Transport for London bosses were in celebratory mood at the London Assembly this week, welcoming a forecast operating surplus of some £70 million for this financial year along with the early Christmas present from the government of £485 million of capital funding for next year, while batting away suggestions that Sadiq Khan had been forced by Whitehall to abandon his fares freeze policy in return for the grant.
The Mayor announced last week that tube and rail fares in London would rise by 4.6 per cent from March next year, in line with the national fares hike, while bus and tram fares would remain frozen at 2023 levels. Government ministers, his City Hall announcement said, had “made it clear they expected TfL tube and rail fares to rise in order to secure future national funding for London”.
But there had been “no requirement” from the government to raise fares,” Khan’s transport deputy Seb Dance told the Assembly budget committee on Wednesday as it probed TfL’s spending plans for 2025/26. “It remains the Mayor’s decision as to how he sets fares. It’s a balance the Mayor has to make. The government did not say no capital unless you put fares up.” Ministers had nevertheless been clear about the balance they would expect, he added.
Khan had in any event maintained the freeze on tram and bus fares, keeping them among the lowest in the country, Dance said, with plans for a further focus on the bus network, particularly in outer London, next year, including preparations for the promised “Superloop 2”, an extension of the orbital express services completed earlier this year. The bus, the most used form of public transport in the city, was the “workhorse of the network”, Dance said.
TfL boss Andy Lord told Assembly members that the combined impact on the network’s spending next year of the increases and the freeze would be neutral, given that the 2025/26 budget had already assumed a 3.6 per cent fares hike overall. And ridership would not be hit either, he asserted, with passenger numbers continuing to grow, albeit more slowly than previously forecast as working from home rates stabilised. Ridership is expected to rise by 2.1 per cent next year, he said.
The fares rise, nevertheless, does signal a change in the balance between passengers and Londoners more generally when it comes to funding the capital’s transit network, with Council Tax payers previously taking more of the strain of balancing the TfL budget under Khan’s mayoralty.
There has been another notable shift on TfL income too, said Lord, with fares now providing 63 per cent of network revenue compared to 75 per cent pre-pandemic, but more coming in from advertising and TfL’s significant property portfolio.
Meanwhile he was keen to highlight an expected happy new financial year for TfL, with the government’s near half billion to spend – almost double the funding provided this year by the previous government, and easily exceeding Khan’s canny pitch to the Chancellor in October for “north of £250 million” for 2025/26.
Key “deliverables”, Lord said, included new Piccadilly line, Elizabeth line and Docklands Light Railway (DLR) trains and confirmation of plans for new trams and Bakerloo line trains – the current fleet being the oldest still in service in the country – along with continuing improvement work on the District and Metropolitan lines.
Subject to separate government funding will be the much-needed refurbishment of the Gallows Corner and Brent Cross flyovers and, in addition, the opening of the Silvertown road tunnel under the Thames, scheduled for the spring.
What would be a significant step-change in TfL’s capital programme would nevertheless mainly support existing commitments and represent necessary catch-up after what Lord called a “decade of under-investment” by government since 2015. This, he said, had created a significant maintenance and renewal backlog and no major new programmes underway.
“Leaves on the line” may have become a standing joke at rail operators’ expense, he continued, but they were currently the cause of major problems for aging trains like those on the Piccadilly line, now some 50 years old, which could have been refurbished or replaced earlier if funding had been available.
Warning that it would take a “number of years” to get back on track, Lord said the prize for 2026 and beyond remained a long-term financial settlement for TfL, which could finally see major developments move forward: the Bakerloo line extension to Lewisham, the DLR extension to Thamesmead and the West London orbital Overground link from Hounslow towards Hendon and West Hampstead via old Oak Common and Brent Cross.
That long-term arrangement – Lord is looking for a six-year deal – now looks increasingly likely, and in a year of positive shifts in TfL’s fortunes it could be the most significant, recognising TfL as a custodian of vital infrastructure akin to Network Rail and National Highways. This week’s devolution white paper confirmed the government’s commitment, promising a plan to achieve it “from 2026/27 onwards” as part of next spring’s spending review.
Meanwhile, following on from the rebrand of the Overground last month, workers across the TfL network will be marking its 25th anniversary year with a “refreshed” uniform, using new fabric technology while making staff “more easily identifiable to customers, especially in busier stations”. Definitely a “new, brighter look” for TfL in 2025.
OnLondon.co.uk provides unique coverage of the capital’s politics, development and culture. Support it for just £5 a month or £50 a year and get things for your money other people won’t. Details HERE. Follow Charles Wright on Bluesky.