Passengers face �1.7bn cash gap from recession
MILLIONS of passengers on London’s buses and Underground could be facing the burden a �1.7 billion gap in funds over the next nine years caused by the recession. The warning comes from the London Assembly which is looking into the negative effect’ of the financial downturn on public transport
MILLIONS of passengers on London’s buses and the Underground could be facing the burden a �1.7 billion gap in funds over the next nine years caused by the recession.
The stark warning comes today from the London Assembly which is looking into the negative effect’ of the financial downturn on public transport.
Mayor Boris Johnson will either have to freeze fares or reduce them next year in line with the financial formula he has committed himself to of Retail Price Index plus one per cent, the Assembly’s budget committee predicts.
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This is due to negative inflation’ leading to falling passenger numbers.
Transport for London is already facing a drop in fares of �112 million this year, adding to the problem.
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The committee estimates income loss could spiral up to �1.7bn by 2018, depending on how long the recession lasts and the speed of recovery.
Budget committee chairman John Biggs, who represents East London on the Assembly, says in his report: “Finding ways to plug the gap that do not hit services or put financial burden on fare-payers will be difficult.
“The Mayor is not required to consult Londoners about fares, but we feel it is essential. Londoners need to know what the options are, especially since they will have to bear the burden.”
Options may include raising fares higher than inflation, cutting services, or putting back or cancelling improvements and expansion, the committee fears.
The mayor is being urged to consult Londoners about his fares decision each year from 2010 onward, as in Paris and New York.