Projects could grind to a halt midway through construction as Transport for London (TfL) grapples with challenging finances, an independent watchdog has claimed.
In newly released board papers the Independent Investment Programme Advisory Group (IIPAG) revealed that TfL is being squeezed by twin responsibilities to cut down costs and deliver significant investments in London’s infrastructure at the same time.
It said there were several instances when TfL had shown “a reluctance to face up to cost increases” on projects, and that it risks committing to schemes it does not have the money to deliver.
TfL is facing a black hole in its budget of almost £1bn next year as it transitions away from relying on government funding. It expects to be back in the black by 2021/22 after undergoing an overhaul of its finances.
The IIPAG wrote: “IIPAG has noted a number of instances where there appears to be a reluctance to face up to cost increases when projects are underway, or where funds are simply not available to deliver the preferred option and a decision to halt work is delayed and additional costs incurred.”
It added: “TfL therefore runs the risk that it commits to projects that it cannot deliver within its available funds, and that it will have to pause or stop projects when they are underway. This is clearly not the most efficient way to balance TfL’s portfolio of projects.”
The IIPAG said the transport body’s finances are under greater stress than any time since it first formed in 2010. The group said it would continue to draw attention to projects where it felt TfL’s estimated final costs were “unduly optimistic”.
TfL said it had already started implementing the IIPAG’s recommendations to avoid project delays or pauses.
A spokesperson for TfL added: “We welcome IIPAG’s observations on our investment programme, which is seeing billions invested in improving London’s public transport and encouraging more walking and cycling to support the country’s economy.
“We have already put measures in place in response to their observations and are updating guidance on Risk and Contingency management across our investment programme as part of this year’s Business Plan update.
“This will help ensure improved transparency regarding risks and opportunities remain an integral part of how we prioritise investment across the network.”