Fare hikes feared amid funding gap
Updated on 10 July 2009
London's transport network faces a potential funding gap of £1.7 billion by 2018 because of the effects of the recession, leading to the prospect of higher fares, reduced services and improvements being cancelled, an official report has warned.
The London Assembly said reductions in passengers and a freeze in fares next year under a formula linked to inflation meant that the loss of income could "spiral" in the coming years.
The assembly's budget and performance committee said funding problems will leave Mayor Boris Johnson and Transport for London with a "difficult decision" to make.
Options would include increasing fares at a rate "significantly higher" than inflation, cutting services, deferring or cancelling planned improvements and expansions and finding greater efficiency savings in addition to £2.5 billion already required.
Committee chairman John Biggs said: "Depending on the length and severity of the recession, the next few years will be very challenging for the Mayor and Transport for London.
"Finding ways to plug the gap that do not impact on services or place a large financial burden on fare payers will be difficult.
"The Mayor is not required to consult with Londoners about the fares, but we feel it is essential that he does so. Londoners need to know what the options are, especially since they will have to bear the burden of any increase."
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