London boroughs will have to wait until 2021/22 for Covid-19 savings in the concessionary travel reimbursement they pay Transport for London.
Boroughs are facing huge funding shortfalls in 2020/21 because of the additional costs and income losses resulting from Covid-19. This has prompted councillors to question why they are continuing to pay TfL for concessionary travel made by Freedom Pass holders at pre-Covid-19 trip rates.
London Councils’ chief contracts officer, Stephen Boon, told its transport and environment committee that the amount boroughs paid TfL in any one year for the statutory element of the Freedom Pass was based on journey numbers in the previous two years. The 2020/21 settlement is therefore based on journeys made in 2018/19 and 2019/20.
“Notwithstanding significant pressures on local authority budgets in the current financial year, London Councils believes that the existing agreement should be honoured,” said Boon.
Trying to reopen the 2020/21 payment would risk a long and costly legal process with an uncertain outcome and could mean “local authorities pay more per journey than if they had waited until next year”.
“This is because TfL could then legitimately revisit other aspects of the agreement,” explained Boon, adding: “The per person cost of providing transport has increased significantly as fewer people are now travelling.”
He said the lower Freedom Pass trip rates made in the current year meant there were “likely to be significant savings” for boroughs in 2021/22 and 2022/23.
“Current best estimates suggest that savings in 2021/22 could be between £30m and £45m, and possibly more the following year.”
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