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Sadiq Khan unveils plan to raise council tax in London due to TfL’s finances

The Labour mayor called on the Government to provide long-term funding for public transport in the capital.

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Plans to raise council tax in London by around £20 a year because the Government is “refusing to properly fund” public transport in the capital have been announced by mayor Sadiq Khan (Dominic Lipinski/PA)

Plans to raise council tax in London by around £20 a year because the Government is “refusing to properly fund” public transport in the capital have been announced by mayor Sadiq Khan (Dominic Lipinski/PA)

Plans to raise council tax in London by around £20 a year because the Government is “refusing to properly fund” public transport in the capital have been announced by mayor Sadiq Khan (Dominic Lipinski/PA)

Plans to raise council tax in London by around £20 a year because the Government is “refusing to properly fund” public transport in the capital have been announced by mayor Sadiq Khan.

He declared that the increase is “not something I want to do” but claimed he is being “forced down this route” due to the lack of a long-term funding deal in relation to Transport for London (TfL).

The Department for Transport (DfT) has previously insisted it has “repeatedly shown its commitment” to supporting TfL during the pandemic by providing “more than £4 billion in emergency funding”.

Ministers are effectively holding London to ransomSadiq Khan

The three-year hike in council tax would raise an estimated £172 million annually.

In addition, Mr Khan plans to increase the age of eligibility for free travel using the 60+ pass by 10% each year over the next 12 years.

He is also proposing to scrap cheaper off-peak fares for Tube journeys between Zone 1 and Heathrow, and raise the cost of an Oyster card deposit from £5 to £7.

Despite these measures, the Labour mayor said “managed decline” of TfL will still be required, involving “significant cuts” to bus and Tube services.

Mr Khan reiterated his call for the Government to “give back the £500 million Londoners pay every year in Vehicle Excise Duty”, which is “currently used almost entirely to maintain roads outside London”.

He said: “The Government is still refusing to properly fund TfL, and ministers are effectively holding London to ransom, threatening to withhold all emergency funding unless even more significant additional revenue is raised from Londoners for TfL.

“These are on top of the changes forced upon London last year when short-term funding was first given.”

He added that the pandemic is the “sole cause” of TfL’s financial problems.

A previous funding agreement between the Government and TfL was due to expire on Saturday December 11, but was extended until Friday.

A DfT spokesperson said: “We received a response from the mayor on income generation proposals which can move TfL towards a financially sustainable future, in a way that is fair to the national taxpayer.

“As this response was received three weeks late, we agreed to extend the current funding package for one week to seek further clarity from the mayor.

“We have now received a further response from the mayor which we will consider and respond to in due course.”

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