Tube and bus fares are expected to rise by around four per cent next year, London’s transport commissioner has revealed.
This will potentially be followed by above-inflation increases in subsequent years as Transport for London seeks to rebuild its finances post-pandemic.
The Standard revealed on Tuesday that Tube fares were higher in London than on any other world city metro. TfL fares rose by an average of 5.9 per cent earlier this month, including a 12 per cent hike in zone one peak-hours Tube fares.
TfL commissioner Andy Lord, asked by the London Assembly for TfL’s fares projections beyond the current financial year, said: “In our business plan, we assume a four per cent rise in the year 2024/25 in fares.
“Then beyond that, we are currently assuming a RPI +1 per cent fares increase in subsequent years, though obviously all fares decisions are ultimately for the mayor. But that is our current working assumption.”
TfL’s 2023/24 budget, published on Wednesday, said the most recent fare rise was expected to generate it an additional £98m.
Over the next 12 months, TfL expects a seven per cent increase in passenger numbers, increasing its fares income by more than £800m, and helping it to move into “profit” for the first time in its history.
Fares now account for 65 per cent of its income, down from 72 per cent pre-pandemic.
TfL fares normally rise each January, in conjunction with national rail fares, though during the pandemic the increases did not take effect until March.
Mayor Sadiq Khan has the power to reject TfL’s fares proposals and impose a different figure.
Seb Dance, the deputy mayor for transport, said: “The mayor is keen to do everything he can to keep fares low. The bus fare is still the lowest in the country [at £1.75], and we are committed to keeping it that way.”
Mr Lord said passenger numbers remained “below pandemic”, though TfL was doing better than other parts of the UK. “We are continuing to look at how we can encourage ridership overall, particular on Mondays and Fridays,” he said.
“We forecast, as part of our business plan, a steady growth to 86 per cent of pre-pandemic levels – excluding the Elizabeth line – on Tube and rail modes, and 91 per cent by December 2025. We are going to see what we can do to accelerate that.”
TfL’s new budget predicts it will make a £79m “operating surplus” in 2023/24.
It is expected to generate £9.1bn in revenue, covering its expected £7.9bn operating costs as well as £745m in “capital renewals” - repairs or upgrades to infrastructure - and the £417m it has to pay in interest charges.
This should leave £79m to be reinvested back into the capital’s transport network.
However about £600m of savings will have to be made by 2025/26.
New trains will be introduced on the Docklands Light Railway (DLR) next year and on the Piccadilly line from 2025.
TfL also wants Government funding to increase the size of its 70-train fleet on the Elizabeth line, to cope with expected overcrowding at Old Oak Common when the first leg of the HS2 high-speed line opens in around a decade.
Mr Khan said: “Before the pandemic, prudent financial management had placed TfL on the cusp of breaking even for the first time in its history.
“Now, after a very difficult few years due to the pandemic, we are set to deliver a surplus for the first time ever.
“However, the hard work is not over and we will work with the Government to ensure we get the national investment we need to continue delivering a world-class transport network for our city.”