Transport for LondonFinancial review 2004/05
Skip to navigationRevenue by mode (£m)
Fares on the London Underground and bus network continued to be TfL's main sources of revenue, making up some 82 per cent of all revenue generated in 2004/05. The continued increase in passenger demand across the network contributed to a 7 per cent increase in fares revenue on the London Underground to £1,240 million and a 13 per cent increase in fares revenue on the bus network to £871 million. The introduction of a fares revision in the final quarter of the year was in line with the Mayor's funding strategy for TfL's Business Plan. Fare increases of around 4 per cent (RPI + 1 per cent) on Travelcards and around 13 per cent (RPI + 10 per cent) on bus only tickets have also contributed to the revenue result. These fare increases were necessary to help secure TfL's unprecedented funding settlement through the 5-Year Investment Programme.
Revenue breakdown (2004/05)
The DLR raised some £43 million of fares revenue during 2004/05. However, of this, around £30 million is collected by franchise operators who manage the DLR network. The remaining £13 million collected by TfL, which relates to the Lewisham extension, was up 8 per cent on the previous year and reflected increased passenger demand for the service.
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Congestion Charging
Congestion Charging was introduced on 17 February 2003 in central London at a daily rate of £5 per car or goods vehicle. The daily rate increased to £8 from 4 July 2005.
The net revenues from the Congestion Charge are spent on improving transport within London in line with the Mayor's Transport Strategy.
| £m | Group and Corporation 2003/04 |
Group and Corporation 2004/05 | |
|---|---|---|---|
| Revenue | 186.7 | 218.1 | |
| Expenditure | Charging operations | (120.9) | (120.8) |
| Traffic Management | (2.0) | (0.6) | |
| Deferred charges |
(17.2) | 1.7 | |
| Depreciation |
(1.1) | (1.6) | |
| Capital Financing Charges |
(0.2) | (0.4) | |
| Net income/ (Expenditure) |
45.3 | 96.4 | |
Operational expenditure
Expenditure by mode (£m)
TfL's expenditure in 2004/05 reflected the group's increased level of activity during the year. The rise was most evident within the bus network where expenditure was up 12 per cent on the previous year to £1,426 million. This increase principally reflects the continued updating of quality standards across all aspects of the network through the contracting system (Quality Incentive Contracts). This contributed to the best service quality and service reliability seen on the network since records began in 1977, with passenger volumes not seen since the1960s.
Operational expenditure breakdown (2004/05)
Operating expenditure on the London Underground remained largely unchanged on the previous year, increasing around 1 per cent to £1,948 million. An increase in staff costs reflected both the recruitment of additional resources during the year to support the commencement of the investment programme and a change in funding to the staff pension scheme, up 15 per cent at the start of the year.
During 2004/05 TfL continued its commitment to provide value for money and ensure that public resources were used efficiently by achieving efficiency gains of £119 million in 2004/05 up from £42 million achieved during the first year of the programme in 2003/04.
Capital expenditure
Over 80 per cent of TfL's capital expenditure during 2004/05 related to capital works being undertaken on London Underground's infrastructure. In turn, the expenditure of £948 million included some £712 million of capital works undertaken by the infracos through PPP contracts.
Capital works undertaken by the infracos included: the refurbishment of five stations (Northfields, South Harrow, Arnos Grove, Kilburn and West Hampstead); the modernisation of three stations (Burnt Oak, Borough and Tufnell Park); modernisation works at Wembley Park station to reduce congestion; lengthening Jubilee line trains from six to seven cars which will be seen in service in 2006; the renewal of 24 kilometres of track; and the refurbishment or replacement of 26 escalators. Additional refurbishment and modernisation works at a further nine stations that were due for completion in the contractual year are ongoing. Refurbishment works also commenced on the District line rolling stock (D Stock). Other works undertaken by London Underground during the year included station planning works, station upgrades, congestion relief works and accessibility improvements.
In addition, extensive works at King's Cross which included enlarging the main ticket hall and constructing of the new western ticket hall, were undertaken in preparation for the Channel Tunnel Rail Link (CTRL).
Capital expenditure by mode (£m)
In other areas of the group, £160 million spent on capital works by Surface Transport included renewal works on the Transport for London Road Network (TLRN), developing the Bus Priority Scheme and implementing walking and cycling initiatives and improvements to road safety. £16 million spent on DLR related to capital programmes included funding for railcar refurbishment, the introduction of 23 refurbished vehicles due in service at the end of 2004/05 and an extension to the London City Airport, due to be opened at the end of 2005.
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