How we are funded

    We are funded from five main sources:

      • Fares income - this is the largest single source of our income
      • Other income, including advertising income, property rental and income from the Congestion Charge
      • Grant funding from the Department for Transport (DfT) and Greater London Authority (GLA)
      • Crossrail funding - this is funding provided from a combination of sources, including grant from the DfT, GLA funding financed through the Crossrail Business Rate Supplement, the Community Infrastructure Levy and developers' contributions
      • Borrowing and cash movements
        TfL sources of fundingBreakdown of how we are funded

        Fares income

        This is the single largest source of our income (40%), making a contribution to the costs of operating and improving our transport services. The decisions on fares are taken each year by the Mayor.

        Fares increases have been maintained at the Retail Price Index rate in 2014 and 2015 - a real terms fares freeze. Our Business Plan assumes that fares will increase at the rate of Retail Price Index plus 1% each year from 2016 to 2021.

        Other income

        In addition to fares income, we generate income from the Congestion Charge and road network compliance charges. We also generate income from advertising, property rental and property sales and development, the latter including the Earl's Court joint venture and 55 Broadway.

        We take advantage of commercial development opportunities and have recently introduced 'click and collect' at stations as well as third-party sponsorship for the Cycle Hire and the Emirates Air Line. Other income makes up 9% of our funding.

        Grant funding

        This makes up 23% of our funding and is received from central and local government, with the main sources being:

        • The DfT general grant, which is used to cover our operating costs. Funding levels have been agreed for the period up to 2015/16
        • DfT investment grant, which is used solely for capital improvements to relieve congestion, improve reliability on key routes and provide a good fit with UK transport policies. Central government has provided a funding commitment to 2020/21
        • Business Rates Retention, which is funded from a proportion of local business rates and paid to us from the GLA. From 2013/14, this replaced a share of the grant previously paid as the DfT general grant
        • Northern line extension funding, provided by the GLA and financed from: incremental business rates generated and retained within a new enterprise zone, and developers' contributions, raised by Wandsworth and Lambeth boroughs The GLA precept, which is funded from local Council Tax receipts

        Crossrail funding

        The new Crossrail project is the responsibility of Crossrail Ltd, a wholly-owned subsidiary of ours. Funding for it makes up 8% of our income. The project is jointly sponsored by us and the DfT.

        We provide Crossrail funding as well as the DfT, GLA, through the Community Infrastructure Levy and developers' contributions, and from surplus land and property development income, which is expected towards to the end of the project.

        In 2010, more than £1bn of project savings were identified through station and engineering improvements, which reduced both ours and the DfT's funding of the project.

        Borrowing and cash movements

        We borrow from a variety of sources using a combination of mechanisms, including bonds, commercial paper, loans for specific projects from the European Investment Bank and the Public Works Loan Board. It makes up 20% of our income.

        Our borrowing is based on considerations including the cost of borrowing, market conditions and the level of flexibility offered. Our borrowing limits are set out in our funding agreement with central government and are approved by the TfL Board.

        Our new business plan will be part funded from cash balances. All of our cash balances, beyond a prudent minimum, are allocated to the investment outlined in the Plan. Our cash balances will only be used to fund capital investment and will never be used for any other purpose.


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