Sadiq Khan has been given the green light by ministers to continue to use council tax to bail out Transport for London.
In a statement, issued by Levelling Up Secretary Michael Gove, the government has agreed to allow London’s Mayor to add an additional £20 to benchmark Band D council tax bills from next April to help TfL balance its day-to-day budget.
Mr Khan had announced last year that he planned to add a £20 a year levy to average council tax bills for three years to provide extra funding to TfL, which has seen its fares income collapse due to the pandemic. This would be the second of three annual TfL hikes. TfL is facing a shortfall in income because almost one in four Tube weekday Tube passengers are yet to return to regular travel.
Mr Khan is yet to announce his draft budget for the 2023/24 financial year but proposals are due this month. His current Band D “precept” – which is paid by Londoners alongside their borough’s share of council tax – is almost £400.
The mayor has become increasing reliant on council tax to fund TfL, despite describing it as a “regressive” tax that hits the poor hardest. Last month he said £25m of City Hall reserves would be used to limit the scale of bus cuts in central London.
He is also planning to use £110m of City Hall funds to pay for a scrappage scheme for the Greater London expansion of the ultra-low emission zone, which is due to happen next August.
