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TfL's forecast £968M deficit 'clearly not a sustainable position'

Tube

Transport for London’s (TfL) expected £1bn operating deficit has been labelled “not sustainable” ahead of a meeting about the future of the capital’s transport tomorrow.

The Financial Times has reported that an internal email to staff from finance director for the surface transport division Patrick Doig said that the £968M deficit forecast for 2018/19, was “clearly not a sustainable position to be in as an organisation”.

Tomorrow (Tuesday) the London Assembly transport committee will question whether TfL is doing enough to regulate new technology, such as autonomous vehicles, as it launches its report on the future of London’s transport.

Last November, TfL reported its operational deficit for 2017/18 was £784M, although at the same time it set out plans to save £1.2bn through value engineering. The transport body is working towards an operating surplus of £78M by 2021.

TfL is now far more reliant on Tube passenger revenues after the government axed its £700M per year grant, forcing it to find millions of pounds in savings. Passenger revenue is therefore crucial to help fund TfL’s major engineering projects, but Tube passenger numbers have fallen.

Last month deputy mayor for transport Val Shawcross said a late start to Crossrail, now known as the Elizabeth line, was the “biggest revenue risk for TfL”. The Elizabeth line has faced cost and timing pressures recently, although Crossrail has said the line is still expected to open on time and within budget by December 2018.

A TfL spokesperson said: “London is leading the way in showing how you can keep fares affordable, while still investing record amounts in creating world-class infrastructure. Although overall ridership is currently slightly lower than originally budgeted, ridership on the bus, Tube and rail services is regularly outperforming that elsewhere across the country – helped by the fares freeze, the Hopper fare and improved reliability.

“Through our recently published budgeted and balanced Business Plan, we are continuing to invest record amounts in the transport network to deliver a wide range of improvements and make London a fairer, greener, healthier and more prosperous city for everyone. Our extensive efficiency programme has already helped reduce operating costs this year by £194M and is ahead of budget and more than offsets any reduction in revenue. The introduction of the Elizabeth line later this year will further improve ridership across the Capital and transform journeys for millions of people.”

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