Business group London First and consultant Arup say that motorists living in the city should no longer pay their collective £500M in Vehicle Excise Duty to the Treasury. Instead a new London Vehicle Ownership Duty could generate an additional £300M.

This and a series of other measures – such as ‘smart’ road pricing and reform of bus and rail fares – are needed, they say, to help plug Transport for London’s annual funding deficit, thought to be up to £2Bn as a result of a fall in passenger numbers due to the pandemic.

The report says that a new smart road pricing scheme would replace the current congestion charge and low emission zones with a system that better reflects when and how far vehicles are driven.

For public transport, it suggests a harmonised price structure for buses and trains that brings together the flat fare approach of the former with a zonal system of the latter.
London First chief executive Jasmine Whitbread said with more people working from home it is clear “that the old model of relying on fares to fund the capital’s transport network is dead. Without action TfL could face a £2Bn blackhole in funding.”

Arup’s global planning leader Richard de Cani added: “For London to recover quickly from the pandemic, it needs to reimagine its future. Embracing new ideas will secure TfL’s long term future.”

Transport for London said it welcomes the report “which backs our call for financial support to help us through the Coronavirus pandemic”.

On Friday a plan was published by TfL setting out how it aims to achieve financial sustainability this decade. It calls on Government to provide £1.6Bn in capital funding every year from 2023 to 2030 to be used for new trains and signalling, zero emission buses and to fund upgrades to Underground lines. It also makes the case for a long term, multi year funding agreement similar to that allocated to Highways England and Network Rail.

London’s Transport Commissioner Andy Byford said: “The last year has shown that TfL’s current reliance on fares revenue as a primary source of income is just not sustainable and needs to be fundamentally changed to drive a robust recovery and thriving future.”

(Photograph: Alastair Lloyd)