LT head admits PPP will not solve Tubes funding needs

13 Apr 00
London Transport's chief executive has admitted to MPs that London Underground would still face a 'funding gap' if the proposed £8bn public-private partnership went ahead.

14 April 2000

Giving evidence to a House of Commons sub-committee looking at Tube funding, Denis Tunnicliffe said that the PPP contracts for the Underground could be signed within the next 12 months. But he conceded additional funding might be necessary to force improvements.

The funding row was further ignited by Professor Stephen Glaister from the University of London, who claimed that the taxpayer may face a bill of almost £80m per year over the next 30 years to cover the cost of the PPP.

Tunnicliffe said he could not put an exact figure on the shortfall and it was better to find out the true cost through the bidding process.

The contracts for running deep-surface and sub-surface lines could be in place by April 2001. If so, it could provide one of the first major political tests for the new London mayor, if an anti-PPP candidate is elected this spring.

The out-going LT chief executive, who leaves his job in the summer, also conceded that government support, running into billions of pounds, might be necessary.

Glaister reiterated findings published on April 12 in a report, Getting Partnership Going. This claimed that a bond system would be far cheaper in the long run and would require less funding from the taxpayer. He admitted that whatever system was adopted, government funding, probably through taxation, was inevitable.

The committee also took evidence from Dr Jean Shaoul of the School of Accounting and Finance at the University of Manchester. She agreed with Glaister over public funding and said this should fall on the national as well as the local taxpayer. 'I certainly feel there is a case for public funding. There is a very strong case for some form of national funding because this is an asset that services not only the people of London but a much wider public.'

Declan Gaffney of the School of Public Policy, University College London, questioned whether it was the National Audit Office's place to carry out a Public Sector Comparator between the PPP and other forms of funding. He said NAO studies were not there to validate government policy beforehand but to determine their cost and effectiveness after implementation.


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