As outlined in its business plan, published in November 2017, TfL has been dealing with an operational deficit for the last five financial years ranging from £458m in 2016-17 to a forecast £968m in 2018-19.
TfL has been required to absorb an average £700m annual reduction in government funding over these five years, and central government funding will stop completely at the end of the financial year.
TfL learned of cuts to its grant funding back in the 2015 spending review and has since been trying source new revenue streams to replace central government grant.
One such revenue stream is the new Elizabeth Line (formerly Crossrail) which, as well as adding 10% to London’s rail capacity, is predicted to raise £3bn in passenger income over the next five years.
Other factors that have contributed to the deficit position includes a fall in passenger numbers, according to TfL’s business plan.
Despite the impending deficit, TfL commissioner Mike Brown said in the business plan he was confident that TfL “will deliver a net operating surplus by 2021-22”.
A TfL spokesperson said: “Through our recently published budgeted and balanced business plan, we are continuing to invest record amounts in the transport network to deliver a wide range of improvements and make London a fairer, greener, healthier and more prosperous city for everyone.
“Our extensive efficiency programme has already helped reduce operating costs this year by £194m and is ahead of budget and more than offsets any reduction in revenue.”
