LondonUnlocked

The Truth Behind the Funding Gap

Articles, LondonUnlockedEditor1 Comment

200809121131.jpgIn our past two articles on the 'funding gap' in TfL's books we have focussed on the implications for the Mayor, future transport projects and London's tax-payers.

Andrew Gilligan, writing in the Evening Standard, turns his attention to the question of who is to blame. He places the fault directly at Tube Lines' door:

TfL reckons [the maintenance work] should cost £4.1 billion. Tube Lines says it should cost £7.2 billion. After several months of research and modelling, the arbiter ruled on Tuesday that a fair price for the work is between £5.1 and £5.6 ­billion.

In other words, the real story this week is the fact that Tube Lines, the ultimate cowboy builder, wants to charge up to £2.1 billion more than an independent expert reckons the work should actually cost (and £3.1 billion more than TfL says it should cost). This is no “shortfall”, it is a greed and inefficiency premium.

The entire article is a must read.

The Economist, meanwhile, also takes a look at TfL's problems, questioning where the money will come from to solve this problem - their suggestion would be an embarrassing one for the Mayor:

Tony Travers, an economist at the London School of Economics, points out that a business tax designed to pay for Crossrail is not ring-fenced and could be diverted for a few years to plug the funding gap in the Tube upgrade.

Perhaps because of this, TfL is apparently on the search for a good advertiser. Wasn't that exactly the sort of activity which candidate Johnson mocked Mayor Livingstone for undertaking?