Economic news Embassy 59
TFL chief calls for tax devolution
London’s departing transport commissioner has called for more of the taxes raised in London to be retained by the city’s authorities to finance infrastructure projects vital to keep the city moving during a period of historic expansion.
Speaking at an AERL meeting, Sir Peter Hendy said with a population of 8.6 million London was growing at its fastest rate in 150 years and further infrastructure investment was needed to keep the city competitive, relieve congestion, open up new areas for housing and improve air quality.
Hendy has worked with two London mayors and oversaw huge infrastructure projects in the run-up to the Olympics as well as Crossrail, Europe’s largest engineering project. Improvements have meant that a record 4.73 million people can now travel on the Tube in one day.
Challenge for new London mayor
But the new Mayor will face the challenge of smaller government grants which by 2020 will only cover capital investment, said Hendy.
“Funding has been hard to find during the world recession,” he said, adding that long-term planning and innovative financing of day-to-day operations and projects such as Crossrail 2 were critical to keep London moving.
Hendy estimated that 50% of the £22-25bn needed to build Crossrail 2 would have to be generated by the city itself.
But scope for further fare hikes and savings were limited, he said. TFL has already made £16bn in efficiencies, including the axing of 1400 jobs, which put Tube bosses on a collision course with the transport unions.
Hendy pointed to alternative funding methods such as building on TFL’s prime real estate for housing to generate income.
Rising rates derived from new properties built as a result of improved transport links was another option. This part-financed the Northern Line extension to which will serve the new US Embassy.
Easing London’s congested roads is a priority. More cycle paths are planned but retro-fitting London’s ancient road network with segregated cycle lanes has been a challenge.
AERL members visited TFL’s Surface Transport Control Centre which uses a sophisticated signalling system to manage traffic flow.
Digital and mobile technology had revolutionised the way TFL communicates with its customers. By making its live data publicly available more than 500 apps have been created to help Londoners get around the capital easily. “The best app for the Tube was designed by an Australian banker in Sydney!” he joked.
Smart technology has spurred the growth of businesses such as cab company Uber, which is challenging traditional London taxis and has led to a surge in the number of cabs for hire on the roads, raising questions about whether licensing regulations are fit for purpose.
“Not every technical development is under our control and we have to adapt,” he said.