Europe

London crisis: Khan enters panic mode over £1bn black hole – new council tax hike planned

Sadiq Khan 'needs to show proposals for TFL future' says Scully

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Adding insult to injury, the TfL network, which is facing a funding gap of £1.3billion, may also cancel free travel for the over 60s in a bid to save cash. Deflecting the blame elsewhere, the London mayor accused ministers of planning to “unfairly punish Londoners” by refusing to agree on longer-term financial aid for TfL, which relies on fare revenues that have dropped by billions of pounds during the Covid pandemic.

The Mayor has ruled out an additional fare rise but bowed to demands to review concessionary travel, particularly for older passengers, raising the age of the over-60 Oyster card, which allows holders who live in London to travel free of charge.

The biggest change will be an increase in council tax, via the London precept collected for City Hall, by about £20 per property a year.

Mr Khan said: “The sole cause of TfL’s financial problems is COVID-19 and, with the emergence of the Omicron variant and the new guidance to work from home, it’s never been more urgent for the government to agree a fair, sustainable, long-term funding deal for TfL – for the benefit of our capital city and the whole country.”

He added: “Train companies across the UK have faced the same emergency funding issues as TfL.”

The mayor also said: “In every case, the government has bailed out the private rail operators with long-term agreements. However, the government is treating London differently.”

The Labour mayor accused ministers of “holding London to ransom” by threatening to withhold funding without forcing changes, and that he had been left with no alternative but to plan to increase council tax.

Fares were raised by 1 percent above inflation as part of the earlier agreements, but Khan said: “I refuse to hike up fares further as this would be unfair and counterproductive, discouraging Londoners from using public transport.”

TfL is already experiencing industrial action led by the workers union, the RMT.

Strikes have been held over working conditions and pay rates of night tube drivers.

Multiple walkouts have left the system at a standstill.

Last week, TfL said it would also be cutting up to 500 jobs in a bid to save more money.

Many of the jobs will be lost from London’s larger underground stations.
Other proposed changes include applying all-day peak fares to Heathrow on the tube, raising the price of an Oyster card deposit, and stopping the use of rail travel cards to reduce ticketing costs.

Ministers have said throughout that they will ensure continued funding for the capital.

The Transport Secretary, Grant Shapps, said earlier this week: “The government is committed to supporting London and the transport network on which it depends, whilst balancing that with supporting the national transport network.”

Mr Shapps also said: “We have thus far supported London with over £4 billion funding and will make sure services are protected whilst work on the next settlement is underway.”

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TfL meanwhile has warned passengers of further widespread disruption on the tube network on Friday evening and Saturday, with strike action by the RMT likely to close several lines and lead to much busier services elsewhere, in an ongoing dispute about staffing the night tube.

A TfL spokesman said: “We continue to discuss our funding requirements with the Government, who have indicated their intention to extend our funding support for TfL through until December 17.”

He ended: “There is no UK recovery from the pandemic without a London recovery and there is no London recovery without a properly funded transport network in the capital. We hope the discussions can be successfully concluded soon.”

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