London will continue to have some of the most expensive transport fares in Europe after the Government ordered four years of above-inflation hikes, the capital’s passenger watchdog has warned.
The Standard revealed last Friday that Transport Secretary Heidi Alexander had told London mayor Sadiq Khan to increase fares by the RPI rate of inflation plus one per cent next year and for the following three years.
This was in return for Transport for London receiving almost £2.2bn in Government funds to spend on major infrastructure projects between 2026 and 2030.
It could mean fare increases of around five per cent a year until the end of the decade on the London Underground, London Overground and Elizabeth line.
It comes on top of a 4.6 per cent increase in TfL fares in March that was also mandated by the Government in return for last year’s £485m grant.
Michael Roberts, chief executive of London TravelWatch, said: “TfL’s four-year settlement is based partly on the assumption that its fares will rise annually above inflation, continuing a principle seen in recent Government funding deals.
“That may come as little surprise, but it offers no comfort to Londoners who continue to feel the pinch of the ongoing cost of living crisis and some of the most expensive public transport fares in Europe.
“The news is also disappointing, with no extra funding provided in TfL’s settlement for key projects such as the DLR and Bakerloo line extensions, and the West London Orbital rail link.
“In previous years, the blow has been softened by freezing London bus fares. We look forward to seeing how TfL plans to keep fares affordable for those who need it most, while ensuring at the same time that there is enough investment to maintain and renew the capital’s existing transport network.”
Ms Alexander’s edict, which effectively removes the mayor’s discretion in setting TfL fares, means that travellers will pay TfL almost £1bn more in fares over the coming decade as a condition of the £2.2bn investment.
It was recently reported that London’s public transport system was more expensive than Berlin, New York and Paris, when daily travel costs were compared.
TfL monitors other cities via an international study carried out by Imperial College. The most recent study, published in 2023, which compared the capital with 39 other global cities, found the price paid by passengers per kilometre travelled in London was the highest.
Sir Sadiq implemented a partial fares freeze between 2016 and 2021, which held the headline price of pay-as-you-go journeys at 2016 rates, though the “cap” on multiple journeys kept increasing.
A report on the mayor’s transport strategy, prepared for the TfL board meeting earlier this month, said in relation to fares: “Ensuring our fares offer value for money is vital to ensuring Londoners can continue travelling through the cost of living crisis.”
TfL added: “The mayor increased fares for the first time in 2021, and then subsequently in 2022 and 2023, due to conditions of Government funding settlements made within the extremely financially challenging circumstances arising from the coronavirus pandemic.”
The Department for Transport said the Government has assumed a fares rise of RPI+ one per cent for the purposes of calculating a “fair” central Government contribution to the funding of TfL’s capital programme.
It claimed that “it remains for the Mayor to make any decisions related to fares and generating additional revenue for TfL”.
However, when the previous Transport Secretary, Louise Haigh, said TfL fares had to mirror the 2025 increase in national rail fares in return for a £485m grant, that was exactly what the mayor decided to do.
A DfT spokesperson said: “While Government has assumed a rise in fares when calculating funding for TfL, transport is devolved in London, and it’s ultimately for the Mayor to decide the level of fares passengers pay.
“Government has provided a record £2.2 billion settlement for TfL between 2026 and 2030 – the largest multi-year settlement for London for over a decade.
“This funding will have tangible and positive impacts for people in London and across the country, boosting economic growth as part of our Plan for Change.”
