Sadiq Khan blasts government for ‘forcing London to pay twice’ for Crossrail delay

Transport for London (TfL) has admitted its fare income will be £2.1bn lower than expected as it battles a "perfect storm" of pressures on its finances.

In its business plan for ​2019-20 to 2023-24, TfL said a “subdued” economy and a £700m reduction in central government funding for challenges facing the organisation.

It said fare revenue income had fallen seven per cent behind what was achieved in its 2016 business plan.

The delayed opening to the Elizabeth Line will cost TfL £600m alone in lost revenue over the next five years, it said.

Yesterday the Greater London Authority (GLA) agreed to borrow £1.3bn from the government and to fund a further £100m in cash itself to keep the troubled project afloat.

However, London mayor Sadiq Khan warned that while his office had agreed to foot the bill for the extra Crossrail costs, it would only be achieved with “extreme difficulty”.

Khan hit out at the government over the Crossrail delay, saying that while the government had agreed to assist with financing the delay costs in the short term, it had “refused to provide any support for the fare income TfL will forego because of the delay”.

He said the government’s decision to remove TfL’s operational grant funding meant it was “essentially forcing London to pay twice – first, with the removal of the operating grant and now in its refusal to assist with the revenue impact of the delay to the opening of the Elizabeth Line”.

The Elizabeth Line, which will stretch from Heathrow in the west to Abbey Wood in the east through central London, was scheduled to open this December with a budget of £15.4bn.

In August it was announced that the project would open in autumn 2019 owing to delays in signalling and infrastructure testing.

Yesterday new Crossrail chief executive Mark Wild admitted that he could not commit to the 2019 opening date.

The Elizabeth Line delay came as a huge blow to TfL, which was banking on the railway to boost its fare revenue and ease the burden of its near £1bn operational deficit.

The good news for TfL is that it is forecast to reduce its £968m deficit by £200m by the end of the year and into 2019. It said it managed to reduce the deficit by embarking on a rigid programme of cost cutting.

However, TfL confirmed fears that the pressure on its finances would force it press pause on key transport schemes, such as the Piccadilly Line and deep Tube upgrades.

"While TfL is planning to follow the introduction of new trains on the Piccadilly Line with new signalling, and then to upgrade the rest of the deep Tube lines, such large-scale investment will not be possible without capital funding from the government," it said.

A further question mark appears over the mayor's flagship Oxford Street pedestrianisation project, which was scrapped in the summer. There is no mention of Oxford Street in the business plan.

David Leam, director of infrastructure at London First, said: “This business plan shows the impact that a perfect storm of government cuts, reduced farebox income and Crossrail delays is having on TfL.

“Delays to station improvements, new trains and the Piccadilly line signalling upgrade mean that more Londoners will have to get used to less reliable and more overcrowded journeys.

“Getting future investment back on track requires new sources of funding to be identified beyond businesses, who already bear a heavy burden. This needs to include exploring selling existing assets like the Crossrail tunnel, devolving tax revenues to London, and looking again at fares.”