Hannah Schmidt let the first train through to Waterloo at the station in Clapham Junction. "It was so full, there was no getting in," laughs the student from Mannheim, who is traveling through Great Britain for four weeks. She is convinced that London is now just as full and busy as on her three visits before the pandemic.
When shopping on Oxford Street, in the pubs in the West End on Thursday evenings or in the Tube at rush hour, the crowds really do feel as dense as they did in the summer of 2019. But impressions are misleading. At the end of July, the city's retail and supermarket occupancy rates were 90 percent of the values of summer 2019. The city's subways and buses did not even reach 75 percent of previous passenger numbers.
London is not an outlier. Mobility and occupancy rates in major cities around the world are below pre-pandemic levels. The causes are obvious. Significantly more people than before no longer make their way to work every day because they work from home more often. Because of the still strict corona rules, there are no tourists from Asia. In London, the reluctance of passengers is causing massive financial difficulties for local public transport.
So far the government has helped. Since ticket sales plummeted in March 2020, Transport Secretary Grant Shapps has injected nearly £5 billion (€5.9 billion) in emergency funding. Right now this will finally end up here. Most recently, the transport operator Transport for London (TfL) was only granted the funding commitments in small chunks, initially in £200 million increments.
Since the deadline for negotiations in June passed without a result, the extensions have followed every two weeks. The talks are considered to be extremely tough, the government is showing little willingness to expand funding, according to the British media.
At the same time drastic austerity measures are being negotiated. The Ministry wants to reduce the costs by £400 million in the current fiscal year. A new financing model was presented to transport provider TfL on July 22nd. That framework is now being examined in detail, said Andy Byford, the city's transportation officer.
£927m is missing for the rest of the year, and a long-term financing agreement is also needed. "We're considering whether the government's offer meets that need, and if not, what very tough decisions we'll have to make." He hopes to be able to bring the discussions to a successful conclusion soon.
"It is ridiculous. That's not how you run public transport in a cosmopolitan city like London," said Sadiq Khan, the city's mayor. "We can't stand still. We desperately need people back - but the government needs to understand that we need to keep investing in the future. You can't get a national recovery without a recovery from London, you can't achieve a successful economic rebalancing in which London becomes poorer. This is not a zero-sum game.”
The cause of the misery is, of all things, the previous financial success of TfL. In New York or Paris, the slump in passengers was as drastic as in London, explained Guilherme Rodrigues, transport analyst at the think tank Center for Cities.
But there, in the past, financing depended much less on ticket income. It was over 70 percent four years ago in London. In Singapore, on the other hand, tickets only accounted for around 45 percent of revenue, in New York and Hong Kong just under 40 percent, and in Paris 27 percent. The UK government plans to progressively increase the share of revenue from passengers even further.
"While TfL's reliance on fares could previously be viewed as a strength that has reduced reliance on government funding, it has become a significant weakness during the pandemic and subsequent recovery," Rodrigues said.
Large-scale projects such as the new Elizabeth Line, which since the end of May is to connect Reading and Heathrow Airport in the west with Abbey Wood and Shenfield in the east of the city over a distance of more than 100 kilometers, will not come about for the time being given the tight financial situation. The route was planned for a completely different world, said Tony Travers, professor of political science at the London School of Economics. The argument for this has always been that the railway would further fuel employment and economic activity in the city centre. "That logic is currently paused."
A rapid change due to more commuters is not in sight. Data from Locatee, an analysis company that specializes in the use and utilization of workstations, currently shows office usage of almost 20 percent. The majority of Brits are currently working entirely or primarily from home and intend to continue doing so in the long term, said Myriam Locher, co-head of Locatee.
At the moment the average office occupancy is between 15 and 20 percent. In many companies, conference and common rooms are now much more in demand than individual desks. To put it simply: Employees come to the office to meet colleagues, customers or service providers. On other days, they do video conferences or concentrated work from home.
According to Myriam Locher, co-head of Locatee, the planning of the building has long been geared towards this. In addition to the costs, they would have to keep an eye on the emissions from the buildings and also ensure that there is enough space for employees who want office space. “More and more data is helping companies better understand what drives employees to work from home or come into the office. And also to question whether the solutions are as desired.”
Data shows that user behavior in London's public transport has changed. Even two and a half years after the start of the first lockdowns, subway stations in the city's financial center only achieve 55 to 60 percent of their previous occupancy on many days. Around 70 percent of journeys in 2019 now take place on weekdays across the subway network. Weekend and excursion trips, on the other hand, account for 85 percent.
The new habits could leave a £2bn financial gap, TfL officials fear. And that's despite having saved £1 billion over the past five years. The only way to plug the hole would be to severely cut supply.
But a cut would inevitably jeopardize Mayor Khan's stated goal: to reduce car traffic on the city's notoriously congested streets by 27 percent by 2030 to cut emissions and significantly improve air quality. The next step, by 2041, is the goal that 80 percent of all journeys should be made on foot, by bike, or by bus and train.
But the infrastructure will not be increased as planned for the time being. Two major projects have already been mothballed: an extension of the Bakerloo underground line to the poorly connected south-east of the city and the planned north-south connection Crossrail 2. The projects should not be examined again until after 2030 at the earliest.
In March, when the discussion about increasing the cost of living was already in full swing, bus and train fares in the city were raised by almost five percent. Since taking office in 2016, Khan had frozen them, also to encourage more Londoners to switch to public transport.
Cuts in the bus connections are currently being examined. 16 routes are likely to fall completely victim to the cuts. Overall, a fifth of the bus connections in the city center could soon be eliminated. The subway offer is also likely to be thinned out. Programs to make cycling and walking routes more attractive are also being reviewed.
The city is now working towards a new, long-term financing concept with the government, said London transport officer Byford. “Every other major transportation system in the world receives government funding. London needs the same to be able to deliver a transport network that will continue to create homes, jobs and economic growth in the future.” This summer, with record heat on the island, underlines once again the important role that a functioning public transport system plays.
A look across the canal could provide inspiration. Transport analyst Rodrigues and his colleague John Gibson took a closer look at Paris' financing model, with a similarly extensive mass transit system. France's capital has been levying a regional tax on gross wages, the Versement Transport, for 50 years. Depending on where you live within the greater Paris area, the fee is between 1.4 and 2.6 percent.
"The Paris financing model stems from the approach (...) that the transport network is for the benefit of the city and should therefore be financed by the majority of the population," said Rodrigues. Around half of the funding comes from this source, with the French state contributing another fifth directly. But even if the model could be introduced quickly and easily, it will hardly ever come to that - the London city government does not have the authority to levy its own taxes and levies. Only further negotiations with the Ministry of Transport remain.
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