You've Brought the Tube to Its Knees, Gordon. Now Take the Blame ; the Treasury has Told the Mayor He Must Fill a Looming Pounds 1.4 Billion Hole in the Capital's Transport Budget. Yet It Was Whitehall That Got Us in This Mess From the Start

Evening Standard - London › March 17, 2009

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Summary

LONDON'S transport network is approaching bankruptcy and nobody has a clue what to do about it. A Pounds 1.4 billion hole has developed in Transport for London's budget of some Pounds 5 billion, largely as a result of the chaotic consequences of Tube privatisation. The Treasury, indisputable father of that progeny, has disclaimed parental responsibility and told the Mayor, Boris Johnson, he will have to find the money himself.

This he cannot do. He is already carrying some Pounds 3 billion of debt from the Tube subcontractor, Metronet, which went bankrupt in 2007. He could double Tube and bus fares, but they are already the most expensive in any city in the world and passenger numbers are now falling in the recession. He could cut buses and abort his various pledges for Crossrail, looking a more reckless venture by the day. But this is not enough, and he cannot hope to raise his council tax precept by enough to bridge the gap.

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Extract

You've Brought the Tube to Its Knees, Gordon. Now Take the Blame ; the Treasury has Told the Mayor He Must Fill a Looming Pounds 1.4 Billion Hole in the Capital's Transport Budget. Yet It Was Whitehall That Got Us in This Mess From the Start

London transport is like RBS. Its losses are so gargantuan as to be unfinanceable yet equally the prospect of failure is unthinkable. Hence the lethal game of bluff now being played with the Treasury.

The transport minister, Lord Adonis, said no to any refinancing last November. I gather thi...

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