London’s biggest business groups today launched a direct challenge to Transport Secretary Grant Shapps amid fears that the Government could impose damaging hikes in fares and the congestion charge to fill the financial hole caused by Covid-19.
In a letter seen by the Evening Standard, the business leaders express alarm that the Government appears to be keeping secret an independent report by accountants KPMG into the state of Transport for London’s finances and the causes.
They warn that “trust and co-operation” are at stake and insist the report be published in full before major decisions are taken that could damage jobs and trade.
“One of the key inputs to these conversations is the work that the Government has commissioned from KPMG,” said the business leaders. “For the sake of building trust and cooperation between the London and the country that our capital serves, this report should be published immediately.”
The Department for Transport (DfT) told the Standard it would be “inappropriate” to publish details of the report at present.
The business intervention reflects concerns among business groups after a leaked letter from Mr Shapps suggested that the Government is leaning on TfL to put up ticket prices and massively extend the congestion charge zone to raise more cash.
The letter is signed by Jasmine Whitbread, chief executive of London First, Richard Burge, chief executive of London Chamber of Commerce and Industry, and Rowena Howie, London policy chair of the Federation of Small Businesses.
They conceded that parts of the KPMG study may be commercially sensitive and have to be kept from the public, but said there was no excuse to keep the Mayor of London and Transport Commissioner Andy Byford in the dark.
It demanded: “Those directly involved in the negotiations about TfL’s future – include the Mayor of London and the Transport Commissioner – must be given full and unredacted copies.”
Mr Khan will be pleased by the intervention, which could strengthen his claim that TfL deserves a bigger bailout from the taxpayer because its problems are mainly caused by the pandemic. Allies of the mayor suspect, but cannot prove, that the KPMG study contains evidence to contradict Boris Johnson’s claim that TfL was “bankrupt” before lockdown becau8se of Mr Khan’s policies.
The letter makes clear that the trio of business leaders think TfL was “broken” by the pandemic and should be bailed out to keep the capital city running.
They said: “As you are aware, the pandemic has broken TfL’s funding model and there is a clear and urgent need for the Government to provide further short-term cash support.
“Londoners and London’s businesses require as much certainty as possible as we move into Tier 2 and confidence that TfL is not going to run out of money can – and should – be delivered by the Government as soon as possible.
“In recent years, TfL has been highly reliant on the farebox, a revenue stream which is expected to be down 70% for this year as the continuing health crisis results in a significant drop in journeys around London. The only option in this crisis is funding from central Government. Prior to the pandemic, London and Londoners were paying for their public transport system and, of course, contributing a very substantial net tax surplus for the benefit of the country as a whole. Attaching long-term conditions to this emergency funding risks big decisions being taken without adequate planning, consultation, or mitigation of unintended economic consequences.”
However, a DfT spokesperson said it would be “inappropriate to disclose further details at this stage”.
The spokesperson said: “We have agreed an extension to the support period and to rollover unspent funding from the Transport for London Extraordinary Funding Agreement, allowing further time for negotiations for a new settlement.
“These discussions will ensure London has a safe, reliable network. It would be inappropriate to disclose further details at this stage.”
DfT has previously provided TfL with £1.6bn of extra funding to ensure services continue to run during the pandemic.
A spokesperson for the Mayor said: “Businesses are right to demand transparency from Government. It’s clear that Ministers are seeking to impose a raft of conditions on any further Covid funding for TfL and sharing information that has informed their demands would be in the public interest.”