Now there are two reviews into TfL’s finances

Typical, you wait for ages and then two reviews into Transport for London’s finances come along at once.

Earlier this week, the government announced the terms of its review into how TfL is run, and today, the Mayor of London has announced his own review.

As part of the funding agreement reached with Government, TfL agreed to a broad-ranging review of TfL’s future financial position and future financial structure being undertaken.

The government published its terms of reference for its own review, and immediately generated anger in the unions, who spotted one line that said the review would look at options for driverless trains, and another that said that the structure of TfL could change.

Realistically, when looking at operating costs, the most likely change would be to the bus services, which require a substantial subsidy, but they also show the least opportunity for any further cost-cutting. The tube and rail services tend to break even, or even make a profit in operating costs, although that does not include capital investment costs.

There have been suggestions that TfL could be broken up, privatised, or taken away from the Mayor of London’s control. The government review will also look at how to increase non-fare income, such as property developments and more commercial services.

There is likely to be a lot of pressure on the government to increase central government support for TfL, being the only major city in the world not to receive financial support from the national government. That was in part so that TfL would receive business rates instead, but the deal has reduced TfL’s income by an estimated £700 million per year.

The fares freeze, due to end next year, did not help but had a modest impact compared to the collapse of income this year due to the lockdown.

Today the Mayor of London, Sadiq Khan also announced his own independent panel of experts has also begun a review of TfL’s long term future funding and financing options. No limits have been set on the breadth of TfL’s own review, and the panel will be independent of both TfL and the Greater London Authority (GLA).

The Mayor’s review will be carried out in parallel with the government’s review of TfL’s finances and is also expected to conclude in September.

(c) TfL