Shaun Bailey is a member of the London Assembly and the Conservative candidate for Mayor of London.
Transport for London is broke. So last week, the government had to step in and give it a bailout worth £1.6 billion.
This is good news for key workers, for Londoners, for our economy. Bus and tube services will return to normal and people will be able to get to work.
But it’s bad news for Sadiq Khan, the Mayor of London. Let me explain why.
Given the situation we’re in, a bailout seems reasonable. Those of us who can stay at home are staying at home. So bus and tube use has fallen massively — along with TfL’s revenue. TfL’s chairman, Sadiq Khan, was right to ask for a bailout. Any other mayor would have been in the same position.
But that’s not the whole story. Khan originally asked for a bailout of £3.2 billion, a sum far higher than the financial impact of coronavirus. And that’s because the bailout he wanted wasn’t for coronavirus. The bailout he wanted was for coronavirus and four years of bad management.
Turn back the clock to just before Sadiq Khan became mayor. TfL had healthy finances and they had a plan for the future: to put their funding on a sustainable footing. As mayor, Boris Johnson had already found £12 billion in savings. The next mayor only had to find £4 billion in savings in order to put TfL in a sustainable position.
But Khan didn’t follow Boris’s example. He didn’t even follow basic maths. Khan pledged to freeze fares and increase TfL’s profits — all without cutting spending. His opponents, including the Greens and UKIP, told him it was impossible. And they were right. Not that Khan minded. He focused on his fare freeze and didn’t bother to look for more savings. And even after all that, he still managed to break his pledge. If you’ve got a travel card, or if you use the daily or weekly Oyster cap, you’re paying more for your travel than in 2016.
The only fares he ended up freezing were single fares. But most Londoners didn’t notice — because most Londoners don’t use single fares. Khan tried to claim that this was his plan all along. I’m not sure how he can claim that. So far, his partial fare freeze has cost TfL over £640 million. Was that part of his plan too?
Meanwhile, Crossrail has been delayed multiple times — costing £1.35 billion in lost fares. We still don’t have a firm opening date for this service that we badly need. And forget about Crossrail 2. Sadiq Khan certainly seems to have forgotten about it. Sadly, this is normal for our Mayor. He has delayed or cancelled 17 big infrastructure projects, like the upgrade to the Piccadilly Line. One in eight of London’s major roads are in a bad state of repair. The mayor can’t take projects forward but he’s managed to drag London’s transport backwards.
You can actually put a number on it. TfL now has debts of £13 billion. By May next year, those debts will be £14 billion, the maximum level of debt that TfL is allowed to reach. The worst thing is that Londoners are stuck with the bills. We’re stuck with the bill for all that debt — £400 million in interest payments every single year. And we’re stuck with the bill for higher fares. Because TfL has finally admitted that fares will have to increase by more than the rate of inflation. A subject that Khan seems keen to avoid.
So now we know what four years of bad management looks like. The mayor broke his pledge to freeze fares, while still managing to lose revenue. He delayed or cancelled infrastructure projects, while still managing to lose savings. TfL should never have needed such a big bailout. The bad news for Sadiq Khan is that the bailout comes with strings attached. TfL will need to return tube services to 100 per cent. They’ll need to put ‘Stay Alert’ advertising across TfL. Staff absences need to be reported direct to the government. A review of TfL’s finances and structure is set to follow. And government officials will now sit on TfL’s board.
These are tough conditions. But this Mayor needs tough conditions. Or as a senior government source put it, ‘We were not prepared to accept ludicrous demands from a profligate Mayor and this money comes with many strings attached.’
So let’s be grateful that the government can afford to bail Khan out. And let’s be grateful that Londoners can express their view of this mess at the polling station next year.