A major funding crisis is looming over London’s overcrowded and underfunded public transport network, which faces a huge shortfall despite the government’s investment of a record £40bn to pay for Crossrail and upgrades to the tube system. Transport for London says that the amount is not enough to cover the £16bn trans-London Crossrail project and the sorely-needed tube improvements. But the Department for Transport insists that no more funds are available. 

Baroness Jo Valentine, chief executive of the business group London First, has warned that the promised government funding, which was welcomed as a major boost for the city two years ago, is now seen as insufficient for a deteriorating tube network whose repair bill alone is increasing by billions of pounds. The group said that London Underground’s finances should stand up to increased scrutiny or the city could risk losing some of the promised £40bn in a public finance squeeze. 

The funding dispute between the government and London Underground is complicated by an ongoing political battle over whether the public or private sector is best-equipped for maintaining the tube network. After the private contractor Metronet went bust in 2007, its job of maintaining and upgrading three-quarters of the network was taken over by LU, with the remainder maintained by Tube Lines, the only company left in the public-private partnership (PPP) scheme set up by the government in 2003. Tim O’Toole, the former head of LU until April, had made a strong case for the transferring of Metronet to the public sector, saying that the taxpayer would get a better deal, but Tube Lines has argued that there was no evidence that Metronet had become more efficient under LU management. 

As the battle over funding continues, what looks certain is that not all of the improvements and upgrades planned for the tube network will take place – a blow for London’s long-suffering tube passengers, who can only hope that huge fare hikes will not be considered an option for plugging the revenue gap. 

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