In many ways, the bailout was not dissimilar to the billions being thrown to private operators of the railways and buses outside of London, points out Professor Tony Travers of the London School of Economics and a member of the Government’s crucial review of HS2. “National rail will have received more in Government grants,” he says. “But the difference is Khan’s [bailout] came with terms and conditions attached.”
The London mayor had to agree to a Government review of TfL’s finances by consultancy KPMG. In addition, Khan’s fare freeze, a central plank of his 2016 manifesto, had to be binned. And arguably most roiling, the Prime Minister could elect two “observers” to the TfL board.
Inserting Andrew Gilligan, the PM’s transport tsar, and civil servant Clare Moriarty, left little doubt of Johnson’s desire to tighten its grip on London transport.
Byford says: “The fact that they have imposed two observers onto the TfL board, until further notice, as a condition of that funding, and no prospect of those two individuals, no timetable, as to when they might come off; I think is de facto evidence that they [the Government] do want to play a closer role.”
He insists, however, that he will “work with anyone” and is not “spooked” by the KPMG probe.
Nevertheless, Khan is not taking matters lying down. He has launched his own review, and appointed a panel of heavy-hitting experts to draw their conclusions of how to extricate TfL from its biggest-ever mess.
Travers says: “You don’t have to be a seasoned political observer to see that the Sadiq Khan review is a counterpoint to the Government’s review which is being undertaken by KPMG. The latter has grandee outsiders on it who will be hard to challenge. The KPMG review is now operating in the shadow of the Mayor’s review with these hard-to-challenge senior figures on it.”
The struggle between Whitehall and City Hall is not new. “Central government has always got an eye on how much it is costing them,” one industry veteran says. “This battle for power between London and Whitehall goes right back to the battle between Livingstone and Thatcher in 1984 when the Prime Minister nationalised London transport and the central government ran it until 2000.”
For all the criticism of overseeing a transport network that bleeds cash, Khan can be credited with narrowing annual losses. TfL board papers reveal a like-for-like £1bn reduction in the net cost since coming to power.
Travers says: “Khan has faced three key problems. Two were not of his own making: a reduction in central funding and the levelling off of a long-term increase in passenger numbers.”