Transport for LondonStatement of Accounts
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Transport for London (TfL) is a statutorycorporation established by section 154 of the Greater London Authority Act 1999 (GLA Act). It is a functional body of the Greater London Authority (GLA) and reports to the Mayor of London. TfL's role is to implement the Mayor's Transport Strategy and manage the transport operations for which the Mayor is responsible.These include London Underground, London Railand Surface Transport.
Underground services are operated directly by London Underground Limited (LU) supported by three Public Private Partnerships (PPPs), under which private sector consortia maintain and upgrade the railway infrastructure. Each weekday, over three million passenger journeys are made over the Tube network's 408km of routes, calling at 275 stations, of which 253 are owned by LU.
Surface Transport includes:
- Streets, which is responsible for operating and improving conditions for all road users, including pedestrians and cyclists, on a 580km network of London's main roads. It is also responsible for Congestion Charging, which was introduced in central London in 2003
- Public Carriage Office, which is responsible for regulating the taxi and private hire trades
- London Buses, which manages bus services in London. It plans routes, specifies service levels and monitors service quality. The bus services are operated by private companies, which work under contract to TfL except for a small number of routes run by TfL's own operating company, East Thames Buses
- Dial-a-Ride, which provides door-to-door transport for disabled Londoners
- Croydon Tramlink, operated by a concessionaire, providing a service through four south London boroughs
- Victoria Coach Station, which is the coach travel 'hub' of central London, handling around nine million passengers per year travelling on nearly 400,000 arrivals and departures
- London River Services, which owns and operates nine passenger piers on the Thames and licenses boat services using those piers
Cross London Rail Links Limited, a joint venture formed with the Department for Transport, is tasked with promoting and developing Crossrail a new railway proposed to run through central London linking Maidenhead in the west with Shenfield to the north-east and Abbey Wood to the south-east of the Capital. A bill is going through Parliament to grant the authority to build the railway.
Other activities include London's Transport Museum, whose outstanding heritage collections and accessible displays provide an insight into the role of transport in the growth and prosperity of London.
Legal structure
The legal structure is complex in comparison to that of most local authorities and comprises:
- The Corporation which comprises Streets, the Public Carriage Office and the corporate centre and constitutes, for legal and accounting purposes, TfL
- The TfL Group, which is made up of the Corporation and its subsidiaries as set out in Note 12
Accounting statements
Under the Greater London Authority Act 1999, the Corporation is treated as a local authority for accounting purposes. The Statement of Accounts, which includes the individual financial statements of the Corporation, has been prepared in accordance with the Code of Practice on Local Authority Accounting in Great Britain 2005: A Statement of Recommended Practice ('the SORP').
TfL's subsidiaries are subject to the accounting requirements of the Companies Act 1985 and separate statutory accounts are prepared for each subsidiary and for the Transport Trading Limited Group ('the TTL Group'). The financial statements for the TfL Group, which consolidate the accounts of the Corporation and its subsidiaries on the basis set out in the statement of accounting policies (paragraph c), are also presented alongside the financial statements of the Corporation.
The Statement of Accounts comprises:
- The Corporation revenue account, which shows the income and expenditure on the provision of transport services and how the resultant net expenditure has been financed by Government grants and local taxpayers
- The Corporation balance sheet, which shows the financial position as at 31 March 2006
- The Corporation statement of movements in reserves, which summarises the movements in the fixed asset restatement account, the capital financing account, earmarked reserves and the general fund
- The consolidated group accounts, comprising the Group revenue account, the Group balance sheet and the Group statement of movements in reserves
- The Corporation and Group cash flow statements summarising the inflows and outflows of cash for the Corporation and the Group
- The statement of accounting policies
- The notes to the Corporation and Group financial statements
Within the Statement of Accounts, references to the 'Corporation' relate to the transactions, assets and liabilities of TfL. References to the 'Group' relate to the accounts of TfL and its subsidiaries.
Financial and Business Review
Government and the GLA provided transport grant funding of £2,180m (2004/05 £2,260m) and total revenue from fares and other services increased to £2,738m (2004/05 £2,555m).
The Group's revenue expenditure increased to £4,434m from £4,190m in 2004/05. Capital expenditure has increased to £1,785m (2004/05 £1,157m) which includes £888m (2004/05 £712m) provided under the PPP contracts and £147m (2004/05 £nil) in respect of the DLR City Airport Extension which was provided under a Private Finance Initiative and became operational in 2005/06.
In July 2004, the Group achieved an historic funding settlement with the Government which provides funding over the five years to 2009/10, rather than the traditional two years.
The settlement enables £10bn to be invested in London's transport infrastructure over the period 2005/06 to 2009/10 as set out in TfL's Investment Programme.
With the certainty provided by the funding settlement and the introduction of new legislationallowing for Prudential Borrowing in April 2004, TfL established a £3.3bn borrowing programme last year for 2004/05 to 2009/10 to support the Investment Programme.
In March 2006, the Corporation launched its second Eurobond issue for £200m through joint arrangers HSBC and Morgan Stanley.
The Corporation also borrowed £334.4m from the Public Works Loan Board and the first £18.1m instalment of a £450m project finance facility relating to the East London Line.
This borrowing by the Corporation uses £746m of the £800m limit set by the Mayor for 2005/06.
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