Board

Date: 20 March 2018

Item: Draft TfL Budget 2018/19

This paper will be considered in public

1 Summary 1.1 This paper seeks the approval of the draft TfL Budget 2018/19. 1.2 The members of the Finance Committee informally reviewed the financial summaries and analysis on 5 March 2018.

2 Recommendations 2.1 The Board is asked to: (a) approve the draft TfL Budget 2018/19; and (b) delegate to the Acting Chief Finance Officer the authority to make any editorial or other minor changes prior to its publication.

3 Background 3.1 The draft Budget 2018/19 sets out in detail the strategies outlined in the December 2017 Business Plan to deliver the Mayor’s plans for improving transport and reducing our operating costs in the financial year beginning 1 April 2018. 3.2 The document highlights the programmes and milestones that will see the most significant developments or progress over the next year. 3.3 The financial schedules, scorecard measures and key performance indicators are based on the forecast outturn position for 2017/18 as at period 11.

List of appendices to this report: Appendix 1: Draft TfL Budget 2018/19

List of background papers: None Contact Officer: Simon Kilonback, Managing Director Finance (Chief Finance Officer) Number: 020 3054 8941 Email: [email protected]

Document title over one or two lines

TransportWith the possibility offor a sub-heading running Budgetover one or two 2018/19 lines Draft Draft Draft

About (TfL) Contents Part of the Greater London Authority We are moving ahead with many of family led by Mayor of London Sadiq London’s most significant infrastructure Khan, we are the integrated transport projects, using transport to unlock authority responsible for delivering the growth. We are working with partners Mayor’s aims for transport. on major projects like 2 and the Bakerloo line extension that will deliver We have a key role in shaping what the new homes and jobs London and life is like in London, helping to realise the UK need. We are in the final phases 4 Commissioner’s foreword 30 Underground the Mayor’s vision for a ‘City for All of completing the Elizabeth line which, Londoners’. We are committed to when it opens, will add 10 per cent to 6 Our scorecard 36 Elizabeth line creating a fairer, greener, healthier London’s rail capacity. and more prosperous city. The Mayor’s Transport Strategy sets a target for Supporting the delivery of high-density, 10 Budget at a glance 40 Buses 80 per cent of all journeys to be made mixed-use developments that are on foot, by cycle or using public planned around active and sustainable transport by 2041. To make this a reality, travel will ensure that London’s growth 12 Financial summary 46 Rail we prioritise health and the quality of is good growth. We also use our own people’s experience in everything we do. land to provide thousands of new affordable homes and our own supply 16 Debt and cash 52 Streets We manage the city’s red route strategic chain creates tens of thousands of jobs roads and, through collaboration with and apprenticeships across the country. the London boroughs, can help shape 18 Approach to forecasting 60 Other operations the character of all London’s streets. We are committed to being an employer These are the places where Londoners that is fully representative of the travel, work, shop and socialise. community we serve, where everyone 20 Financial trends 66 Commercial development Making them places for people to walk, can realise their potential. Our aim is cycle and spend time will reduce car to be a fully inclusive employer, valuing 22 Operational trends 70 Capital investment dependency and improve air quality, and celebrating the diversity of our revitalise town centres, boost businesses workforce to improve services for all and connect communities. Londoners. 26 Customer focus 74 Appendices

We run most of London’s public We are constantly working to improve transport services, including the the city for everyone. This means , , freezing fares so everyone can afford the Docklands Light Railway, London to use public transport, using data and Overground, TfL Rail, London Trams, technology to make services intuitive London River Services, London Dial-a- and easy to use, and doing all we can Ride, Victoria Coach Station, Santander to make streets and transport services Cycles and the Emirates Air Line. The accessible to all. We reinvest every quality and accessibility of these penny of our income to continually services is fundamental to Londoners’ improve transport networks for the quality of life. By improving and people who use them every day. expanding public transport, we can make people’s lives easier and increase the None of this would be possible without appeal of sustainable travel over private the support of boroughs, communities car use. and other partners who we work with to improve our services. We all need to pull together to deliver the Mayor’s Transport Strategy; by doing so we can create a better city as London grows. Transport for London Budget 3 Draft Draft

Commissioner’s foreword All our investment decisions are based on delivering the Mayor’s Transport Strategy.

The Mayor’s Transport Strategy has to our network of Quietways and Cycle This has helped us manage some of now been formally presented to the Superhighways. the headwinds we have faced from the London Assembly, after extensive public removal of the grant and lower than consultation. At the centre of this On the Tube, we plan to place an order forecast revenue. strategy is a bold vision for 80 per cent of for new trains on the Piccadilly line, and journeys to be made by walking, cycling begin switching on the first sections of We will continue this focus on cost and and public transport by 2041. the new automatic signalling system revenue in 2018/19 as we modernise our on the Circle, District, Hammersmith & business. This will put us on the way to As we work towards that goal, we will City and Metropolitan lines, which will generating an operating surplus for the make travel healthier, easier and more first improve reliability and then the first time in our history by 2021/22. affordable for everyone in London. frequency of train services. We will use our own land to create This Budget also reflects what we thousands of affordable homes and Next year we will bring land to market believe to be cautious income forecasts dozens of new developments. By that will deliver more than 3,000 given recent trends. Just like any other delivering new infrastructure, we will new homes, including a significant business, we will proactively manage any support thousands of jobs and bolster opportunity in Morden where we are variance to forecast. the city’s economic growth. working in partnership with the London Borough of Merton. This adds to the There are consequences from losing Our Business Plan, approved in 3,500 homes we have already brought to more than £700m a year in operational December 2017, sets out a fully funded market. We are committed to ensuring grant funding in the Government's 2015 five-year plan for delivering that strategy. that will take the most dangerous that 50 per cent of the homes built Spending Review. Despite driving record This 2018/19 Budget explains in detail what vehicles off our roads by 2020. across our portfolio will be affordable. efficiencies, we have had to suspend we will achieve in the first year of the our programme of proactive road Business Plan. Making London an even more attractive Government grant funding for the cost maintenance on both borough and our place in which to do business, to live and of operating London's transport network roads. We will continue to ensure our Safety is our top priority. This year, we to visit is also a core priority. The first has reduced significantly. From 2018/19, it routine road maintenance keeps them are again setting ourselves challenging section of the Elizabeth line will open will be more than £846m per year lower safe. It cannot be right that London is targets for reducing the number of through central London in December, than it was in 2015. denied access to the dedicated road injuries among our customers, staff and we intend to begin the first phase of funding that the rest of the country and suppliers. transforming , which will To help address this, the first thing I enjoys and we will continue to make the make the area a world-class space for did when I became Commissioner was case to Government to correct it. Every injury is unacceptable, and we are residents and visitors. initiate a wholesale review of our cost committed to the Vision Zero approach base and how we are organised. This in the Mayor’s Transport Strategy, which Londoners will see real evidence of management focus has produced real seeks to remove all death and serious the Healthy Streets Approach in action, results and, in 2016/17, we reduced our injury across all transport in London. with record levels of investment in the operating costs by £153m. We expect to This year we will, among other things, boroughs, major new street schemes reduce like-for-like costs again this year, begin to bring in new safety requirements beginning across the city, including in Old with operating costs £200m lower in bus contracts and introduce a Direct Street and at Walthamstow gyratory, new than Budget. Mike Brown MVO Vision Standard for heavy goods vehicles Low Emission Bus Zones, and extensions Commissioner Transport for London

4 Commissioner's foreword Transport for London Budget 5 Draft Draft

Our scorecard The measures in our scorecard are aligned with the objectives of the Mayor’s Transport Strategy

Our Budget and our scorecard, which we Therefore, the measures are directly use to track performance throughout the linked to the overall Mayor’s Transport financial year, go hand in hand. Strategy objective for 80 per cent of journeys to be made by walking, cycling The Mayor’s Transport Strategy or public transport by 2041, and the provides our overall strategic direction strategy’s three key themes of Healthy through to 2041. This feeds into our Streets and healthy people, a good public Business Plan, which is a fully funded transport experience, and new homes plan for how we will deliver the next five and jobs. years of the strategy. These are also assessed against the This Budget is our financial promise for four key organisational areas of Safety 2018/19 and details how we will deliver and Operations, Customers, People the first year of our Business Plan. and Financial. Each area has a 25 per cent weighting, reflecting their equal Approved by the TfL Board, the scorecard importance to our delivery for London. has been developed to provide a clear line of sight between the Mayor’s Transport Strategy, our Business Plan, our Budget and how we monitor and drive our performance.

The scorecard guides our people to focus on what is most important and what we need to do over the next twelve months to make sure we stay on course to deliver the Mayor’s Transport Strategy. It focuses on the critical success factors for the year ahead and is an objective method for tracking our performance.

Our scorecard is aligned to the objectives of the Mayor’s Transport Strategy

6 Our scorecard Transport for London Budget 7 Draft Draft

The weighting of each theme and category is shown in brackets in the scorecard.

Long-term objectives 2018/19 scorecard 2017/18 2018/19 Long-term objectives 2018/19 scorecard 2017/18 2018/19 Outcome Measure Forecast Target Category Outcome Measure Forecast Target Category

Healthy Streets and healthy people (18%) New homes and jobs (2.5%)

London’s transport Reduction in people killed or Transport investment The percentage of housing system will be seriously injured on the roads from 44.0 45.4 will unlock the delivery units we take to market in 52 50 safe and secure 2005-09 baseline (%) of new homes and jobs year that are affordable (%) Reduction in people killed or seriously injured on roads from Mode share (5%) 54.1 55.6 2005-09 baseline – incidents 80% of journeys will be 4 out of 4 involving buses (%) Sustainable mode Customers made by sustainable New elements (continued) share improvement 3 Injuries on the public modes in 2041 improve 11,928 11,683 transport network Safety and All Mayor's Transport Strategy themes (7.5%) London’s streets will be Operational improvements operations used more efficiently New tbc1 to sustainable travel (25%) All Mayor's Transport Deliver key investment and have less traffic 77 90 Strategy outcomes milestones (%) London’s streets will Number of London buses Open Elizabeth line central 3,500 6,050 N/A Dec 2018 be clean and green that are Euro VI compliant section on time

More Londoners will Average Healthy Streets scheme assessment New People (25%) travel actively 10% uplift2 A capable and engaged Workforce representativeness A good public transport experience (17%) workforce representative - all staff (%) 69.8 70.7 People of London - director/band 5 (%) 41.3 46.6 (25%) Journeys by public Tube excess journey time (minutes) 4.61 4.50 transport will be Inclusion index (%) New 46 fast and reliable Average bus speeds (mph) 9.3 9.2 Total engagement (%) 56 56

Public transport will Additional time to make New 9 Financial (25%) be accessible to all step-free journeys (minutes) Financial Customers Net operating surplus (£) £309m Budget We are prudent and (25%) Journeys by public Customer satisfaction – percentage (25%) cover our costs transport will of Londoners who agree we care 46 49 Investment programme (£) New Budget be pleasant about our customers (%)

1 This measure is currently being developed and a target will be identified by April 2018 2 10 per cent is based on the average uplift between the assessment score for the current street design and the score arising from the new design on our road intervention schemes of more than £200k 3 The four elements are an increase in public transport, cycling and walking journeys, and a decrease in general traffic levels

8 Our scorecard Transport for London Budget 9 Draft Draft

Budget at a glance

Sources of funds Facts and figures £9.8bn 6,050 975 Total sources of funds Euro VI buses trains running on our network as se of borrowing (hybrid and diesel) in woring apital ther assenger the fleet by the end the Elizabeth line rants and ash reserves inoe inoe of 2018/19 (from 3,500 comes into service £2.3bn £0.8bn £1.9bn £4.8bn in 2017/18) (from 940 in 2017/18)

626,000 people carried on London Overground on a typical 900 weekday in 2018/19 (from on-street residential 616,000 in 2017/18) electric charging points to be installed in 73% 27% 2018/19, with support spent on running spent renewing from the boroughs and and operating the and iproving the London councils networ every day networ through one of the largest apital investent prograes step-free access stations on the Underground in urope 78 network by the end of 2018/19 (from 74 in 2017/18)

Uses of funds Elizabeth 10.7million £9.8bn cycle hires in 2018/19 (from Total uses of funds line 10.4million in 2017/18) opens in December 2018 734km New capital Capital Operating of rail and Underground routes that we will operate investment renewals costs Financing in 2018/19 (from 680km in 2017/18 owing to the Elizabeth £2.1bn £0.5bn £6.7bn £0.5bn line opening)

10 Budget at a glance Transport for London Budget 11 Draft Draft

Financial summary

Operating account Affordable transport Operating costs are, therefore, broadly We have kept travel affordable by in line with the Business Plan, aside from Budget implementing the Mayor's policy of accounting treatment changes, with Year- variance to freezing all TfL fares and extending the some additional savings identified. The 2017/18 2018/19 on-year Business TfL Group (£m) forecast Budget variance Plan Hopper fare to enable multiple bus and increase from 2017/18 is also driven by tram journeys within an hour. Overall new operating costs when we open the Passenger income 4,653 4,774 3% 0% passenger income is expected to increase Elizabeth line central section. Our cost Other operating income 732 883 21% 5% above 2017/18 levels, as new services reduction programme has helped soften come into operation on the Elizabeth line the impact of the highest inflation levels Total operating income 5,385 5,657 5% 0% in December 2018. Bus services are now since 2011. more reliable than ever and bus speeds General grant 228 - -100% 0% are improving. Capital renewals Business rates 854 947 11% 2% Our operating account includes capital Operating costs renewal expenditure, which is included to Other revenue grants 79 69 -13% 25% We are already making good progress in illustrate our ongoing day-to-day cost of Total income 6,546 6,673 2% 1% turning an operating deficit into a surplus operating and maintaining our network. by 2021/22. In 2018/19, we will realise Operating cost (6,237) (6,661) 7% 1% sustainable savings of £95m by changing The significant reduction in general Net operating surplus 309 12 -96% 0% the size and shape of our operating grant funding means that we will model, save £159m by modernising the suspend our programme of proactive Capital renewals (544) (494) -9% 0% London Underground, including realising capital renewals on the road network in Net cost of operations before financing (235) (482) 105% 0% savings from exiting a private partnership 2018/19, although we will ensure safety is maintenance contract, and save £13m in maintained. We will continue to look for Net financing costs (442) (486) 10% 0% head office costs. new and sustainable funding sources for London's roads. Net cost of operations (677) (968) 43% 0% Working with our suppliers, we will also make significant savings from maximising Other capital renewals will remain in line commercial value in our bus, rail and with Business Plan, including refurbishing The 2018/19 Budget sets out in detail It is largely the same as was published technology contracts. This includes lifts and escalators, replacing track and how we will deliver the first year of in the December 2017 Business Plan, saving £65m by reviewing, retendering modernising traffic signals. This will our five-year Business Plan objective incorporating additional business rates and renegotiating bus contracts. These ensure our assets are maintained in a to turn a net cost of operations into a funding from the Mayor, allocated savings will put us on track to achieve good state of repair. growing surplus that will contribute to to increasing borough transport £1.2bn of annual operating cost savings continued investment in improving our improvements and investment in bus by 2022/23. transport network. driver facilities. This will be the first year that we receive It balances to the net operating surplus no general grant funding for operations of £12m, as in the Business Plan. from central Government. This is reflected in the year-on-year increase in net cost of operations.

12 Financial summary Transport for London Budget 13 Draft Draft

Capital account Capital investment priorities in 2018/19 Deep Tube Upgrade programme This programme will increase capacity Budget Healthy Streets on the Bakerloo, Central, Piccadilly and Year- variance to Using the Healthy Streets Approach as Waterloo & City lines. In 2018/19, we will 2017/18 2018/19 on-year Business TfL Group (£m) forecast Budget variance Plan set out in the Mayor’s Transport Strategy, award the initial rolling stock contract for we will change our streets to make them the Piccadilly line, and prepare contracts New capital investment (1,442) (1,644) 14% 9% work better for people to walk, cycle for the new signalling systems. Crossrail (1,496) (435) -71% -5% and use public transport. These changes will result in a more efficient transport extension Total capital expenditure (2,938) (2,079) -29% 5% network with a lower environmental We are creating a twin-tunnelled impact, support the economy and help extension from Kennington to Battersea Financed by: people to live more active, healthier Power Station, via a new station at Nine Investment grant 960 976 2% 0% lives. We will continue to improve Elms. This will be a catalyst for the cycling – such as Cycle Superhighways, regeneration of the Vauxhall Nine Elms Property and asset receipts 93 705 658% -19% Mini-Hollands and Quietways – and start Battersea Opportunity Area. In 2018/19, Borrowing 621 802 29% 0% transforming key locations, including we will complete passage works at Highbury Corner, Old Street and, subject Kennington station and begin fitting out Crossrail funding sources 140 324 131% 4% to a final decision by Westminster City Nine Elms station. Other capital grants 189 311 65% 46% Council, Oxford Street. Major stations upgrades Total 2,003 3,118 56% -2% Air quality and environment We are upgrading Bank, Bond Street, Net capital account (935) 1,039 -211% -14% We have a programme of measures Tottenham Court Road and Victoria targeted at all vehicles driving in London stations. In 2018/19, Bank Bloomberg to tackle the impact on air quality and station (Waterloo & City line) entrance Total capital investment climate change. We will prepare to launch will be opened and the northern ticket including renewals (3,482) (2,573) -26% 4% the Ultra Low Emission Zone (ULEZ) on hall at Victoria station, including step- 8 April 2019 in central London and deliver free access, will open. Tottenham Court four more Low Emission Bus Zones. Road station is near completion with Capital expenditure Crossrail construction investment step-free access installed in early 2018. The Budget reflects the latest work declines year on year as the project Surface assets schedules, with some phasing changes comes to an end, reflecting some re- This programme covers safety and Four Lines Modernisation to the Business Plan. We have received phasing since the Business Plan. Other reliability of highway, traffic, bus, S-Stock train roll-out additional capital grant, including funding capital investment reflects the latest coach, and river assets. In 2018/19, Modernisation work on the Circle, to improve the Emergency Services work schedules. we will replace the life-expired District, Hammersmith & City and Network as part of a national upgrade Woolwich ferries with modern, Metropolitan lines will continue, plan, led and financed by the Home cleaner vessels. We will also complete with upgrades to service depots and Office. The investment grant funding the renewal of major structures, associated infrastructure. We will also goes up in line as expected and as such as Highbury Corner bridge. upgrade the Automatic Train Control published in our Business Plan. (ATC) systems. In 2018/19, we will continue to develop the ATC systems and prepare for a new control centre at Hammersmith, which will control the entire sub-surface network.

14 Financial summary Transport for London Budget 15 Draft Draft

Debt and cash

Total value of debt (£m) Cash balances (£m)

11,666 The totalBorrowing value ma turingof our within debt, 12 mon whichths 4,678 LiquidityCrossrail policy ring-fenced 10,936 10,386 includes borrowing and finance In the last few years, our cash balances 9,799 9,286 leases, must always remain within the have decreased as we have funded capital Long-term borrowing TfL cash balances Authorised Limit for External Debt. The investment across our network. 3,314 affordability of our debt is linked to both recurring annual income and cash Total cash balances are expected to available to pay financing costs. stand at £1,405m by the end of 2018/19. The decrease of £216m during the year is 1,961 By 31 March 2019, our borrowing is driven by delivering the Crossrail project. 1,621 expected to grow by up to £800m, within 1,405 the incremental borrowing limits set out In line with our liquidity policy approved in the March 2017 funding letter from by the Board, we aim to hold a prudent Government. Borrowing will fund capital minimum level of cash for exceptional investment projects, including line and circumstances, as well as to retain a high station upgrades on the Underground credit rating with our investors. This tual oreast udget and rail networks, and new cycling tual oreast udget minimum level of cash is driven by the infrastructure. size of our operating costs and our level ▀ Borrowing ▀ Finance leases ▀ TfL cash balances ▀ Crossrail ring-fenced of debt.

Debt (% of total income)* Financing costs (% of total income)**

2018/19 Budget 2018/19 Budget 2018/19 Budget 175% 7.5% Cash balances (£m) opening cash closing cash movement 167% 6.9% TfL cash balances 1,028 1,167 139 5.9% 6.2% 6.2% 154% Crossrail ring-fenced 593 238 (355) 145% 136% Total cash balances 1,621 1,405 (216) tual oreast udget tual oreast udget Our strong credit ratings reflect the essential nature of our services as This ratio is expected to reach 175 per cent This ratio has increased moderately over Credit ratings by the end of 2018/19, reflecting a gradual rise the past few years. Interest costs and debt London's dominant provider of transport, Moody's Aa3 stable outlook in borrowing (within Government limits) and repayments form part of the balanced budget and the supporting institutional reduction in grant. The ratio should decrease as that we are legally required to set each year. Standard & Poor's AA negative outlook framework. Our negative outlook with income increases. Standard & Poor’s and Fitch reflects the Fitch AA- negative outlook negative outlook for the UK Government. * Debt includes borrowing and finance leases ** Financing costs include interest costs for borrowing and finance leases

16 Debt and cash Transport for London Budget 17 Draft Draft

Approach to forecasting

Year-on-year growth in Year-on-year growth in The forecasts in our Business Plan and We also embed assumptions on changes gross value added (GVA) (%) employment (%) Budget are the best estimate of what to our services into our forecasts,

we expect to happen and are subject to including information on future planned ighest ighest change in line with actual events. As is events, closures or upgrades across the owest owest the case with all businesses, we base network, opening new services, such these forecasts on a range of indicators, as the Elizabeth line, increasing service varage varage some of which are within our control frequency, and policy decisions. and some which are not.

We are required to publish tables for We forecast our costs and revenue to both the Budget and Business Plan. ensure that we are financially sustainable In reality, a range around our point

over the Business Plan period. estimate for net operating surplus is more accurate, reflecting the possible tual oreast tual oreast Passenger revenue forecasts are based outcomes for the economic factors on a number of external variables. underpinning our forecasts. Growth in GVA in London is a measure of Growth in employment in London is defined as the value of all goods and services produced the total number of jobs (skilled and unskilled) External economic forecasts for London’s in London. available in London. growth in GVA, household consumption, We review and revise our forecasts employment and UK inflation are regularly throughout the financial year examples of the factors taken into as part of the financial reporting process. account. We look at a range of forecasts When actual outturn is different from Year-on-year growth in Retail price index (RPI) inflation (%) for the same indicator given the potential forecasts, it is management’s task to consumption (%) for different outcomes. Inflation also adapt and ensure we continue to deliver

affects our costs. what London needs. ighest ighest

owest owest This means there are a range of potential outcomes for passenger numbers, costs, varage varage and revenues. We aim to take a prudent and realistic view of all these variables to make the best forecast based on the information available to us.

tual oreast tual oreast

Growth in consumption in London is the Growth in UK RPI inflation reflects the change in extent to which goods or services are used, cost of retail goods and services across the UK. and reflective of the portion of household income spent (not saved).

▀ Historic actuals and forecast used ▀ Average of external forecast ▀ Range of external forecast

18 Approach to forecasting Transport for London Budget 19 Draft Draft

Financial trends Over five years

Total income (£m) Total cost (£m)

7,147 6,835 6,741 6,763 Other income Net nancing costs 6,546 6,673 6,506 6,722 6,585 6,679 Grants Operating costs Passenger income

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▀ Passenger income in total income ▀ Operating costs in total costs over 2017/18 ▀ Grants 2%▲ ▀ Net financing costs 7%▲ over 2017/18 ▀ Other income Despite the removal of the general grant from Government, total income The increase in operating costs relates to additional services on the has increased, with a £121m rise in passenger income and £150m boost in Elizabeth line, while financing costs have gone up as a result of an other income, largely generated by increases in Elizabeth line services. increase in borrowings to fund our capital investment programme.

Total passenger income (£m) Total capital expenditure (£m)

Streets 3,914 Crossrail 4,774 4,587 4,694 4,653 3,482 3,389 3,453 4,308 Rail Capuital investment Buses 2,573 Elizabeth line London underground

tual oreast udget tual oreast udget

▀ London Underground in total passenger income ▀ Capital investment in total capital expenditure ▀ Elizabeth line 3%▲ over 2017/18 ▀ Crossrail 26%▼ over 2017/18 ▀ Buses The increase in passenger income is driven by the opening of the central Crossrail capital expenditure has reduced significantly as the Rail section of the Elizabeth line and new London Overground services. project nears completion, offsetting an increase of £152m in our ▀ investment programme. ▀ Other operations

20 Financial trends Transport for London Budget 21 Draft Draft

Operational trends

Passenger journeys Passenger journeys (millions) 2018/19 Budget Over five years

total number of journeys in passenger 4,051 4,052 4,002 4,029 3,993 Other anticipated in 2018/19* journeys from 2017/18 4,029m 0.7%▲ Rail London Underground Buses 0% on 2017/18 1,352m Elizabeth line London Underground Elizabeth line* * ▲ on 2017/18 78m 70% tual oreast udget

▀ London Underground ▀ Elizabeth line ▀ Buses ▀ Rail ▀ Other

London Buses Passenger journeys depend on a Rail passenger journeys are expected to variety of economic factors, principally grow by around one per cent in 2018/19. 2,236m 0.4%▼ on 2017/18 employment growth and household The recovery from the to expenditure. A slowdown in these areas Barking line upgrade work in 2017/18, has resulted in a reduction in the forecast combined with the introduction of new growth of passenger journeys across Overground services will outweigh the all modes. movement of passengers away from the Rail (DLR, London Overground, London Trams) Docklands Light Railway (DLR) and onto Passenger journeys on TfL Rail will the Elizabeth line. 340m 0.9%▲ on 2017/18 significantly increase in 2018/19, as it takes over services between Paddington and Bus passenger journeys are expected to Heathrow in May 2018, before the opening fall marginally in 2018/19 as congestion of the central section in December is forecast to increase when major 2018, when it will become known as the roadworks and improvement schemes Other (Emirates Air Line, London River Services, Dial-a-Ride, Santander Cycles) Elizabeth line. start, including the transformation of Oxford Street, Old Street roundabout Continued improvements on London and Highbury Corner. These schemes will 5%▲ on 2017/18 23m Underground will create higher passenger significantly improve the streets in these demand, but this is expected to be offset areas of London. by passengers moving to the central section of the Elizabeth line and using * Excluding road journeys and pedestrians the improved Thameslink service. * * The 78m journeys include TfL Rail journeys prior to the opening of the Elizabeth line in December 2018

22 Operational trends Transport for London Budget 23 Draft Draft

London Underground reliability – excess journey time (EJT)* Streets – killed or seriously injured (KSIs) Over five years (minutes) Reduction against 2005-09 baseline (%)

tual oreast udget tual oreast udget in EJT The 2018/19 Budget shows an improvement in reliability. long-term The police have implemented a new reporting system, which aims 3%▼ from 2017/18 Improvements are planned across all areas of our services, 65%▼ target to to improve injury assessment. This has resulted in an uplift in the including renewing and maintaining key assets and effectively reduce KSIs number of serious injuries and the baseline has been adjusted to managing customer incidents. by 2022 reflect under reporting in the past. Figures for 2017 are provisional MANUAL GRAPH (not editable) and subject to change.

Bus reliability – excess wait time Buses and coaches – KSIs Over five years (minutes) Reduction against 2005-09 baseline (%)

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Following an improvement in operating conditions in 2017/18, long-term KSIs involving a bus or coach are the lowest level since records 1.0 minutes excess wait time is budgeted to be 1.0 minutes in 2018/19. 70%▼ target to began. Further reductions are expected, following the introduction in 2018/19 reduce KSIs of new standards for heavy goods vehicles (HGVs) and new bus by 2022 safety standards. From 2017 onwards collisions involving a bus or * Includes industrial action; 2017/18 excludes the impact of the Grenfell fire coach are reported as a two separate categories.

24 Operational trends Transport for London Budget 25 Draft Draft

Customer focus Our customers and users expect a safe, reliable transport network that offers value for money and uses innovation to make journeys easier. We put customers at the heart of everything we do.

We listen to our customers and are Accessibility and working hard to provide a consistently disabled passengers good public transport experience. We will ensure London continues to have one of the Customer strategy and commitments most accessible transport Our customer commitments are: networks in the world.

Safety Environment The safety of our customers, We will reduce our impact on road users, staff and suppliers is the environment to provide a our top priority. clean and comfortable service.

Help, contact and complaints Sustainability You can contact us in a way that We contribute to a better suits you. We will listen to your quality of life for Londoners, feedback and use it to continue now and in the future. to improve our services. Reinvesting in transport Fares, payments and refunds We reinvest all our income to We promise to give you the best run and improve your services. value ticket for your journey. Our customer Keeping you informed service performance We will provide personalised, We put customers at the real-time information at every heart of everything we do: stage of your journey. every journey matters.

Reliability We will provide a reliable service and work to reduce delays.

We are committed to providing a safe and reliable public transport network

26 Customer focus Transport for London Budget 27 Draft Draft

Safety and security The Hopper fare has already benefited Harnessing technology We will look at how we can do better Safety is a core value in all that we do. millions of Londoners, accounting for We will continue to innovate, with an by keeping our station staff updated, It is integrated into our activities and is around 140 million journeys since its emphasis on providing better journey so they can help people re-plan their at the heart of our decision making and launch in September 2016. In January information for people on the move. journeys. We will also make sure our governance. We are working towards 2018, it became even better value for communication channels show the an ambitious goal of Vision Zero – the money when it was extended to provide In 2017, we launched the TfL Oyster app, latest, most relevant information on elimination of all deaths and serious unlimited trips on buses and trams making it easier for customers to top the disruptions. We will also review the injuries on roads and our public transport within an hour. up their pay as you go credit and buy ways in which we warn customers about networks. Whether it is reducing road . We will extend the app in planned disruptions that occur as a result danger, responding to the terrorist Accessibility 2018 to support contactless payment, of improvement works. threat, or minimising the risk of harm to We will carry on making the transport which is now used for half of all pay as our customers and staff on the public network more accessible so everyone can you go journeys. We will also make it Partnerships with boroughs, transport network, our primary focus is travel safely, easily and spontaneously. more straightforward to collect refunds. businesses and communities always on prevention. We will learn from This includes: We will continue to work with boroughs, any incidents that do happen to improve The TfL TravelBot on Facebook business and local community partners our activities and processes. • Launching the first stage of the Messenger is our first conversational to deliver the Mayor’s Transport Strategy, Elizabeth line in 2018/19, with 10 new bot. Customers can ask it questions, for with a particular focus on increasing We will continue to invest in dedicated step-free stations that open up instance when their next bus will arrive, trips by public transport, walking and transport policing services and safety millions of new, accessible journeys and the bot will respond instantly using cycling, and encouraging the use of new measures to improve personal security. artificial intelligence. We plan to use the technology. Partnerships to develop This includes our ongoing efforts to • Completing our bus driver customer same technology on other platforms, innovation, including electric charging tackle the most harmful offences, such training and making sure all drivers are including the help page of our website. points and flexible app-based bus as sexual offences and hate crime. We supported in managing the wheelchair services, will help tackle congestion and encourage and support victims to report user priority space In 2018, we will explore new ways to improve air quality. issues so that action can be taken against provide personalised travel information, offenders. • Introducing a new ‘turn-up-and-go’ app which is particularly important for Collaborating with other cities for staff across the Tube network, to people with specific travel needs. We We work closely with other urban We continue to develop and implement better manage and track requests for will also explore a new digital mapping transport authorities around the UK a programme of activity to safeguard customer assistance product that makes it easier to display to share experience and knowledge, the most vulnerable people travelling on live data on an interactive Tube map. including through the Urban Transport the network, including children, rough • Reviewing and improving step-free Group and bilateral arrangements. This sleepers, people with mental health signage to help customers find lifts and More than 650 apps are now powered will continue alongside further work issues and other vulnerable adults. This other facilities more easily by our open data. We will continue to internationally to understand and adapt includes training and briefing for our staff support our growing community of more to technological and other changes. so they can spot the signs and provide • Training more of our staff about the than 14,400 developers, who can access Cities around the world are now using support to those who need it. importance of considering accessibility our information for free as part of our our ticketing technology to improve their needs when planning public transport open data strategy. transport networks. Affordability and urban realm improvements An affordable transport network is Keeping customers informed central to the Mayor’s plan. He has frozen • Continuing to review accessibility data Customers tell us the information we TfL fares, and pledged to maintain travel and making it available to developers provide is good, but we sometimes let concessions, until 2020. to encourage apps that help customers them down when services are delayed plan their journeys and travel or disrupted.

28 Customer focus Transport for London Budget 29 Draft Draft

Underground London Underground

Financial summary Direct operating surplus will grow by nine per cent next year, due to forecast growth in passenger income and year-on-year cost containment. The continued focus on our modernisation programme will see a one per cent reduction in our operating cost base as the business more than absorbs inflationary impacts. Budgeted operating surplus is marginally below the Business Plan due to lower passenger income.

London Underground 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income 2,624 2,683 2% Other operating income 39 15 -62%

Total operating income 2,663 2,698 1%

Direct operating cost (2,131) (2,120) -1% Direct operating surplus 532 578 9% Indirect operating cost (392) (406) 4%

Net operating surplus 140 172 23%

Capital renewals (342) (332) -3% New capital investment (726) (788) 9%

Total capital expenditure (1,068) (1,120) 5%

Passenger income is expected to rise Capital expenditure will rise for the marginally, continuing the demand continuing modernisation of the Circle, stabilisation seen in late 2017/18. District, Hammersmith & City and Metropolitan lines, and continued track Operating costs are reducing year on renewals and improvements to station year as a result of our modernisation design and more step-free access. plans. Higher inflationary pressures, business rates, utility costs, and costs to run new services are being offset by reducing non-operational staff and delivering maintenance more efficiently.

Our Tube modernisation programme will significantly increase capacity on the Underground

30 Underground Transport for London Budget 31 Draft Draft

Passenger journey analysis Reliability Over five years London Underground step-free access Scheduled services availability (%) (million kilometres operated) Actual Forecast Budget 2014/15 2015/16 2016/17 2017/18 2018/19 Number of passenger journeys (millions) 1,305 1,349 1,378 1,352 1,352 Average yield per passenger journey (£) 1.85 1.90 1.94 1.94 1.98 Operating cost per journey (£) (2.04) (1.96) (1.82) (1.87) (1.87) In 2017/18, demand for Tube services Reliability dropped from the record high of 2016/17, Along with safety, reliability is the tual oreast udget tual oreast udget reflecting the overall trend experienced bedrock of our service. During the We try to ensure that our customers can use our We expect to operate more kilometres in 2018/19, across the London transport network morning and evening peaks, there are step-free routes. We continually monitor the with the greatest contribution coming from and the South East train operating more than 540 trains serving 270 stations. performance of our accessibility support assets more frequent Jubilee line trains. companies. This year we expect Our organisational model sets out clear and have plans to respond quickly to any issues. passenger journeys to remain flat as accountabilities for these services so This is a relatively new measure, which is why general demand for services stabilises. that we can drive improvements and there is no data before 2017/18. react quickly and effectively to any issues Safety that arise. Safety Customer Providing a safe travelling and working Customer injuries Customer satisfaction score environment is one of our core values. Customer journeys London Underground is one of the safest We are focusing on measures to better 3,904 metros in the world. manage crowding hotspots at stations. 3,746 These include improving signage, 3,671 In 2017/18, we reduced the number of providing open data to app developers 3,628 accidental injuries to our customers, and keeping customers updated so they staff and contractors by improving our can make informed travel choices. 3,394 safety culture, increasing the number of safety tours and influencing customer We are also making the Tube more behaviour. accessible by developing a wheelchair user policy and greater staff training to Crime levels on London Underground better serve customers who need tual oreast udget tual oreast udget remain low. Improved reporting channels more support. and crime records has partly attributed There were fewer customer injuries in 2017/18 The customer satisfaction target of 85 points compared to the previous year. Most injuries is in line with the forecast for excess journey to a rise in reported sexual offences, low- were caused by slips, trips and falls. We are time and predicted service volumes. We aim to level violence and public order offences. working to monitor and mitigate against maintain the current high levels of satisfaction The increase is also broadly in line with these risks, including marketing campaigns to next year. national trends. encourage customer safety.

32 Underground Transport for London Budget 33 Draft Draft

2018/19 priorities

As well as the general upkeep and The future network Two New renewal of our network, a number of In 2018/19, work will continue on the significant projects are under way to Northern line extension and the new stations step-free access enhance our service. transformation of Vauxhall, Nine Elms are being built at Nine Elms will be provided at and Battersea for the Northern five stations and and Battersea. New stations are being line extension work will start at Safety and security built and, with tunnelling work complete, a further 13 In 2018/19, we will continue this focus the extension is expected to open in 2020. by building a more integrated customer safety communications campaign and We are also modernising the Circle, developing targeted plans that focus District, Hammersmith & City and on key risks, including safe track access, Metropolitan lines, with the first section platform train interface, escalators of the new signalling system going live Victoria station and stairs. between Hammersmith and Latimer Road later this year. Capacity on these upgrade Concerted action is under way to lines will increase by 33 per cent when 7,000m tackle low-level violence, which mainly the upgrade is complete in 2023. completed of track renewals occurs at busy commuter times. This will be completed includes travel demand management, We will continue our plans to introduce recurring congestion and behaviour new air-cooled trains on the Piccadilly change initiatives, transport capacity line, with the contract for the new fleet improvements, and policing and being awarded in summer 2018. Coupled crime reduction activities. We remain with a new automatic signalling system, Contract will be awarded committed to tackling the most harmful capacity on this line will be increased by to deliver more than offences, such as sexual offences and 60 per cent from 2026. 33% extra capacity on the Circle, hate crime, and protecting customers 100 District, Hammersmith & City and who are or feel most vulnerable. Reducing our energy and new air-cooled Piccadilly line trains Metropolitan lines in 2023 when carbon footprint upgrade is complete, supported by Station and accessibility improvements London Underground is one of the new signalling system We will provide new step-free access at largest users of electricity in the UK. We Finsbury Park, Buckhurst Hill, Newbury will introduce more schemes to harness Park, South Woodford and Victoria wasted heat, use our land and assets for stations in 2018/19 and start work at a low carbon energy generation and look at further 13. We are also looking at other energy storage technology to encourage accessibility initiatives, such as tactile the growth of electrified transport. paving at critical locations and better customer information.

34 Underground Transport for London Budget 35 Draft Draft

Elizabeth line

Financial summary As we move towards a fully operational railway, we will open part of the Elizabeth line in December 2018. This will redefine how people move around the Capital, adding 10 per cent to London’s rail capacity once fully completed.

Elizabeth line 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income 85 146 72% Other operating income 4 125 3025%

Total operating income 89 271 204%

Direct operating cost (120) (379) 216% Direct operating deficit (31) (108) 248% Indirect operating cost (26) (25) -4%

Net operating deficit (57) (133) 133%

New capital investment (377) (316) -16% Crossrail construction costs (1,496) (435) -71%

Total capital expenditure (1,873) (751) -60%

Passenger income will rise by £61m Operating costs are £259m higher, with compared to 2017/18 as new services start the introduction of access charges, during the year. There is a three which are offset by other income. There per cent decrease against the Business will also be increased costs for trains, Plan, owing to lower than expected operations, and maintenance for the growth on existing TfL Rail services planned phased opening. operating between Liverpool Street and Shenfield. Other income will increase Capital expenditure for trains and mainly due to access charges when the depots will decrease after this year. central section opens. Construction costs will decrease ahead of the opening of the central section.

The Elizabeth line will increase London’s rail capacity by 10 per cent

36 Elizabeth line Transport for London Budget 37 Draft Draft

Passenger journey analysis 2018/19 priorities Phased opening of the Elizabeth line Over five years The opening of the Elizabeth line is the Actual Forecast Budget largest milestone in our Budget. TfL Rail services begin between Paddington 2014/15 2015/16 2016/17 2017/18 2018/19 Improving connectivity MAY and Heathrow Once fully operational, the Elizabeth Terminals 2, 3 and 4, Number of passenger journeys (millions) - 39 48 46 78 2018 line will serve 41 stations and stretch replacing the existing Average yield per passenger journey (£) - 1.81 1.73 1.85 1.87 more than 60 miles from Reading and Heathrow Connect service and part of the Operating cost per journey (£) - (2.86) (2.72) (3.17) (5.19) Heathrow in the west through tunnels in Great Western inner central London to Shenfield and Abbey suburban service Wood in the east. It will increase rail Passenger journeys rise in line with new The cost per journey increases in 2018/19 capacity in central London by 10 per cent services starting during the year. This also because of the growth in services and, in and provide a safe, reliable, accessible drives an increase in average fare income particular, owing to the introduction of public transport option for more than Elizabeth line per journey. central section access charges. 200 million passenger journeys each year. services start on DEC the central section Customer experience between Paddington The Elizabeth line will set a new 2018 and Abbey Wood. standard for customers. The 200-metre TfL Rail services Public performance measure Customer trains are energy-efficient and accessible, between Paddington Moving annual average (%) Customer satisfaction score (%) and have walk-through, air-cooled and Heathrow, and Liverpool Street carriages providing live travel information and Shenfield, also liabeth and free WiFi. become known as the Elizabeth line The new line will dramatically reduce journey times across central London. The current fastest route from Paddington to Bond Street is by Tube, and takes between 10 and 15 minutes. The route does not currently have step- free access and involves changing trains at Baker Street or Gate. On tual oreast udget tual oreast udget the Elizabeth line, that same journey will Plans are in place to improve performance, We expect to maintain our customer satisfaction be fully accessible and take less than including transitioning from TfL Rail services to scores this year, with improvements likely once five minutes. the Elizabeth line in December 2018. the Elizabeth line is fully operational in 2019.

38 Elizabeth line Transport for London Budget 39 Draft Draft

Buses London Buses

Financial summary We have reduced the net operating deficit in 2018/19 compared to 2017/18 by making savings to offset inflation so that we can keep operating costs broadly the same. We will ensure our bus services continue to meet the changing demands in London.

Buses 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income 1,456 1,479 2% Other operating income 12 9 -25%

Total operating income 1,468 1,488 1%

Direct operating cost (2,106) (2,105) 0% Direct operating deficit (638) (617) -3% Indirect operating cost (42) (51) 21%

Net operating deficit (680) (668) -2%

Capital renewals (8) (9) 13% New capital investment (30) (42) 40%

Total capital expenditure (38) (51) 34%

We have improved reliability and journey New capital investment increases in times, which have helped stabilise 2018/19 as a result of the increased roll passenger numbers, compared to the out of enhanced catalytic converters, declines of the past three years. As which reduce the emissions of buses so passengers switch to the convenience of they meet the Euro VI standard. pay as you go and contactless payments, passenger income per journey has increased slightly, driving an overall increase in passenger income.

We continue to adapt our buses to meet the changing demands of the Capital

40 Buses Transport for London Budget 41 Draft Draft

Passenger journey analysis Reliability Over five years Average bus speed (mph) Service volume (million km operated)

Actual Forecast Budget

2014/15 2015/16 2016/17 2017/18 2018/19 Number of passenger journeys (millions) 2,385 2,314 2,262 2,245 2,236

Average yield per passenger journey (£) 0.64 0.66 0.65 0.65 0.66 Operating cost per journey (£) (0.88) (0.92) (0.94) (0.96) (0.96) Bus services are now more reliable than We are looking to minimise overlapping tual oreast udget tual oreast udget they have ever been, and bus speeds, services, with interchange supported While the long-term fall in bus speeds was Our 2017/18 forecast and 2018/19 Budget values which suffered significant decline, by the introduction of the Hopper fare, stemmed in 2017/18, a number of potentially reflect recent and forthcoming reductions in have now stabilised and are improving, which will improve environments. The disruptive roadworks in 2018/19, including Oxford the level of scheduled service, particularly in reversing a long-term trend. We have biggest example of this is Oxford Street, Street transformation, Old Street roundabout the central area. introduced more than 120 bus priority where we will remove bus services and Highbury Corner, are predicted to adversely schemes and reviewed traffic light altogether, subject to consultation. affect speeds in the central area. timings and other measures to keep the bus service moving. This means that Removing excess bus capacity not only buses that were added into the schedules improves the environment, it reduces Safety Customer to compensate for poor reliability are no congestion, improves safety and avoids KSI on or by a bus or coach – reduction Customer satisfaction score longer needed. wasted money. This approach has against 2005-09 baseline (%) enabled us to hold the operating costs of Customers are responding to these the bus network flat. improvements and there is now a stable number of passengers using bus services. The total number of bus kilometres The way in which people use the operated will reduce over the next transport network, particularly in central two years. However, there are areas, London, is changing. Improvements to particularly in outer London, where the Tube and the introduction of the demand is growing or is likely to grow Elizabeth line, together with more people alongside new housing and job growth. walking and cycling, have enabled bus For example, we are reviewing services services to be restructured. This will in Thamesmead, Lower Lee Valley, maintain bus reliability in central London Barking Riverside, Wandsworth Riverside, tual oreast udget tual oreast udget and other town centres, and also ensure Hillingdon and Colindale. In some cases, The number of people killed or seriously Overall satisfaction with bus services is a high quality public realm, in line with new, enhanced or altered services can injured in or by a London bus or coach is forecast currently one point above target for 2017/18 (86 the Healthy Streets Approach. be implemented ahead of housing to fall. Further substantial reductions are points). This is mainly because of good reliability development, and will sometimes need expected in future years, with the introduction in Q1 and Q3 of this financial year. We expect the to respond to observed increases of new bus safety standards and road danger current trend to continue. in demand. reduction initiatives.

42 Buses Transport for London Budget 43 Draft Draft

2018/19 priorities

Safety and security people travelling on the network Across London, 95 per cent of our bus hours of bus Customer safety continues to be our including children, rough sleepers and stops are accessible to wheelchair users. journey time top priority and we are developing a new other vulnerable adults. We are looking at opportunities to benefits, per safety standard for buses that looks extend wheelchair bays beyond the legal 14.9 peak, across all bus priority at how technology can prevent and Bus priority minimum length where seating layouts scheme routes reduce the severity of injuries on the Bus priority investment will provide allow, and without adversely affecting bus network. This includes Intelligent the infrastructure for a reliable public other passengers who may not be able Speed Assistance, which ensures buses transport network that supports the to stand. do not exceed the legal speed limit. We growing city. It will improve journey More than have already rolled this out on some new times through targeting the main causes Air pollution buses entering the fleet. of slower speeds. We will improve By 2020, we will make sure the entire bus cumulative bus journey times across all fleet at least meets the Euro VI engine 1,000 Other new approaches we are trialling bus priority scheme routes by 14.9 hours emission standard. This will be primarily diesel and hybrid include autonomous emergency braking in the morning, inter-peak and evening achieved through retrofitting enhanced buses will be systems, which enables a vehicle to peak periods. These priority schemes will Selective Catalytic Reductions systems retrofitted with detect its surroundings and automatically support the Low Emission Bus Zones, to more than 4,000 vehicles. In 2018/19, enhanced catalytic apply the brakes; features that alert which use our cleanest buses to reduce more than 1,000 diesel vehicles will converters in 2018/19 to meet the Euro VI pedestrians and other road users to air pollution, Central London Bus Grid be retrofitted with Selective Catalytic emissions standard the presence of buses; and improving and Healthy Streets portfolio plans. Converters, with over half the diesel bus driver’s visibility, including mirror design. fleet compliant by the end of 2018/19. This We expect this work to contribute Customer experience will ensure all buses in central London significantly to achieving Vision Action such as Hello London – our meet ULEZ standards and support our Zero – our commitment to ensuring London-wide bus driver training scheme further Low Emission Bus Zones, as part that no one is killed or seriously injured – will have rolled out across the Capital of the total 12 promised by the Mayor. 12 on our services by 2041. The new bus by spring 2018. More than 21,000 of our Low Emission Bus safety standard will incorporate the most 24,500 drivers have been trained so far, The next Low Emission Bus Zones Zones will be effective counter measures that we trial with 95 per cent rating the course as will be introduced in some of the worst introduced across London to tackle some and will be written into our bus operator excellent or very good. Hello London pollution hotspots, starting with the of the worst pollution contracts from the end of 2018. champions have also been appointed A12 Eastern Avenue to Homerton Road hotspots at operator garages to spread the and Lewisham to Catford by spring 2018. We will continue to fund and work benefits of the programme. We have We are also continuing to introduce in partnership with the Metropolitan also developed a condensed version of more zero-emission buses, including Police Service (MPS) Roads and Transport the course to support front-line staff pure electric and hydrogen fuel-cells. Policing Command to reduce crime and and encourage a shared approach to As battery technology gives us greater Crime on the bus antisocial behaviour. In particular, we customer service. operating range, these vehicles will be network has more will continue our important work to rolled out more widely to our than halved in the tackle hate crime and sexual offences We also continue to look for bus network. past 10 years on the bus network. We will continue to opportunities to use technology to raise develop and implement a programme of customer satisfaction, such as installing activity to safeguard the most vulnerable WiFi at suitable bus stations.

44 Buses Transport for London Budget 45 Draft Draft

Rail Docklands Light Railway, London Overground and London Trams

Financial summary Increased services and further reliability improvements on London Overground is expected to lead to an increase in operating costs in 2018/19 compared to 2017/18. Over time, the enhanced services will further boost passenger numbers, but in the short term this creates a higher net operating deficit.

Rail 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income 427 434 2% Other operating income 8 14 75%

Total operating income 435 448 3%

Direct operating cost (428) (482) 13% Direct operating surplus/(deficit) 7 (34) -586% Indirect operating cost (24) (24) 0%

Net operating deficit (17) (58) 241%

Capital renewals (31) (43) 39% New capital investment (81) (35) -57%

Total capital expenditure (112) (78) -30%

Income increases in 2018/19, owing to the New capital investment was higher introduction of enhanced services on the in 2017/18 primarily because of the London Overground and the Gospel Oak electrification of the Gospel Oak to to Barking line closures that took place Barking line. in 2017/18.

The more frequent London Overground service provided by new trains and reliability improvements will increase operating costs in 2018/19. There were also a number of one-off contractual savings in 2017/18, which do not recur in 2018/19. The reliability of the DLR is reflected in our high customer satisfaction scores

46 Rail Transport for London Budget 47 Draft Draft

Passenger journey analysis Reliability Over five years DLR and London Trams scheduled London Overground public performance services operation (%) measure moving annual average (%) Actual Forecast Budget ondon ras 2014/15 2015/16 2016/17 2017/18 2018/19 London Overground Number of passenger journeys (millions) 140 183 189 187 190 Average yield per passenger journey (£) 1.14 1.18 1.17 1.23 1.25 Operating cost per journey (£) (1.62) (1.59) (1.51) (1.46) (1.69) DLR Number of passenger journeys (millions) 110 117 122 121 120 tual oreast udget tual oreast udget Average yield per passenger journey (£) 1.33 1.35 1.36 1.41 1.42 ▀ DLR ▀ London Trams ▀ London Overground Operating cost per journey (£) (1.13) (1.14) (1.03) (1.13) (1.17) The DLR continues to maintain a high level of Reliability remains stable, though it is reliability while passenger numbers are broadly susceptible to issues impacting ’s London Trams stable. Reliability on London Trams is improving, infrastructure. We will continue to work closely Number of passenger journeys (millions) 31 27 30 29 30 with additional safety initiatives implemented with Network Rail and other train operators on following the tragic overturning at Sandilands. ways to improve reliability for our customers. Average yield per passenger journey (£) 0.81 0.85 0.86 0.85 0.83 Operating cost per journey (£) (1.00) (1.39) (1.31) (1.23) (1.22) Safety Customer Customer injuries Customer satisfaction score (%)

Since 2014/15, passenger journeys on We expect journey growth to resume London Overground and the DLR on the Overground next year, although ras have risen significantly owing to the increases on the DLR will be offset by introduction of five-car trains on the passengers transferring to the Elizabeth Overground and robust economic line when the central section opens in growth. In 2017/18 demand has dipped due December 2018. Overall, this growth to a wider economic slowdown, though in journeys contributes to a year-on- Overground and DLR journeys have year increase of around two per cent in performed better than wider rail demand passenger income. in London and the South East. The number of passenger journeys on tual oreast udget tual oreast udget London Trams is expected to reach 30m Changes to the rail network, such as the launch ▀ DLR ▀ Trams ▀ London Overground in 2018/19. of the Night Overground, may temper the impact of safety initiatives and improvement We expect to broadly maintain our high scores. plans, but we still expect a one per cent improvement year on year.

48 Rail Transport for London Budget 49 Draft Draft

2018/19 priorities Construction of the Safety and security improving rail security in conjunction Docklands Light Railway Vision Zero means we are committed with our operators to ensure that we are The Custom House capacity to eradicating the number of people ready to meet the legal requirements enhancement project will be completed killed or seriously injured on our stipulated by the National Railways in time for Elizabeth line services 4.5km services by 2041. To achieve this we Security Programme from April 2018. beginning in December 2018. This will Barking Riverside will reduce casualties by 20 per cent by provide an improved interchange with the extension starts 2022/23, compared to the 2014/15-2017/18 Service improvements new Elizabeth line station and support in 2018 baseline. In 2018/19, we will be working London Overground developments around the network. on measures to reduce the platform- We are continuing works at key stations train interface risk on the DLR. We will to increase capacity, relieve congestion Design and development continues on also roll-out technology to prevent and improve accessibility. This includes a a number of workstreams associated doors opening incorrectly on London full upgrade of White Hart Lane station with the rolling stock replacement new air-conditioned DLR Overground trains and interventions to to service Tottenham Hotspur FC’s new programme. We will buy 43 new walk- 43 trains by early 2020s reduce the number of signals passed at stadium and support the regeneration through trains to replace stock that is danger. We will also make some minor of the local area. The new station will nearing the end of its design life and infrastructure improvements to improve include step-free access and a relocated increase capacity across the network. safety at the three London Overground entrance, and an underpass will be The new trains will start to enter service stations with the highest number of created through the existing railway from 2022. This year’s activities include customer injuries. embankment. Key works this year include purchasing rolling stock and developing relocating existing overhead power lines, depot design. The Rail Accident Investigation Branch tunnelling the existing viaduct for station (RAIB) published its report into the tragic operations and constructing the new London Trams Sandilands incident in December 2017. In station building. Construction of the Work continues on the projects set January 2018, we published the results of station is due to be completed by May out in the Trams for Growth upgrade an independent study undertaken on our 2019, at which point the old station will strategy, which will improve capacity and behalf alongside the investigations of the be demolished. reliability on the network and support 28km RAIB, Office of Rail and Road (ORR) and significant future growth in Croydon and of track on the the British Transport Police (BTP). Both We are building a new 4.5km London South London. In 2018/19, this will include London Trams network reports reach similar conclusions and Overground extension that will connect operational improvements at East each report has recommendations for Barking station with Barking Riverside – Croydon tram stop and work to create a us, FirstGroup (which operates the tram an area with the potential for 10,800 new second platform and double-tracking at network for TfL), and in the case of the homes. Early works have started and Elmers End. RAIB report, the wider tram industry. We services are planned to begin in 2021. will address all recommendations from We are also developing plans for a these investigations. Electrification of the London Overground Sutton extension scheme for a potential 112 Gospel Oak to Barking line has been future Transport and Works Act Order Our rail network remains one of the completed and new, four-car electric application to be made within the current safest ways to travel in London and we trains will be introduced this year. This Mayoral term. This will be subject to will continue to work with the BTP to will provide additional capacity and funding being available. London Overground stations ensure it remains this way. We are also contribute to our commitment to tackle taking a comprehensive approach to poor air quality in London.

50 Rail Transport for London Budget 51 Draft Draft

Streets Transport for London Road Network (TLRN)

Financial summary Investment in Healthy Streets has increased, although the lack of a funding source for roads means we have had to pause proactive capital renewals.

Streets 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income - - Other operating income 311 323 4%

Total operating income 311 323 4%

Direct operating cost (509) (509) 0% Direct operating deficit (198) (186) -6% Indirect operating cost (92) (88) -4%

Net operating deficit (290) (274) -6%

Capital renewals (100) (28) -72% New capital investment (92) (141) 53%

Total capital expenditure (192) (169) -12%

Operating income is budgeted to increase Until a new funding source is found, we by four per cent, primarily due to £11m have paused proactive capital renewals in third party project funding. Operating on the road network, although we will costs will remain flat in 2018/19, with ensure safety is maintained. savings in staff costs being invested in borough projects, such as Mini-Hollands. New capital investment in Healthy Streets projects will increase in 2018/19, The net operating deficit will reduce by including the transformation of Oxford £16m to £274m. Unlike all other English Street and further progress on cycling cities, London receives no Government schemes, such as Cycle Superhighways. funding for its roads to cover this deficit.

We are investing in walking and cycling, in line with the Mayor's Healthy Streets Approach

52 Streets Transport for London Budget 53 Draft Draft

Volume analysis Healthy Streets Reliability Over five years Cycling growth in Congestion TLRN resolution time Charge zone (%) (disruption hours per event) Actual Forecast Budget

2014/15 2015/16 2016/17 2017/18 2018/19 Congestion Charge volumes (millions) 17.6 17.1 16.6 15.3 14.3 Congestion Charge and enforcement 257 258 250 230 228 income (£m) Average Congestion Charge including 14.62 15.12 15.03 15.04 15.99 enforcement income (£m) Other enforcement income (£m) 84 66 77 78 83 tual oreast udget tual oreast udget

Congestion Charging and enforcement By the end of 2018/19, levels of cycling are Levels of cycling are forecast to increase by 14 Planned infrastructure work in central London per cent against the 2014/15 baseline, reflecting during 2018/19 and 2019/20, including Baker Street, income is on a downward trajectory. forecast to increase by 14 per cent against its increased popularity, population growth and and Oxford Street, will have the This reflects a decline in the number the 2014 baseline. This reflects the aim of our continued investment in cycling. same levels of impact as 2015/16 and 2016/17. of chargeable vehicles entering the cycling contributing to 1.5 million journey Congestion Charge zone, although the stages by 2026 and is based on trends in number of non-chargeable vehicles has cycling growth within central London. Safety Customer continued to increase due to the growth KSI – reduction against 2005-09 TLRN user satisfaction score* in Private Hire Vehicles. baseline (%) The overall number of Penalty Charge ll road users Notices (PCN) issued for Congestion edestrians and ylists Charge continues to fall, partly because more people are using autopay. However, the number of persistent evaders continues to grow. This was one of the factors behind the increase in the PCN, implemented in January 2018, the full year-effect of which in 2018/19 means that overall income is held relatively stable. tual oreast udget tual oreast udget

Further substantial reductions are expected ▀ Pedestrians and cyclists ▀ All road users in future years, with the introduction of new Direct Vision Standards for HGVs and future road Results have been fairly consistent. A small dip danger reduction initiatives. is expected in 2018/19 and 2019/20 with major infrastructure projects causing disruption.

* survey recalibrated in 2016/17 so historic data is not on like-for-like basis

54 Streets Transport for London Budget 55 Draft Draft

2018/19 priorities

Safety our borough partners. This includes include improvements to Rotherhithe through the year, with longer-term The draft Mayor's Transport Strategy improving safety; increasing walking, roundabout and Lower Road gyratory. plans for the stretch between Orchard makes a commitment to a Vision Zero cycling and public transport use; and The CS9 route from Kensington Street and Marble Arch. approach, eliminating road deaths and creating pleasant environments. Olympia to Brentford will include serious injuries in London. Vision Zero safety improvements to Kew Bridge • Waterloo: We are working with the includes a number of programmes In 2018/19, we will start the first tranche junction. Finally, CS10 addresses the gap London Borough of Lambeth to create designed to reduce road dangers, of the Liveable Neighbourhoods of cycling facilities in west London and a peninsula at the IMAX that will including Safer Junctions. We will programme. Seven schemes have been we are looking into the feasibility of a support growth and enhance the local complete investigations into 19 junctions awarded funding to transform the way route along Bayswater Road, Notting area by improving pedestrian crossings by 2018/19 and develop designs for local streets work to enable people Hill Gate, Avenue and and cycle links and upgrading the bus improving these junctions over the to walk, cycle or take public transport Wood Lane before connecting into the station. Design work will continue next year. more and use private cars less. Proposals proposals along the A40 to Acton. during 2018/19, with construction include new segregated cycle routes starting in 2020 We also have a Pedestrian Town Centre serving Crouch End, removing the • Borough Cycling Programme: programme, which brings road safety Greenwich Town Centre gyratory and By the end of 2018/19, we will develop • Brent Cross: Regeneration will start measures to two pilot locations: improving Romford town centre by 45km of signed Central London Grid in summer 2018, in partnership with Peckham and Tooting town centres. The making the busy ring road easier to cross routes, 25km of Quietway routes and the London Borough of Barnet and programme aims to reduce the risk of on foot and by bike. launch several Mini-Hollands flagship Highways England. Improvements pedestrian casualties, increase walking schemes, including Kington’s station in the first phase, funded by the and improve people’s overall experience More than 25 Healthy Streets local plaza and cycle hub scheme developer, include two new bridges of the areas. We hope to consult on schemes will begin, including road safety over the A406 for pedestrians, cyclists these proposals in late 2018 and create improvements at Clifton’s roundabout, • Oxford Street transformation: and public transport users and a new detailed designs in 2019. cycling and air quality improvements at Our programme includes finalising world-class bus station St Thomas Street, and installing a green proposals for Oxford Street West Our police partners play an important man signal at Bromley Common junction (Selfridges to Oxford Circus) by • Old Street roundabout: We will role in achieving the Mayor’s Vision with Mason Hill on the A21 to make it summer 2018, and improving the create a new peninsula to replace Zero and Healthy Streets aspirations. safer for children to cross. wider district by completing new the roundabout at Old Street, with Alongside the specialist Roads and pedestrian crossings at six junctions work starting in 2018/19. Plans include Transport Policing Command (RTPC), the Street enhancements on Wigmore Street – part of 25 new introducing two-way traffic, enhancing wider MPS and local policing teams, we • Cycle Superhighways: Construction crossings in the area – by May 2018. the local environment and providing have an enhanced programme of policing work has started on phase 2 of the Consultation responses show that pedestrians crossings to improve and enforcement activities to target North-South Cycle Superhighway, cycling improvements are a key access to new station entrances the drivers and vehicles that pose the which will be completed in summer objective, so we will set out proposals greatest risk on our roads and improve 2018. We intend to start work on CS11, for this later this year. Subject to a final • Stratford town centre: We are working the safety of local neighbourhoods. which will run from decision, work could begin in summer with the London Borough of Newham through to the West End where it will 2018, creating a new traffic-free area to transform Stratford town centre. We Healthy Streets link with the planned Central London by December 2018 to coincide with the will replace the gyratory with two-way Set out in the Mayor’s Transport Strategy, Cycling Grid, later this year. We are new Elizabeth line services. We are also traffic, provide better cycling facilities the Healthy Streets Approach aims to also developing Cycle Superhighway looking at options for the eastern side and improve bus accessibility. All works create far-reaching improvements on routes 4, 9 and 10. Running from between Oxford Circus and Tottenham are due to be completed in spring 2019 London’s roads in collaboration with Tower Bridge to Greenwich, CS4 will Court Road and will develop proposals

56 Streets Transport for London Budget 57 Draft Draft

Road management the boroughs on local schemes, including including bus stations and stops, river We will continue our annual review of Low Emission Neighbourhoods and a piers, carriageways, footways, traffic timings at traffic lights to give priority, further round of Neighbourhoods of signals, bridges, tunnels, street lighting, More than 25 where possible, to people choosing the Future. drainage and trees in a state of good Healthy Streets schemes will start in 2018/19 sustainable modes, contributing to the repair. Our current income sources Mayor’s strategy for Healthy Streets. Silvertown Tunnel do not cover the cost of operating, We will also focus on roadworks sites, The Secretary of State’s decision on maintaining and renewing the road to ensure works promoters adhere to the consents for the Silvertown Tunnel network. This means we will pause the conditions of their permits and that is expected in May 2018. Subject to a proactive capital renewals for two years, any temporary arrangements consider positive decision, we will begin work which will lead to a decline in asset the safety and needs of pedestrians, on a new road tunnel under the River condition. It is essential that we find a cyclists and bus passengers. Working Thames, linking the Greenwich Peninsula long-term source for funding roads. with logistics companies and roadworks and Royal Docks in 2019. This will improve Investigations at promoters, we will continue to seek ways the reliability of the Blackwall Tunnel Structures and Tunnels of reducing the number of HGVs using crossing, increase the resilience of the Investment Programme our roads, for example by sharing loading road network in east London, support In 2018/19, we will complete the complex and holding facilities. growth and enhance opportunities bridge replacement works at Highbury 19 for new cross-river bus links. The new Corner and fully open Power Road locations for safer junctions Air quality crossing could be open and available for to traffic. We will also continue the will be completed in 2018/19 We will be creating the systems and use in 2023. phased demolition and replacement infrastructure that will enable the of the road-over-rail bridge at Ardleigh ULEZ to be introduced earlier in central Rotherhithe to Canary Wharf Green. Additionaly, we will complete London from 8 April 2019. This is an area We are developing proposals for a new investigations on Rotherhithe Tunnel, Construction work has started on across central London that will require river crossing between Rotherhithe and Blackwall Tunnel (Southbound), The phase 2 of the North-South motorcycles, cars, vans, minibuses, Canary Wharf, with a second public Westway, Vauxhall Bridge and Lambeth buses, coaches and HGVs to meet consultation planned for later this Bridge. The information will be used minimum emissions standards, or pay a year. A Transport and Works Order to produce a prioritised programme of Cycle charge to travel. The ULEZ is expected to application for the powers to build future major bridge and tunnel work. cut road transport emissions in central and operate the new crossing will be Superhighway London by up to 20 per cent and reduce submitted in 2019. Subject to gaining the High Speed 2 which will be completed in 2018 the number of Londoners living in areas necessary consents, this would provide In 2018, remodelling work started at exceeding the nitrogen dioxide (NO2) a safe, attractive, and direct route for Euston station to accommodate the limits by more than 100,000. pedestrians and cyclists, reducing journey new High Speed 2 (HS2) services from times, encouraging healthier travel and 2026. This includes asset improvements, We will also be working on plans to supporting growth. funded by HS2, such as an enlarged ticket expand the ULEZ to the North/South hall at Euston Tube station, improved Circular roads and a London-wide Euro VI Asset Capital Programme passenger links and an underground standard for buses, coaches and lorries Our investment in maintenance and link to Euston Square. There will also be in the light of consultation responses. renewals aims to ensure network safety a new bus station, taxi facilities, cycle We are also working with the GLA and and keep all street and non-rail assets, parking and improved pedestrian links.

58 Streets Transport for London Budget 59 Draft Draft

Other operations Emirates Air Line, London Dial-a-Ride, Victoria Coach Station, London River Services, Taxi and Private Hire, Santander Cycles and others

Financial summary As well as the operations named above, we include the costs of the project team together with certain group items in this category.

Other 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Passenger income 61 33 -46% Other operating income 118 140 19%

Total operating income 179 173 -3%

Direct operating cost (223) (253) 13% Direct operating deficit (44) (80) 82% Indirect operating cost (36) (31) -14%

Net operating deficit (80) (111) 39%

Capital renewals (62) (83) 34% New capital investment (54) (186) 244%

Total capital expenditure (116) (269) 132%

Operating income and operating costs by increased income owing to higher both increase from 2017/18, driven by the demand and yield. cost of Taxi and Private Hire (TPH), ULEZ, taxi delicencing and zero emission cabs. On London River Services, in 2018/19, we expect to see operating costs increase New Emirates Air Line services, such as by four per cent as a result of one-off hospitality, tours and venue hire, account costs ahead of the new Woolwich Ferries for a forecast increase in revenue. starting service in late 2018.

Santander Cycles operating costs On Crossrail 2, forecast costs for 2018/19 continue to rise following the are £35m. Development activity is introduction of the new operating jointly funded with the Department for Dial-a-Ride provides a fully accessible, model, but in 2018/19 this will be offset Transport (DfT). step-free service for older and disabled people

60 Other operations Transport for London Budget 61 Draft Draft

Volume analysis Reliability Santander Cycles – number of casual Over five years Dial-a-Ride trip requests scheduled (%) hires (millions)

Actual Forecast Budget 2014/15 2015/16 2016/17 2017/18 2018/19

Emirates Air Line Number of passenger journeys (millions) 1.5 1.5 1.5 1.4 1.6

Average yield per passenger journey (£) 3.89 3.97 4.14 4.31 4.82 Operating cost per journey* (£) (1.75) (2.31) (2.90) (2.63) (2.34)

Santander Cycles tual oreast udget tual oreast udget Number of cycle hires (millions) 10 10 11 10 11 Average income per hire (£) 1.13 1.13 1.09 1.16 1.15 The percentage of services operated is expected This continues to be a popular form of transport to improve next year. Improvements to – we expect a rise in hires in the future as a Operating cost per hire (£) (2.63) (3.07) (2.33) (2.41) (2.48) scheduling efficiency have meant Dial-a-Ride has result of population growth and our continued met the 89 per cent target since November 2017, investment in cycling. London River Services and that is expected to continue. Number of passenger journeys (millions) 10 10 11 10 10 Average yield per passenger journey (£) 0.24 0.18 0.25 0.28 0.27 Safety Customer Operating cost per journey (£) (1.58) (1.33) (1.17) (1.29) (1.27) Customer injuries* Santander Cycles and Emirates Air Line customer satisfaction score * Costs of Emirates Air Line are shown net of sponsorship income yle hire The expected increase in passenger On London River Services passenger volumes on the Emirates Air Line is partly journeys have declined, with a total of because of a new retail village at the O2. 10 million forecast for 2017/18, six per cent lower than the previous year. This Santander Cycles continues to be decrease has been driven by a drop popular. The income per hire has in river tours. Passenger numbers are remained steady, while operating costs forecast to rise to 10.3m in 2018/19. have risen as new cycles and docking stations have been introduced. tual oreast udget tual oreast udget

There has been an overall improvement in safety ▀ Emirates Air Line ▀ Santander Cycles on the network and we expect to continue this progress next year, in line with overall road Scores for Emirates Air Line and Santander safety targets for road-based operations. Cycles are expected to remain in line with recent years.

* Victoria Coach Station and Dial-a-Ride

62 Other operations Transport for London Budget 63 Draft Draft

2018/19 priorities

Safety Accessibility New infrastructure and assets Two new Our work to drive up standards of Dial-a-Ride continues to provide a fully We will introduce two new hybrid vessels the TPH industry through licensing accessible, step-free transport service for for the Woolwich Ferry in winter 2018/19 and regulatory action and rigorous older and disabled people who are less to replace the current fleet. A new, high- Woolwich Ferry vessels, which will meet London's low enforcement continues. We have able to use other services. To improve tech docking system will be introduced. emissions standards and provide better significantly increased our enforcement our service, we are buying 90 more fuel The new ferries will be more reliable and access for cyclists capability with the employment of 250 efficient and cleaner vehicles, which comfortable for customers. They will additional TPH Compliance Officers will be ULEZ compliant, for delivery in also produce fewer emissions. We will in 2017/18. early 2019. Dial-a-Ride will also work with also be installing new roofing over the two London boroughs to trial assisted platforms at Victoria Coach Station. We are working closely with the MPS transport allowances, potentially offering and the City of London Police to tackle customers greater choice and flexibility Ticketing app TPH journey-related sexual offences when arranging their journeys. Our first ticketing app was introduced in and improve victim confidence to report 2017, giving customers a convenient way issues so that action can be taken. Santander Cycles to check their pay as you go balances Introduction of ULEZ in April 2019 In 2018/19, we will increase our joint and ticket expiry dates. The app can also The introduction of a new bike with to reduce emissions by up to working with the Driver and Vehicle improved manoeuvrability, smaller be used to buy pay as you go credit and Standards Agency to crack down on wheels, a lower frame, new gear hub Travelcards. Further updates will alert unsafe TPH vehicles. We continue to and a more comfortable saddle has customers using contactless cards about lobby Government for more effective proved very popular, with increased account changes, such as refunds. 20% regulatory and enforcement powers, hires-per-bike numbers recorded on such as greater controls on cross border the new model. Thousands more will Future schemes hiring, powers to issue fixed penalty be added to the fleet across the current Our focus remains on the Mayor’s notices for common TPH offences, and Business Plan. We will also integrate the Transport Strategy and, as part of this, to regulate pedicabs in the Capital. scheme more with our other services and we are carrying out feasibility and scope improve efficiency. In February 2018, the studies in 2018/19 for a Bakerloo Line ULEZ scheme expanded to Brixton with seven Extension, Sutton Tram Extension and London’s low emission zone will new docking stations and 200 new bikes. Roads Strategy. have tougher standards for lorries, coaches and buses from 2020 and our Taxi and Private Hire Crossrail 2 150 capital programme will establish the We are supporting the take up of zero We have commissioned an Independent TPH rapid charging infrastructure needed for this. To support emission taxis – the only type that Affordability Review, jointly with the DfT, points to be installed the ULEZ, we are working with the can now be licensed – through grant to examine ways of making Crossrail 2 across London, 90 will be taxi dedicated boroughs and London councils to install funding towards purchase, payment for more affordable. Following the outcome at least 900 on-street residential electric delicensing older, more polluting taxis of the review and subject to a positive vehicle charging points in 2018/19, and we earlier and providing taxi-dedicated rapid decision by the Government on our are also assisting with charge points for charge points. By the end of 2018, we will updated business case, we will seek car clubs that run electric vehicles. have installed 150 rapid charge points to move the project forward to the across London, of which 90 will be next stage, with further formal public taxi dedicated. consultation on our latest proposals and preparations for a Hybrid Bill.

64 Other operations Transport for London Budget 65 Draft Draft

Commercial development

Financial summary The net operating surplus for 2018/19 is forecast to continue the growth trend of the last three years, with a seven per cent increase.

Commercial development 2017/18 2018/19 Year-on-year (£m) forecast Budget variance Other operating income 239 256 7% Direct operating cost (39) (44) 13% Direct operating surplus 200 212 6% Indirect operating cost (11) (9) -18%

Net operating surplus 189 203 7%

New capital investment (83) (136) 64% Property receipts 93 55 -41% Crossrail over site development 10 176 1660%

Net capital account 20 95 375%

Net Commercial development income 209 298 43%

Operating income is forecast to increase We are investing capital in ways to drive by £17m through 2017/18. This is driven sustainable future income streams. This by advertising on our new digital media includes digital media and upgrading platforms, Elizabeth line sponsorship and property assets, as well as new growing our new TfL Consulting service. developments on the Elizabeth line stations, platforms and ticket hall areas. While we expand our business – with the consulting arm and property activity generating income – our operating costs are expected to increase by £5m year on year.

We will continue to expand our commercial offering

66 Commercial development Transport for London Budget 67 Draft Draft

2018/19 priorities Advertising audience of Target of Our role is to keep London moving, Ahead of the Elizabeth line starting working and growing by making the best service, we will grant six commercial 1.5billion use of our assets and land to create partners year-long exclusive advertising 50% per annum of new homes homes and jobs, and by generating rights for the new stations and trains. We on our land to income to invest in transport. are also enhancing our existing assets, be genuinely providing hundreds of digital screens at affordable Housing bus shelters and installing 4.5 metre by We are now an established property 2.4 metre cross-platform displays at five developer, having brought forward sites Tube stations, including Oxford Circus during the past two years that will deliver and Liverpool Street. We have plans to thousands of homes. In 2018/19, we will follow this with a further 10 installations continue at pace unlocking sites across in Zones 1 and 2. £80m More than 16,000 investment to London that will deliver more than 3,000 advertising campaigns upgrade our digital homes. By 2020/21, we will start on the Small businesses carried each year advertising estate property development sites for 10,000 We will continue to support small homes. We intend that, overall, 50 per businesses by providing premises and cent of homes (as measured by habitable access to a huge and diverse customer rooms) built on our land and brought to base. New tenants will move into our market since 2016 will be affordable. arches at Wood Lane and Kingsland Road More than 300 and we will refurbish 11 arches at Latimer 94% newsagents and food Our joint venture partnerships to Road, providing new commercial space. of tenants are businesses across regenerate South Kensington and In 2018/19, we will continue to release small businesses the estate Northwood will start in 2018/19. We will smaller parcels of land through the continue to form joint ventures to build Greater London Authority’s ‘Small Sites, homes throughout the city, including Small Builders’ programme. This makes large sites at Limmo Peninsula (Canning sure that our land is made available More than Town), Kidbrooke and Blackhorse Road. for small and medium-sized enterprise 10million We will generate vital income from developers, housing associations and 100 capital receipts, long-term revenue and, community-led organisations. potential development sq ft in later years, development profit. sites across London of new residential Mobile coverage and commercial space Advertising We are on track to unlock London’s most With our Tube, rail, bus and road high profile ‘not spot’ from 2019 – the network stretching across London, our Tube. Our work to deliver 4G mobile outdoor advertising estate is one of the coverage in tunnels and at stations will most valuable in the world. We carry mean that, for the first time, customers more than 16,000 campaigns each year, will be able to check their emails and and have invested in opportunities to social media, read the latest news and generate new income. access live travel information while underground.

68 Commercial development Transport for London Budget 69 Draft Draft

Capital investment

London Underground

2018/19 Project Description £m

Four Lines Modernisation Upgrade of the Circle, District, Hammersmith & City and 373 Metropolitan lines resulting in a 33 per cent increase in capacity

Deep Tube Modernisation of the Piccadilly, Central, Bakerloo and 46 Upgrade programme Waterloo & City lines (new trains and signalling)

Northern line extension Extension of the Northern line from Kennington to Battersea 190

Major station upgrades Station capacity projects already in progress 133 (Victoria, Bond Street and Bank)

Fleet and signalling renewals Work to enable the existing train and signalling equipment 93 to continue to operate ahead of renewal via the Deep Tube Upgrade programme and Rail Vehicle Accessibility Regulations compliance works

Step-free access Additional step-free access projects beyond those 23 delivered through station capacity projects or Crossrail construction.

Energy/carbon Waste heat, energy and carbon reduction schemes, 4 reduction schemes including the Bunhill scheme

Other capital expenditure Includes technology and change projects, Tube stations 87 and Elizabeth line station interface points service

Other renewals Continuation of track and power cooling upgrade 171 programmes and works to upgrade lifts and escalators

Total 1,120

Our technology and construction investment will ensure we serve future generations

70 Capital investment Transport for London Budget 71 Draft Draft

Elizabeth line Professional services and commercial

2018/19 2018/19 Project Description £m Project Description £m

Crossrail (trains and Procurement of Elizabeth line trains and work on 316 Technology, Data Refresh technology assets and core infrastructure and 84 enabling work) existing stations and other invest in technology transformation programmes, including revenue collection assets, such as ticket gates and readers, data hosting, network infrastructure, cyber security, bus operating and monitoring systems and end-user computing Buses, Street and Rail Emergency Services Investment in the Emergency Services Network, which is 106 Network funded by the Home Office 2018/19 Project Description £m Total 190

Healthy Streets Work on recognising the value of increasing walking, 116 cycling and public transport, more sustainable freight and servicing Commercial development Schemes, infrastructure and initiatives that reduce 80 Air quality and environment dangerous emissions and improve the Capital’s air quality 2018/19 Public transport Investment in infrastructure to support buses, Santander 114 Project Description £m Cycles and other surface transport operations Commercial development This includes work to grow income by upgrading our media 136 Barking Riverside Extension of the Gospel Oak to Barking line to Barking (9) infrastructure, improving our retail estate and developing extension Riverside, supporting new housing our property portfolio, including delivering the Mayor’s affordable housing pledge Silvertown Tunnel New road crossing at Silvertown via tunnel under the Thames 17

Assets Investment to ensure London’s strategic roads 53 infrastructure remains in a state of good repair Crossrail DLR rolling stock New trains introduced 5 2018/19 Project Description £m Total 376 Crossrail construction Construction of the new East-West route across London 435 providing a new high-frequency commuter and suburban passenger service. This will form the Elizabeth line, which is due to become operational in December 2019

Total capital investment (including third party contributions) 2,573

72 Capital investment Transport for London Budget 73 Draft Draft

Appendices

1. TfL Group balance sheet

Actual Forecast Budget Balance sheet (£m) 31 March 2017 31 March 2018 31 March 2019 Intangible assets 140 134 183 Property, plant and equipment 36,839 39,333 40,179 Investment properties 558 558 558 Investment in associate entities 368 307 315 Long-term derivatives 18 17 17 Long-term finance lease receivables 4 19 55 Long-term debtors 26 22 47 Long-term assets 37,953 40,390 41,354 Stocks 72 68 68 Short-term debtors 1,821 571 506 Assets held for sale 15 14 14 Short-term derivatives 12 7 7 Short-term finance lease receivables 1 10 16 Cash and short term investments 1,961 1,621 1,405 Current assets 3,882 2,291 2,016 Short-term creditors (2,146) (2,154) (2,043) Short-term derivatives (4) (2) (1) Short-term borrowings (1,106) (847) (472) Short-term lease liabilities (77) (70) (70) Short-term provisions (194) (197) (77) Current liabilities (3,527) (3,270) (2,663) Long-term creditors (56) (79) (105) Long-term borrowings (8,690) (9,569) (10,746) Long-term lease liabilities (488) (420) (350) Long-term derivatives (79) (59) (59) Other provisions (44) (52) (41) Pension provision (5,364) (5,361) (5,361) Long-term liabilities (14,721) (15,540) (16,662)

Total net assets 23,587 23,871 24,045 Capital and reserves Usable reserves 1,861 1,566 1,122 Unusable reserves 21,726 22,305 22,923 From roads to river services, we provide a Total capital employed 23,587 23,871 24,045 fully integrated public transport network

74 Appendices Transport for London Budget 75 Draft Draft

2. TfL Group financial reporting tables Capital account These tables illustrate the Budget aligned to the financial reporting methodology published in our Quarterly performance report and Finance report.

2017/18 2018/19 Year-on-year TfL Group (£m) forecast Budget variance Operating account Capital renewals (554) (499) -10%

New capital investment (1,508) (1,733) 15%

2017/18 2018/19 Year-on-year Crossrail (1,496) (435) -71% TfL Group (£m) forecast Budget variance Total capital expenditure (3,558) (2,667) -25% Passenger income 4,653 4,774 3%

Other operating income 732 883 21% Financed by:

Total operating income 5,385 5,657 5% Investment grant 960 976 2%

General grant 228 - -100% Third-party contributions 76 94 24%

Business rates 854 947 11% Property receipts and asset sales 93 705 658%

Other revenue grants 79 69 -13% Borrowing 621 802 29% Crossrail funding sources 140 324 131% Total income 6,546 6,673 2% Other capital grants 189 311 65% Operating cost* (6,237) (6,661) 7% Total 2,079 3,212 54% Net operating surplus 309 12 -96% Net capital account (1,479) 545 -137% Depreciation and amortisation (1,096) (1,062) -3%

Net cost of operations before financing (787) (1,050) 33%

Net financing costs (442) (486) 10% Cash flow summary

Net cost of operations (1,229) (1,536) 25%

2017/18 2018/19 Year-on-year Cash balances (£m) forecast Budget variance Net cost of operations (1,229) (1,536) 25%

Depreciation and amortisation 1,096 1,062 -3%

Net capital account (1,479) 545 -137%

Working capital movement 1,272 (287) -123%

Decrease in cash balances (340) (216)

* Energy costs included in operating cost amount to £149m in 2017/18 and £177m in 2018/19

76 Appendices Transport for London Budget 77 Draft Draft

3. Budget milestones London Underground

Project Description Date Project Description Date

Deep Tube Upgrade programme Infrastructure renewals

Piccadilly line rolling stock Preferred bidder determined for new rolling stock contract July – 18 Lifts and escalators 23 lifts and escalators replaced and refurbished Mar – 19

Signalling and train control Tenders returned for signalling and train control contract Mar – 19 Track Install 7.5km of new track across the Underground network Mar – 19

Major stations Rolling stock renewals

Bank station capacity Preparatory power works complete to allow the start of Oct – 18 Rolling stock 50 per cent of Jubilee line fleet mid-life refurbishment Dec – 18 upgrade tunnelling for new escalators works complete

Bakerloo line link Bakerloo line link passage ready for Elizabeth line Nov – 18 75 per cent of Bakerloo line fleet refurbishment Dec – 18 (Paddington) trial running works complete

Victoria station upgrade All Victoria station passenger facilities available for use Dec – 18 Accessibility

Four Lines Modernisation (Circle, District, Hammersmith & City and Metropolitan lines) Accessibility Buckhurst Hill is a step-free station May – 18

New signalling system Train services on Hammersmith & City line use new signalling Oct – 18 Newbury Park is a step-free station Oct – 18 system between Hammersmith and Latimer Road South Woodford is a step-free station Mar – 19 Train services on Hammersmith & City line use new signalling Nov – 18 system between Ladbroke Grove and Paddington Stations renewals and enhancements

Northern line extension Renewals and enhancements Improvement works complete at Underground stations that Dec – 18 interface with the Elizabeth line Northern line extension Kennington station cross passage civil works complete Sept – 18 Finsbury Park is a step-free station Mar – 19 Nine Elms station civil works complete Sept – 18

Elizabeth line

Project Description Date

Elizabeth line Elizabeth line passenger services start on central section Dec – 18 between Paddington and Abbey Wood

78 Appendices Transport for London Budget 79 Draft Draft

Buses, Streets and Rail Professional services

Project Description Date Project Description Date

London Overground – Main works contract – supplier evaluation and award Jul – 18 Heathrow extension Extension of Oyster and Contactless acceptance to Heathrow May – 18 Barking Riverside extension recommendation complete Future Ticketing Delivery of weekly capping for Oyster customers Dec – 18 London Overground – Early works contract complete Jul – 18 Programme 4 Barking Riverside extension Ticket vending machine New ticket vending machines to support Elizabeth line Dec – 18 Highbury Corner bridge Construction complete Aug – 18 central service installed and ready for operation

Highbury Corner gyratory Start construction Aug – 18

Cycle Superhighway Phase 2 complete, from Stonecutter Junction to Judd Street. Dec – 18 North South This completes the CS6 route, running from Elephant and Commercial development Castle to Judd Street

Silvertown Tunnel Preferred bidder selected, dependent on national Jan – 19 Project Description Date Government support Media programme Announce Elizabeth line partners Oct – 18 Old Street roundabout Start advance works on site Feb – 19 Telecoms commercialisation Deliver a signed contract for the commercialisation of the Dec – 18 Liveable Neighbourhoods Feasibility stage complete for three of the seven boroughs Mar – 19 telecommunications assets, including the delivery of public that received feasibility funding in 2017/18 cellular services on the Underground

Mini Hollands 4.5km of segregated or semi-segregated cycle route Mar – 19 Kidbrooke Submit planning application Feb – 19 complete across Kingston, Waltham Forest and Enfield Blackhorse Road Submit planning application Mar – 19 Cycle Quietways Borough Construction of 25km of the total 250km completed in 2018/19 Mar – 19

Bus Retrofit Four low emission bus zone routes complete: Mar – 19 A2 Camberwell – New Cross A3 Wandsworth – St John's Hill A5 Edgware Road Edmonton – Seven Sisters

Sutton Tram Extension Consultation launch Nov – 18

80 Appendices Transport for London Budget 81 Draft

© Transport for London March 2018 tfl.gov.uk PUB18_002 Budget 2018_D12