TfL's finances: Ruined by COVID-19 or by mismanagement of the Mayor?

[Railwaysceptic]

Moderator note: Split from https://www.railforums.co.uk/threads/crossrail-opening-delayed-opening-date-not-yet-known.169160

It looks like there has been a major shakeup at Crossrail.

TfL to take over Crossrail ‘this month’ | Construction News

Transport for London (TfL) commissioner Andy Byford hopes to take over direct running of Crossrail by the end of the month. The recently appointed boss of

www.constructionnews.co.uk

Who thinks this is a good thing? Personally I have no idea.

It's far too early to make snap judgements although that won't stop some people. One of the main issues is whether or not TfL have some special expertise in managing huge projects that others do not have.

Covid 19 and its attendant financial chaos has saved Sadiq Kahn from the consequences of his own recklessness and it is also making the delay in revenue from Crossrail seem pretty insignificant. I'll wait and see what improvements result from this change in supervision.

 

[EdinburghTrain]

Covid 19 and its attendant financial chaos has saved Sadiq Kahn from the consequences of his own recklessness and it is also making the delay in revenue from Crossrail seem pretty insignificant.

Aren't 99% of TfL's problems due to the lack of the central government grant? The freezing of fares has had a very small impact on their finances.

 

[hwl]

Aren't 99% of TfL's problems due to the lack of the central government grant? The freezing of fares has had a very small impact on their finances.

Only about 40% of the potential envelope - but the biggest source, plenty of other smaller ones (fares freeze, free 60+ Oyster, crossrail delay, uber, average bus speeds reducing (and thus losing bus passengers) and plenty more)

 

[BrianW]

It's far too early to make snap judgements although that won't stop some people. One of the main issues is whether or not TfL have some special expertise in managing huge projects that others do not have. Covid 19 and its attendant financial chaos has saved Sadiq Kahn from the consequences of his own recklessness and it is also making the delay in revenue from Crossrail seem pretty insignificant. I'll wait and see what improvements result from this change in supervision.

I assumed Dido Harding was being put in charge of Crassrail- Track, trains and oh so late

 

[Bald Rick]

Aren't 99% of TfL's problems due to the lack of the central government grant? The freezing of fares has had a very small impact on their finances.

The lack of Government grant was a deal done with the GLA / Mayor which involved the Mayor keepimg hold of other sources of local income instead of sending it to government.

The fares freeze has been very, very damaging to TfL finances, even before COVID. It’s worth several hundred million a year, and that is in perpetuity unless the freeze is reversed (ie above inflation rises to catch up).

 

[hwl]

The lack of Government grant was a deal done with the GLA / Mayor which involved the Mayor keeping hold of other sources of local income instead of sending it to government.

The fares freeze has been very, very damaging to TfL finances, even before COVID. It’s worth several hundred million a year, and that is in perpetuity unless the freeze is reversed (ie above inflation rises to catch up).

His advisers before getting elected were very poorly informed.

Those other income sources may prove to be far less valuable over time post covid.

 

[Starmill]

The lack of Government grant was a deal done with the GLA / Mayor which involved the Mayor keepimg hold of other sources of local income instead of sending it to government.

Quite, but I would strongly caution against concluding just on the basis of that that the settlement reached was fair and sustainable in the long term. In the United States, City government which is expected to fund local transport services can do a great deal more to raise money than TfL could.

The fares freeze has been very, very damaging to TfL finances, even before COVID. It’s worth several hundred million a year, and that is in perpetuity unless the freeze is reversed (ie above inflation rises to catch up)

While again this is true it is worth nothing that super-inflationary price increases had already been offered, so this gap would have already been on course to start shrinking from next year were it not for the crash.

 

[Class 170101]

The lack of Government grant was a deal done with the GLA / Mayor which involved the Mayor keepimg hold of other sources of local income instead of sending it to government.

The fares freeze has been very, very damaging to TfL finances, even before COVID. It’s worth several hundred million a year, and that is in perpetuity unless the freeze is reversed (ie above inflation rises to catch up).

One has to be careful politically. I've not seen the fianances or the balance sheet of TfL but what I would say is this to reverse the freeze with above inflation fare rises to catch up would not be popular and would have a National bearing on Tory MPs but more likely on Councils at the delayed elections especially if RPI is used aginst CPI (the former being discredited). I think it will not be blamed on Khan because of the way Westminster figures have behaved in this crisis.

In terms of wider policy has the fares freeze actually increased usage / demand for public transport and reduced car usage, if so this should be seen as a good thing especially in terms of the environment especially towards zero carbon goals in 2050?

 

[Railwaysceptic]

Aren't 99% of TfL's problems due to the lack of the central government grant? The freezing of fares has had a very small impact on their finances.

No, although Sadiq Kahn's supporters will have you believe that. The grant was withdrawn by George Osborne during his "austerity" period and the Mayor was Boris Johnson. Johnson was an appalling Mayor but the one thing he got right was the need to keep TfL financially sound. During his period in office TfL was flush with funds and spent like a sailor on shore leave but they were always solvent. Sadiq Kahn threw all that away with his negligent fares freeze. Covid 19 has saved his bacon politically because the financial damage he has done now seems unimportant.

 

[Energy]

Sadiq Kahn threw all that away with his negligent fares freeze. Covid 19 has saved his bacon politically because the financial damage he has done now seems unimportant.

The £1.50 bus hopper thing always seems to be losing a lot of money to me, TfL buses already lose money... anyway the bus hopper is offtopic.

 

[crablab]

Sadiq Kahn threw all that away with his negligent fares freeze.

I remember reading that it cost TfL £800-900m over several years. Which doesn't seem a huge amount of money in the context of TfLs budget

 

[The Ham]

I remember reading that it cost TfL £800-900m over several years. Which doesn't seem a huge amount of money in the context of TfLs budget

Depends on if that means that the budget is balanced or not because of that extra cost.

For instance £100 a year may not be much on what people spend, but if there's only £25 a year which can be used then that extra could get then into financial difficulty over time.

 

[Mikey C]

One has to be careful politically. I've not seen the fianances or the balance sheet of TfL but what I would say is this to reverse the freeze with above inflation fare rises to catch up would not be popular and would have a National bearing on Tory MPs but more likely on Councils at the delayed elections especially if RPI is used aginst CPI (the former being discredited). I think it will not be blamed on Khan because of the way Westminster figures have behaved in this crisis.

In terms of wider policy has the fares freeze actually increased usage / demand for public transport and reduced car usage, if so this should be seen as a good thing especially in terms of the environment especially towards zero carbon goals in 2050?

Bus usage has been going down

Slower journeys, not helped by road space being given to cycle lanes and the massive congestion caused by various schemes to remove gyratories.
Ubers taking passengers AND causing congestion
Bus routes being cut back so fewer run directly into and across central London
And of course usage has dived thanks to Covid, and social distancing

 

[SynthD]

I remember reading that it cost TfL £800-900m over several years. Which doesn't seem a huge amount of money in the context of TfLs budget

Correct, 640m over four years (not sure about the fifth year). It has been overstated repeatedly. One point of confusion is that the former central government grant was 700m a year, and people forgot to compare like with like.

 

[hwl]

Correct, 640m over four years (not sure about the fifth year). It has been overstated repeatedly. One point of confusion is that the former central government grant was 700m a year, and people forgot to compare like with like.

But as Bald Rick point out that with the end of grant the TfL/GLA were allowed to retain a proportion of business rates and other items, hence the net impact of ending the grant was a lot lower than that the 700-800m value of the grant.

 

[Meerkat]

Correct, 640m over four years (not sure about the fifth year). It has been overstated repeatedly. One point of confusion is that the former central government grant was 700m a year, and people forgot to compare like with like.

The effect is permanent though, hitting every future years finances, unless you put in catch up fare rises.

 

[crablab]

TfL was on track to be profitable, until the pandemic hit.

 

[Busaholic]

The removal of road space was very much a product of the Johnson mayoralty period, though not stopped or much amended by Khan. The ridiculous Borismaster bus wasted a lot of money, and the need to provide 'customer assistants' for them in the initial years. The over 60 Freedom Pass was another Johnson innovation. Oh, let's not forget the removal of Kensington and Chelsea from the Congestion Charge area too, a deeply cynical piece of politicking that says it all about Johnson. P.S. garden bridge, anyone?

 

[MotCO]

TfL was on track to be profitable, until the pandemic hit.

Was it? Passenger numbers in London were decreasing, and there were increasing delays due to roadworks narrowing roads for one or two bicycles a day. These and the Hopper fare and fares freeze must have hit income, so how was TfL on track to be profitable?