TfL funding crisis: Sadiq proposes council tax hike and Heathrow premium

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The mayor has said he plans to increase his share of council tax by an average of £20 a year over the next three years as part of a desperate bid to ease the financial crisis on Transport for London.

Prices are also likely to rise in the RPI plus one per cent from January, adding about five per cent to the cost of underground, bus and London rides.

Free travel for Londoners aged 60 or over, with the age eligibility for an Oyster+60 card increasing by six months each year, over the next 12 years, will be restricted under the proposals.

Khan said he was forced to make the proposals because the government was “imposing a ransom on London” by failing to fund TfL.

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Families already pay an average of £363 a year to City Hall and Khan’s announcement did not rule out further increases, for example to provide extra money for the Metropolitan Police. Adding £20 a year to Band D’s bills should raise £172 million a year for TfL.

Khan said he was pulling out of the TravelCard scheme, which National Rail commuters use to commute on subways and buses.

Clarification from City Hall has been awaited, but it appears passengers will have to switch to the Pay As You Go system, using contactless bank cards or Oyster cards. It looks like ‘paper’ Travelcards will be scrapped.

Metro trips on the Piccadilly Line between Zone 1 and Heathrow Airport will be charged at higher rates throughout the day. Crossrail fares will also include the Heathrow Premium.

Daily and weekly rate caps will remain in place to help reduce airport worker costs.

Khan hopes the changes to the price structure will lead to an increase of £60m to £80m a year.

The deposit value on an Oyster card will increase from £5 to £7.

All proposals will be consulted prior to submission. New rates usually start in January while council tax increases from April.

TfL has to become self-sufficient from April 2023 and has been required to generate an additional income of between £500m and £1bn annually.

TfL wants £500m for the remainder of this financial year, £1.1bn for 2022/23 and £400m to £500m for the next two financial years, plus agreements on long-term capital financing to maintain the capital’s transport network and updated.

Mr Khan said: “The only cause of TfL’s financial problems is Covid-19, and with the emergence of the Omicron variant and the new working-from-home directive, it has never been more urgent for the government to agree to a fair, sustainable and long-term plan – a financing deal for TfL – for the benefit of our capital and the country. entire.

“The government continues to refuse to properly fund TfL, and ministers are effectively holding London for ransom, threatening to withhold all emergency funding unless more significant additional revenue is raised from Londoners for TfL.

This means that in order to help save TfL from collapse and to protect London’s economy, we are left with no alternative but to plan to increase London’s council tax by about £20 a year over the next three years. This is not something I want to do, but we have been forced down this path due to the government’s refusal to provide adequate support to TfL or to enable us to fairly raise additional revenue by transferring powers.”

Mr Khan was forced to put forward the proposals after the government refused to hand over the £500m a year London motorists pay in VED car tax to City Hall.

It has also refused to subsidize Greater London Border Fees or allow the mayor to impose a new tax on online delivery drivers.

Mr Khan said that even with new sources of revenue, TfL would still have to make deep cuts to bus and metro services, and plan on a “managed decline”.

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