Monday 27 November 2017 2:31 pm

Transport for London blames Brexit uncertainty for surprise fall in passenger numbers

Transport for London (TfL) has blamed an unexpected fall in passenger numbers on Brexit uncertainty and "economic factors affecting the whole of the UK".

The transport body said in its draft business plan for 2018/19 to 2022/23:

We have seen lower growth in demand for our services than previously forecast for this year, largely owing to economic factors affecting the whole of the UK, including the uncertainty of Brexit.

Lower consumer confidence, GDP growth stagnating, real wage growth and a softening housing market are all affecting services and retail in London, leading to lower than forecast passenger numbers.

Read more: TfL says major Tube upgrades cancelled because of dip in passenger numbers

Current patterns in rail journeys show a year-on-year reduction in trips within Zone 1, which TfL said was reflected in its lower passenger income, and that the economic headaches had also buffeted its commercial revenue.

And it expects the negative pressures on demand for London's public transport to continue for the first half of its five-year business plan.

The transport body's overall income for 2016/17 was £6.8bn, and for 2017/18 it is expected to drop to £6.5bn, while passenger income is expected to dip from £4.7bn for 2016/17 to £4.6bn for 2017/18.

London Underground passengers are expected to fall from 1.4bn in 2016/17 to 1.3bn for 2017/18.

TfL is also having to contend with the grant cut from central government. Its grant funding from the Department for Transport has been reduced by £2.8bn from 2015/16 to 2020/21.

Mayor Sadiq Khan said in the plan: "Our spending decisions become even more important in today's economic climate. While all other major transport operators in the world receive some form of central government subsidy, the government has taken £2.8bn away from TfL's operational funding."

Tube upgrades shelved

TfL announced last month that upgrades for the Jubilee Line and Northern Line had been shelved after a surprise two per cent dip in passenger numbers on the Tube.

That meant the need to rejig TfL's business plan as the Tube is the only part of the network to make a profit, and the transport body was left facing an "investment prioritisation process".

It shelved the upgrades to buy more trains for the two lines to save £600m over the business plan period.

Fare freeze impact

Critics have also said pointed the finger at mayor Sadiq Khan's fare freeze, with London Assembly Conservative member, Keith Prince, saying earlier this month: “In just 12 months, Sadiq Khan’s con of a ‘fares freeze’ has eluded millions of travelcard users and cost TfL hundreds of millions of pounds."

But in its business plan, TfL said early indications were that the fare freeze "has helped to dampen the effect of these negative economic factors".

Where fares have been increased on the National Rail network, this has led to "much sharper reductions in passenger numbers for those operators", TfL added.

This year, TfL noted it had seen lower demand for Tube services since the record high for 2016/17, and it is expecting demand to pick back up towards the end of its five-year plan, as the Elizabeth Line brings new passengers from outside London onto the Tube.

Along with banking on the Elizabeth Line to bring a considerable boost, TfL is also planning to ramp up income from commercial activities.

It plans to increase its advertising revenue, and has taken the first steps to establishing a consulting arm.

Read more: TfL unveils plan for Rotherhithe-Canary Wharf pedestrian and cycling bridge