Transport for London’s problems go back far further than the virus to Thatcherite spending cuts and austerity, argues Kevin Crane
It is out-of-character for Mayor of London Khan to make bold statements about much, but on Thursday he did. On LBC radio, he announced that as far as TfL is concerned "...today is the last day. Unless the Government gives us confirmation of the grant we need, then the consequences could be quite severe and the ramifications for all of us will be huge."
Obviously, he's responding to events tied as they all are to the Covid-19 emergency, but the truth is that the financial woes of TfL go back somewhat further than this year.
The grant Khan is requesting is not some new thing, but rather the restoration of a central government grant that George Osborne scrapped in the time of the coalition as part of austerity.
Most capital cities in the Global North require some form of grant for transport infrastructure, but Osborne viewed London's as "low-hanging fruit" that he could cut with little or no political impact. TfL had to make significant savings to shoulder this loss, as it was now completely dependent on operating profits to fund itself.
There is some history here. Forty years ago, the Tories used an outrageous court ruling against the then-leader of the Greater London Council, Ken Livingston, that his "Fares Fair" policy of using local government taxes to subsidise tube and bus tickets was an illegal redistributive tax.
The legacy of this has been to constrain transport funding ever since and is the fundamental reason why tube tickets are so outrageously expensive.
Even when Ken made his big comeback as Mayor of London two decades later, all he could really do regarding fares was subsidise buses. This is nothing to be sniffed at – London as a result has probably the only decent bus service in England – but it does need to be understood that transport funding in London has been very dependent on ticket sales and tube ticket sales in particular. Buses do not, as a rule, make operating profits, which is why without good municipal authorities like TfL, so many English towns have simply seen services left to rot.
Osborne cutting the TfL grant, therefore, has meant that London Underground has really been keeping the rest of the urban transport system going financially. In an effort to make this less precarious, both LU and TfL have spent several years significantly cutting jobs in what staff had come to wearily know as the "Transformation" process.
This, again, has been less obvious to the public, since jobs have been lost from administrative, supporting, technical and managerial areas, but although difficult to quantify, the loss of such workers is very real and lasting. Not only do reduced teams have to pick up responsibilities, but more experienced workers will often opt for attractive redundancy payouts and leave in disproportionate numbers, which can be a risky and ultimately expensive skills drain. It has certainly been very painful and exhausting for LU and TfL staff.
Prior to this year, two other major challenges put further strain on TfL. The first was the unexpected drop in tube usage. A lot of plans for the future of transport had been based on a vision of London continuing to grow, and therefore commuters paying for tickets to continue to rise. This hasn't happened, probably not for any one reason, but related to a number of factors, such as London's still spiralling living costs and the uncertainty around Brexit for the past four years.
In a bid to transfer the logic of austerity onto some low-visibility cuts they could make, TfL have resorted to make furtive cuts to bus routes, either shortening them or reducing regularity where they think it will create the least controversy. If you've been wondering why your bus services just don't seem as good as they were until recently, this is why.
Planned improvements to the tube have also been significantly cut or forever delayed, with disabled access being one of the first things to suffer.
The second big hit has been Crossrail, which is shaping up to be the most unsuccessful engineering project of the twenty-first century so far. Crossrail, the future "Elizabeth Line", was meant to open in 2018. It currently has no foreseeable opening date, and that was the case long before anyone knew about the virus pandemic. Catalogues of delays, mostly but not exclusively on stations and infrastructure, have seen its budget swell almost four billion pounds over its original £14.8 billion budget.
If that doesn't seem to be too bad in proportion, the funding for the project has factored in revenues that were expected to come from tickets and advertising on the system of roughly a billion per year after the second year. In other words, the longer the project takes and continues to outgrow its budget, it is also eating into the projected income that was intended to cover the budget.
Crossrail has been a swirling vortex of financial doom, one that TfL has wholly owned since 2008 and that is dangerously beyond their capacity to fund. Recently, TfL's debts relating to Crossrail were completely taken over by the London government centrally, a desperate manoeuvre deemed necessary to save the transport body's credit rating.
So, prospects for London transport have been looking poor for a while. The vision of an ever-expanding London, constantly growing so it can forever defer issues with funding, infrastructure and inequality, was dead and did not need a lethal virus to kill it.
The constant turnover of tube revenue came to a necessary stop and entire infrastructures dependent upon it now face a bleak question about how they are going to continue. What the powers that be are going to choose to do about this in the short term, I don't honestly know, though I suspect a short-term grant is likely if the alternative is London's buses staying in their garages.
For the left, the issue has to be that the problems here do not start with TfL, but the Thatcherite model of funding that it has tried and failed to labour under. A model "Fit for the Future" (to steal one of the many buzzphrases under which LU cuts have been delivered) needs to be found.
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