The Spending Plan policy 25: scrap operating subsidies to TfL

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May 18, 2015 11:30 AM

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Transport for London plans indicate that it is expecting operating grants to fall from £874 million to £704 million in 2015–16 before rising steadily to £756 million in 2019–20. Meanwhile, it expects its fares income to rise steadily from £4.3 billion in 2014–15 to £6.3 billion in 2019–20.114 With buses and trains packed full of commuters, taxpayers should not be expected to fund the operating costs for its networks. If it can’t break even when its services are straining at capacity, which many are, then that tells the observer something about how well-matched or otherwise supply and demand are.

Gradually, spread over four years starting in 2016–17, the Department for Transport should eliminate operating grants to TfL. It should be expected to find the difference through efficiency-saving cost reductions if possible and if not through fare increasing or service cuts. By 2019–20 this would save over £750 million.

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