TfL’s revenues over the past financial year nearly doubled as the economy recovered from the pandemic, but still fell far short of where it needs to be as passenger numbers are still below pre-pandemic levels.

The cost of keeping TfL services running (pdf) during the 2021/22 financial year came to £7,771 million, but thanks to the pandemic, revenues came in at just £4,313 million, while that’s nearly double the previous year, it’s still sharply down on pre-pandemic levels.

TfL’s income comes from four main sources – passenger fares, commercial income and road charges, both of which are generated by TfL, then there’s also grant income from the DfT and business rates transferred from the GLA, and finally, borrowing. Fares income, which represents around 73 per cent of TfL’s income nearly doubled from £1,600 million in 2020/21 to £3,154 million in 2021/22. Road charging rose to £684 million, rental income was up slightly at £184 million, and “other” rose to £445 million.

(c) TfL

Despite the rate of inflation and other pressures, costs of running the networks was barely changed, rising by just 0.9 per cent. The tube cost £2,285 million to run, the Elizabeth line cost £430 million, buses and streets cost £2,930 million, and the Overground cost £490 million to run.

As for borrowings, TfL had just under £13 billion in debt at the end of March 2022, and TfL is allowed to borrow up to £14.5 billion if needed, however, borrowing can only be used for capital investments so won’t fill the gap between TfL’s costs and its income as we recover from the pandemic.

One of the problems highlighted by the financial report is that while, historically, TfL was able to borrow to fund its capital plans, with rising revenues eventually paying down the debt, the fact that its debt burden has now reached the limits of affordability means it can no longer continue to borrow significantly in the future without substantial additional income streams. That was likely to lead, even before the pandemic, to a shortfall of around £1 billion a year to fund capital projects in London.

At the moment though, although TfL’s budget shows a breakeven in running costs from April 2023, the uncertainty about government funding means that TfL has to currently assume no capital investment grant from the government from April 2023. This could lead to a situation referred to TfL as managed decline, where assets such as trains and buses start to be taken out of use because they’re not being replaced when it’s ideal to do so, or the cost of maintenance rises to look after them, which in turns puts more pressure on the finances.

TfL says that it has received an outline capital proposal for the future from the government, and is currently studying it, but until an agreement is signed, couldn’t include that offer in its financial accounts. The value of a long-term deal is highlighted by TfL as not just good for London transport, but also it saves money as long-term stable planning can reduce the overall cost by between 10 and 30 per cent compared to short-term projects.

Before the pandemic, TfL’s efficiency programme had put it on a path to breakeven on the cost of operations, maintenance, financing costs and core renewals in 2022/23, which is pretty rare for a major public transport network to be able to achieve, so actually quite impressive.

One of the commitments that TfL made in accepting government support was to set a plan to become financially sustainable by April 2023. This means that TfL would only require financial support for major capital enhancements and renewals, which is in common with other transport authorities.

The current financial support deal expires in a few weeks time, on 24th June 2022. Then London will learn whether the public transport network will thrive, or be destined for a future of managed decline.

(c) TfL – this is from before the Elizabeth line opened


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  1. NG says:

    This is not an economic decision – it’s a political one.
    And, at the moment, the current lurking inhabitant of No 10 will do anything in his power to degrade London & it’s government.
    In the short term it is not looking good.

  2. LMonroe says:

    Managed decline is a political choice by Khan and Byford.

    They could choose not to uprate salaries by 8%, to move TfL pensions to a defined contribution scheme, to cut the useless station staff who don’t help customers anyway and spend most of the time just gossiping with each other. They could use the extra funds on maintenance or capital investment.

    They have made their bed. Grant Shapps should force them to lie in it.

    • ianVisits says:

      Well, assuming you persuade everyone on the tube to take a pay cut, that saves maybe £30 million a year. Changing future pensions won’t affect TfL’s funding today.

      So, where does the other £470 million come from?

    • Nile says:

      Thank you Grant, your supporters are always ready with an apposite and informative comment that illuminates the political challenges facing public sector services, and the depth of privately-funded opposition to the public pursuit of service for the common good.

    • LMonroe says:

      Cutting a few thousand jobs will bring big ongoing savings.

      Every time I see staff in the foyers of tube stations, they are doing almost nothing but talking to each other – often not even by the turnstiles but inside their booths.

      Having more than one staff member at any tube foyer is the height of folly.

  3. MilesT says:

    Parliamentary Petition to stop the 4% Bus mileage cut in London (Bus Review, mandated by Central Government)

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