THE BLOG

Could Crowdfunding Be the Answer to TfL's Financial Woes?

08/07/2016 14:34 | Updated 08 July 2016

As the financial pressures on Transport for London (TfL) grow, it is more important than ever that it considers alternative ways of financing its growth and infrastructure.

The organisation must find more than £640million of savings over the next four years to cover the Mayor of London's fares freeze alone.

Add in to that at least £30million to cover the implementation of the new bus hopper ticket and it is clear that TfL and the Mayor will have to make some difficult decisions.

To this end, my new report suggests harnessing the success of online crowdfunding to top-up funding for local transport projects.

The boom in websites like Kickstarter and Gofundme shows there is a willingness among the general public to invest in projects in which they have a personal interest.

It is perfectly feasible to assume that local campaigners and small businesses would be happy to contribute money towards projects from which they have a direct benefit.

Investors could be rewarded with discounted tickets and other perks, just as they would see a return for backing an unknown start-up.

My report also looks at proposed transport projects which have stalled because their benefit to cost ratio falls just short of making them feasible.

TfL makes many of its infrastructure decisions based on financial projections, and when they don't meet a specific requirement a new project will often not be taken further.

This has led to areas such as Sutton being forgotten by most big projects just because the return gets close but never quite adds up.

Crowdfunding has a role to play where the demand is high but the finances are not fully available. Why not harness that demand and encourage local investment in individual projects?

This modern financing technique puts Londoners in the driving seat of the city's transport projects and gives communities the power to shape their local transport infrastructure.

Businesses across the capital have used crowdfunding to grow and expand their businesses. There is no reason TfL cannot do the same to top up funding for important local projects.

This is something I believe could really make a difference to the way transport projects are considered.

My report suggests TfL set up a new website that lists all of its transport projects that could benefit from crowdfunding - communities could even suggest their own.

It is vitally important that TfL continues to provide London with a transport infrastructure that can meet the growing demand.

Crowdfunding will not solve every problem but it could go a long way to getting many stalled TfL projects back on track.

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