TFL breaks all records

TfL enjoyed another record year in 2012/3. The recently disclosed annual report & accounts show traffic levels on the up with underground journeys exceeding 1.2bn for the first time. Only bus journey numbers bucked the upward trend (and then only slightly).

However, debt levels are also up. Long term borrowings shot up 29.3% to £6,393.2m (2012, £4,943.9m), and has more than doubled in the last five years (2009, £3,017.6m).

Crossrail factor

Crossrail is likely to hang heavily on TfL finances for decades to come. That’s clear from a perusal for the accounts.

Funding for this £14.8bn project is being broadly split three ways between taxpayer, London businesses and the fare paying passenger. In 2013, the DfT Crossrail capital was £1,904m (2012, £1,217m), and accounted for 58.5% of all capital grant expenditure, and 34.8% of total grants (capital and revenue combined).

Non Crossrail expenditure, however, has been badly squeezed and nearly halved to pay for it this with DfT capital grants down to £1,179.6m, from £1,620.0m (2012) and £2,022.2m (2011).

The report is keen to ensure what it calls ‘prudential borrowing’ (for funding capital investment increased by only £409m (to £7,532m from £7,123m) during the year. However,   this is a net figure masking the repayment of £1,091m short term debt and its replacement with £1,500m long term (ie more than one year)  debt.

Although financing costs (including interest charges) declined to £780.5m (2012, £943.3m), this was due to special circumstances which are unlikely to be repeated. The coming years will see how TfL copes with servicing the mounting interest problem, and the effects are likely to be felt by fare paying passengers when Crossrail becomes operational.

Record Traffic Levels

London’s population increased 12% in the last ten years. Combined with the Olympic Games factor (of handling an additional million passengers daily), this notched up traffic to unprecedented levels. Only the bus sector failed to improve on the previous year:

Number of passenger journeys % increase (decrease) 2012/3

(m)

2011/2

(m)

Buses (0.4) 2,335.0 2,344.0
Underground   5.0 1,229.0 1,171.0
Overground 21.4     124.6    102.6
DLR 16.0     100.0      86.2
Tramlink   5.6       30.1      28.5

TfL gross income for 2013 was £4,495.5m, 7.5% up on the previous year (£4,180.9m). Around 80% of this came from fares revenues (congestion charges, commercial advertising fees and other miscellaneous income streams accounting for the remaining 20%).

These results are a slight improvement on the preceding year as costs rose less sharply than revenues:

Income & Expenditure (m) % Increase (decrease) 2012/3 2011/2
Summary:
Gross income   7.5   4,495.5   4,180.9
Gross expenditure   4.0 (6,480.5) (6,230.4)
Net Cost/Deficit  (3.1) (1,985.0) (2,049.5)
Other income (expenditure)     (373.4)     (499.1)
Total revenue grants 29.4   2,210.0   1,707.8
Total capital grants   4.4   3,253.6   3,115.3
Surplus 36.5   3105.2   2,274.5

The DfT provided most of the revenue and capital grant funding. Although the DfT non Crossrail capital grant declined as previously noted, the DfT revenue grant increased sharply to £2058.2m (2013), from £1,634.1m (2012) and £1,162.7m (2011).

The biggest fare revenue improvements were recorded by London Overground (up 34.8% to £125m), partly a reflection on completion of the southern orbital route, and on the Docklands Light Railways (up 24.7% to £128m) also. Underground and Buses recorded more modest increases of 7.2% and 6.2% respectively. Bus network subsidy has been cut by more than a third over the last five years to £377m.

Capital investment increased 13.7% to £3,016m (2012, £2,652m), of which nearly half (£1,394m) was committed to Crossrail.

TfL achieved £1,417m in efficiency savings – £23m above target – amounting to around 15% of the budget. Cumulatively, it has managed to save £3,262m since 2009/10. Cutbacks in operational staff produced one of the largest savings (£105m).

Personnel Issues

The report shows that 298 members of staff (excluding Crossrail employees) drew annual salaries over £100,000 (2012, 335), and four exceeded £550,000. Commissioner Peter Hendy tops the list with a total remuneration package (excluding pension contributions) of £652,452. His annual salary (including fees and allowances) came to £331,346, performance bonuses for previous years making up the balance.

This is another record TFL is probably less keen to publicise.

Tucked away elsewhere, it is reported that permanent staff numbers increased by just 0.7% from 25,668 to 25,845, while the number of agency workers shot up by 19.1% during the same period (from 1,826 to 2,175). Although the numbers are relatively small, would this be a symptom of creeping casualisation?

 

627/Jul 13

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