Keith Prince is a member of the London Assembly.
Much has been written about Sadiq Khan’s partial fares freeze. Indeed much has been written about Sadiq Khan’s partial fares freeze by me, including, in quite a lot of detail, here.
However those pieces focused on the fact that the current Mayor has broken his promise that Londoners would not be paying a penny more on their fares after 4 years of his Mayoralty. It is an understandable focus because Sadiq Khan has shamelessly repeated the false claim that as Mayor he has no power to freeze all fares so that proving this to be untrue has been important. You can watch Sadiq Khan finally accepting that he could have frozen fares here, although even since then he has gone back to his previous “fake facts”.
Nevertheless, focusing on Sadiq Khan’s broken promises may have obscured a significantly more important point. Namely, that even the partial fares freeze that he is implementing is grossly irresponsible. That is not to suggest that there are no savings to be made within TfL. For example, the GLA Conservatives have frequently criticised the ludicrous situation by which TfL employees are allowed to nominate an additional person who lives with them to receive free travel. The latest figures show that scrapping these nominee passes would save £33 million per year or £132 million over a 4 year Mayoral term. The Mayor is not interested.
The partial fares freeze will cost Transport for London (TfL) £640 million of lost revenue at a time when London’s population continues to grow rapidly – to 9 million by 2018 and 10 million by 2030. Given the abolition of TfL’s Government grant – a situation that was well known when Sadiq Khan made his promise – and the partial fares freeze, the Mayor will need to find upwards of £3.5 billion of savings over his Mayoral term. An ever-increasing working population means the need for more transport infrastructure will not diminish. So how can he afford to keep this promise without slashing spending on projects that are crucial to London?
Unfortunately, Sadiq Khan’t.
In December the publication of his first TfL budget revealed a document that barely held together. To try to get his figures to add up, the Mayor had whacked up long-term borrowing by 46%, sharply increased long-term liabilities by 27% and slashed useable reserves by nearly £1.7 billion. Add in incredibly optimistic predictions on efficiency savings and increased revenue as well as extremely unlikely projections on housing receipts and it was clear that the pretense that the Mayor’s fiscal recklessness will not lead to massive cuts to infrastructure spending would not survive contact with reality.
Two recent examples show just how damaging Sadiq Khan’s financial decision-making has been.
The very welcome news that the RMT’s recent proposed Tube strikes had been called off, was accompanied by the very unwelcome news that Sadiq Khan had achieved this by agreeing to reinstate hundreds of unnecessary jobs at an annual cost of tens of millions of pounds. Boris Johnson’s ticket office closures were saving TfL £50 million a year. If the new Mayor is already undoing his predecessor’s savings, what chance is there that he will make the vast additional savings Transport for London needs to make?
Last week it got worse for the Mayor. The release of the latest TfL Board Papers showed that fares income was £90 million down on budgetary expectations over the last year. Far from driving ahead with the partly self-inflicted challenge of making billions of pounds of savings, Sadiq Khan has actually managed to shift into reverse.
As soon as candidate Khan promised a fares freeze, it was inevitable that Mayor Khan would break his promise. But in desperately trying to achieve a downgraded version of that promise, Sadiq Khan is starving London’s transport of the investment it needs. That is the real cost of Khan.