, with every tool at our disposal including the use of industrial action if necessary,” he explained.
TfL: Deficit expected to drop by 2022-23
However, while Cash called the issue a “crisis”, TfL officials say the £968m figure is the summit of the company’s deficit which is then expected to drop dramatically between now and 2022-23 as its business plan comes into effect.
The plan aims to bring the transport body to meet an operational surplus despite the loss of central government grant funding, and a spokesperson for TfL pointed to the £153m drop in year-on-year costs achieved last year, for the first time in the organisation’s history, as an example of positive movement.
In a statement, the organisation said: “Through our recently published budgeted and balanced business plan, we are continuing to invest record amounts in the transport network to deliver a wide range of improvements and make London a fairer, greener, healthier and more prosperous city for everyone.
“Our extensive efficiency programme has already helped reduce operating costs this year by £194m and is ahead of budget and more than offsets any reduction in revenue. The introduction of the Elizabeth Line later this year will further improve ridership across the capital and transform journeys for millions of people.”
The plan would see TfL operate with a deficit until 2021-22 when it would achieve a surplus of £78m rising to £153m the next year.
By the end of the plan’s implementation period, it is hoped that London will be one of the only major cities in the world which operates a public transport and road system completely free of government funding.
While some have pointed to London mayor Sadiq Khan’s price freeze as one way in which TfL could be losing money, officials from the organisation have said that the policy, along with the expansion of the new Hopper fare has helped maintain passenger numbers despite falling figures for services run by Network Rail in London.
Top image: TfL
Have you got a story to tell? Would you like to become an RTM columnist? If so, click here.