£1.5BN blackhole forces Sadiq Khan to slam BRAKES on green revolution

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Sadiq Khan was today accused of ‘failing to take any responsibility for his own shortcomings’ as he threatened to shut the London Underground for days and close bridges as transport bosses warned of a £1.5billion finance gap.

Schemes promoting walking and cycling, which the Mayor has continually pushed, are also now facing cuts. Motorists also face paying an extra £300million a year – with Transport for London saying that bringing in a road tax, increasing council tax and extending the congestion charge will still be insufficient to balance the budget.

The Mayor of London has launched a drive since the pandemic began to get people walking and cycling again through ‘Healthy Streets’ projects which have included installing cycle lanes and improving walking routes. In addition, the ‘Streetspace’ plan aimed at helping people maintain safe social distance had a budget of £80million.

But amid a funding crisis, TfL has now said all ‘uncommitted’ Healthy Streets projects must be paused or cancelled as it revealed proposals to reduce the programme’s budget by £473million for the six years from 2019/20.

The transport body is also considering suspending the second phase of its Direct Vision initiative to protect vulnerable road users from lorries, as well as a planned fast ferry service between Rotherhithe and Canary Wharf. 

TfL also faces a ‘£435million reduction in major projects’ meaning the Piccadilly line signalling upgrade and Jubilee line ‘optimisation’ are under threat, while there will also be cuts in the step-free access programme.

And TfL said the Tube could go into ‘managed decline’, referring to: ‘A declining network with ageing assets that will fail more regularly. The risk of major asset reliability issues on the Tube that could cause multi-day closures.’

Its report said there are 45 TfL road network structures, bridges and tunnels with ‘interim safety measures’, and cited six examples that ‘represent a high risk to operability’ – including the Rotherhithe Tunnel fire and ventilation system renewal in South East London and the Croydon Flyover structural lighting renewal in South London.

Others examples were the A40 Westway in West London where 12 key bridge joint renewals are required, as well as steel fatigue issues on Vauxhall Bridge in Central London and Gallows Corner Flyover in Romford, East London, as well as structural condition improvements needed at Brent Cross in North London.

Reacting to the latest funding gap, Conservative MP for Wimbledon Stephen Hammond told MailOnline today: ‘Yet again this is the Mayor showing he is failing to take any responsibility for his own shortcomings. Clearly there are problems due to Covid, but the government have provided him with a new funding package.’

The former transport minister added: ‘Yet again he is failing to meet some of his commitments so that this black hole can be sorted out. This mayor needs to stand up and take responsibility and stop blaming everyone else.’

And Gareth Bacon, Conservative MP for Orpington, told the Daily Telegraph: ‘The Government will cover the cost of coronavirus, but Sadiq Khan needs to come up with a plan to pay for London’s public transport in the long term. Undoubtedly, his decision to freeze fares, which lost TfL at least £640million, has made this task far harder.

‘Getting to grips with the cost of TfL’s gold-plated pensions, staff perks and bonuses will save millions of pounds. But the Mayor needs to look at ways to revive London’s economy and boost ridership. That’s the key to restoring the network’s finances.’

TfL revealed it expects annual revenue from introducing a proposed emissions-based pricing charge for driving in London to reach £300million by 2024/25.

Mayor of London Sadiq Khan is proposing to launch a ‘clean air charge’ and/or expand the ultra-low emission zone.

The figures are part of a budget update which will be considered by TfL’s board today. 

The document stated that the organisation is facing a £1.5billion gap in its finances by 2024/25 unless it receives additional funding.

It has repeatedly called on the Government to provide a long-term financial package due to the reduction in fare revenue caused by the coronavirus pandemic. The latest bailout expires on Friday.

A spokesman for Mr Khan, who chairs TfL, said: ‘This is a small window into the stark reality of the financial crisis facing TfL, just days away from the current Government funding deal expiring.

‘Without a new, sustainable long-term funding deal there is a real risk of major projects being paused, cuts to services, trains falling into disrepair and closures on major road networks – all of which would disrupt services for hundreds of thousands of people and stifle the economic recovery of London and the country.’

The Department for Transport (DfT) has previously insisted it has ‘repeatedly shown its commitment’ to supporting TfL during the pandemic by providing ‘more than £4billion in emergency funding’.

Nick Bowes, chief executive at think tank Centre for London, said: ‘Reducing people’s reliance on private cars is crucial if London is to achieve the city’s ambitious net-zero targets, improve air quality, cut congestion and make our streets safer.

‘If we’re to have a shot at reaching these targets, getting more people walking and cycling for shorter journeys is crucial. But this will be all the harder if Transport for London’s Healthy Streets budget is cut.

‘This budget update adds yet more urgency to the Government and City Hall agreeing a sustainable, long-term funding deal for Transport for London.

‘Without a funding settlement, we will struggle to build safe, well-designed routes that support people to walk and cycle more.’

The pandemic left London’s transport system deserted for months on end, decimating revenues and sparking an ongoing feud between Mr Khan and the UK government over funding current shortfalls.

TfL – which runs the Underground network, buses, trams and river boat services – has received billions of pounds from central government in the last two years to stay afloat.

That followed passenger numbers across the network slumping as people were repeatedly told to stay home to stop the spread of Covid-19.

Now, as numbers pick up again with the easing of all restrictions, the Conservative government has urged London’s Labour mayor to find a sustainable funding model for state-owned TfL.

The issue has come into sharper focus as central government subsidies maintaining the current level of service are set to expire without renewal this Friday.

Mr Khan has raised the prospect of service cuts or even the closure of a Tube line without new funding support, arguing TfL is ‘fundamental to the success of the capital’.

‘It is so important that the government urgently comes forward with the long-term funding TfL desperately needs so we can keep services running and deliver much-needed improvements to our transport infrastructure,’ he warned earlier this month.

The Labour party mayor, re-elected last year for a second term, is reluctantly proposing to raise the compulsory housing tax in the next budget, which he has said would ‘unfairly punish Londoners for the way the pandemic has hit our transport network’.

He wants the government to inject around £1.7billion to fund TfL until April 2023. 

However, the Department for Transport has said Mr Khan is responsible for getting the system ‘back onto a sustainable financial footing in a way that is fair to taxpayers, rather than continuing to push for bailouts’.

‘We will continue to discuss further funding requirements with TfL and the Mayor,’ a spokesman said this week. 

The standoff reflects the inevitable rivalry between Mr Khan, touted as a potential future Labour leader, and the government of Prime Minister Boris Johnson, himself a former London mayor. 

Both have accused each other of mismanaging the capital’s extensive transport system. TfL notes the pandemic has ‘devastated’ its accounts, with fares revenue falling by 95 per cent at the height of the first coronavirus wave in 2020.

It has been forced to dip into its cash reserves to keep services running while going cap in hand to the government for support.

Mr Johnson’s administration has already pledged £4billion in subsidies to keep the system running, as well as £600 million in loans.

The financial crisis has also affected the capital’s new east-west Crossrail route, formally known as the Elizabeth Line, with the stretched budget adding to delays and costs.

Other global cities have faced similar struggles, including Ile-de-France Mobilites (IDFM) in the Paris area, which needed government support in its 2020 and 2021 budgets.

Meanwhile in the United States, ‘strong’ financial support packages passed by Congress and the White House helped replace ticket revenues lost from lockdowns, according to Paul Skoutelas, head of the American Public Transportation Association, an industry organisation. 

But TfL, which gets nearly two-thirds of its operating income from fares – a much higher proportion compared to New York or Paris, where it is more like 40 per cent – has been left especially exposed.

‘Pre-Covid, TfL was largely self-sustained,’ explained Taku Fujiyama, who leads University College London’s railway research group, noting it received no major central government grants.

‘Some cost-cutting measures are on the table now,’ he said, adding dramatic line closures were unlikely but minor service changes ‘might happen’.

‘TfL needs to play a delicate game,’ Mr Fujiyama told AFP. ‘The central government would not give blank cheques, and the TfL would need to demonstrate their effort, whilst the mayor knows that dramatic service reduction would be politically costly.’

With the threat from the Omicron variant now receding, passengers are returning to the system, aiding revenues but still leaving a large gap to plug.

Weekday passenger numbers were at 50 per cent of pre-pandemic levels on the Tube and 70 per cent on buses in mid-January, with TfL expecting them both to reach 80 per cent this year.

The organisation has said it is exploring a number of ways to boost income, including through efficiency gains, commercial property projects and consultancy services.