George Osborne is to strip £700m a year from state subsidies to the London transport network, according to the Financial Times. The cut is to be announced in the government’s November Spending Review, the newspaper reported, with the full reduction in grants expected to be in place by 2020.
Transport Secretary Patrick McLoughlin is looking to make TfL more self-sufficient, with grants currently accounting for 10 percent of the network’s operating costs of around £6.6 billion a year. The cuts to TfL are part of a wider slashing of the budget at the transport ministry, which has seen departmental funds reduced by 30 percent.
TfL is planning to cover the shortfall through more efficiency savings, which in recent years has seen a raft of ticket offices close in favour of paying online or with contactless bank cards.
Although the cuts come to TFL’s operating budget, not the upgrade budget, commuters are likely the main victims, with overcrowding and a paucity of trains already blighting the capital’s antiquated system.
TfL could also choose to shore up its funding by increasing ticket prices, despite overtures of a price freeze from mayoral candidates contesting next year’s election. Bus services could also be axed as a consequence of the cuts.
The Department of Transport is one of four government departments that has agreed to shoulder the chancellor's demanded cuts of 8 percent a year for the next four years. The Treasury along with the Departments of Environment, and Communities and Local Government have also agreed to the reduction.