Seven thoughts on TfL’s bail out from national government

A deserted Westminster tube station. Image: Getty.

A political earthquake hit the British capital last night. Transport for London (TfL), a public agency, found itself just hours away from running out of money, and was forced to beg national government for a £2bn bail out. 

The government agreed – but on much harsher terms than TfL wanted, offering £1.1bn in cash and £505m in loans. And since the government is in the hands of the Conservative party, while the chair of TfL is London’s Labour mayor Sadiq Khan, some observers have noticed a distinct whiff of political self-interest about the whole deal. 

So what does it all mean? Here are seven thoughts.

1. Something like this was probably inevitable

TfL has not received any operating grant from central government since 2018 – the result of a 2015 agreement between then Tory chancellor George Osborne and then Tory mayor Boris Johnson (now the, er, Prime Minister) that London’s transport network should be self-funding. That means that all the money required to keep the tubes, buses and so forth moving comes from fares: a situation unique in Britain, and probably in Europe, too.

But with the entire city in lockdown and people being advised not to use public transport, fares have collapsed – by 90%, according to TfL spokespeople. This was obviously unsustainable, even before the government began encouraging people back to work once again. So: it’s hard to see how the agency could have avoided asking for a bail out.

2. Not all of the conditions attached to the deal are terrible

Okay, the money isn’t what TfL wanted. But the promise to restore services frequencies to normal levels “as soon as possible” seems reasonable enough. Similarly, barring Freedom Pass holders – that is, retirement-age Londoners, who get free travel – from using peak hours services, seems to be a sensible measure. It not only means better demand management; it also reduces the chances that vulnerable transport users end up on the most crowded, and so potentially infectious, services.

Even the pledge to increase bus and tube fares by 1% above inflation next year – arguably in breach of Sadiq Khan’s 2016 election pledge to freeze them for his first term, and not to raise them faster than the cost of living in his second – is probably a sensible enough response to TfL’s current financial crisis. But...

3. Other elements of the bail out look like a power grab

Another condition of the deal is that government officials will sit on TfL board meetings, and that the agency will send regular financial reports to the national Department for Transport. That feels like a step back in terms of financial and operational independence. 

What’s more, the government is insisting that TfL will run public information ads using its own “Stay Alert” formulation, rather than Khan’s favoured “Stay at Home” ones. This may seem – is – petty, but national government has come under fire for the lack of clarity of its messaging: this neutralises a covert attack on it.

More philosophically, whoever holds the purse strings holds the power. Scrapping the operational grant radically reduced central government’s influence over how the mayor runs TfL. This bail out increases it once again.

4. It’s almost certainly politically motivated

Bbefore it was delayed by coronavirus, Khan was almost certainly on course to win this year’s mayoral election, and must still be considered the favourite when it (probably) finally happens next year. 

There are many reasons for this: incumbency advantage; the weakness of the Tory candidate Shaun Bailey; the fact London is overwhelmingly a liberal pro-Remain city, at a time when the Tory party has been overwhelmingly illiberal and pro-Brexit. Nonetheless, however unfair it is (a bail out was, remember, inevitable), “Khan wrecked TfL’s finances and came cap in hand to the Treasury” might just be an effective attack line on a popular Labour politician.

5. Khan set himself up for this

The mayor’s signature pledge before the 2016 election was to freeze fares. This was understandably popular – but it also risked undermining TfL’s finances further at the exact moment central government had decided to withdraw its grant. Rachel Holdsworth, then a senior editor at Londonist, argued as much on CityMetric way back in November 2015.

Khan’s partisans will say that the lack of fare rises (which has cost it £640m over four years) is nothing in comparison to the loss of the central grant (£700m a year) or the collapse in fares caused by Covid-19 (£600m a month). They’re right. Nonetheless, however unfairly, the freeze has made it possible to paint Khan as profligate.

6. But it’s not clear it’ll work

All that said – if Khan is savvy, he might be able to turn this to his advantage. The fares freeze was probably going to go at some point – now he can blame the pandemic or the Tory government for something that would have happened anyway, and for passing the cost of the pandemic onto Londoners. 

And if the cost of central government support is more central government oversight, then at least it means the return of central government support. Khan may be able to spin this. 

7. This is a sticking plaster

The bail out is worth just over £1.6bn. Spokespeople for the mayor’s office say that it currently costs £600m a month to keep TfL services running. So by my count, if nothing changes, this money will be enough to help TfL survive to somewhere around early August.

Maybe passenger numbers will be rising by then. Very possibly they won’t. I doubt this will be the last bail out TfL needs.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.


In South Africa's cities, evictions are happening despite a national ban

An aerial view shows a destroyed house in Lawley, south of Johannesburg, on April 20, 2020. The city has been demolishing informal structures on vacant land despite a moratorium on evictions. (Marco Longari/AFP via Getty Images)

On the morning of 15 July, a South African High Court judge ruled that the city of Cape Town’s Anti-Land Invasion Unit had illegally evicted a man when it destroyed the shack where he was living.

That afternoon, the Anti-Land Invasion Unit was out again, removing shacks in another informal settlement.

Evictions were banned in South Africa for nine weeks, after the national government placed the country under a strict Covid-19 lockdown in late March. At present, eviction orders are automatically suspended until the country moves to a lower “alert level” and can only be carried out with a special order from a judge.

Yet major cities including Cape Town, Johannesburg and eThekwini (created through the merger of Durban with several surrounding communities), have continued to use municipal law enforcement agencies and private security companies to remove people from informal housing. In many cases those operations have been conducted without a court order – something required under regular South African law.

Around 900 people were evicted from three informal settlements in eThekwini during the eviction ban, according to the Church Land Programme, a local NGO. Its director, Graham Philpott, says it’s also aware of evictions in other informal settlements.

While evictions aren’t a “new experience” in these communities, the NGO released a report on lockdown evictions because they were “so explicitly illegal”. “There was a moratorium in place,” Philpott says, “and the local municipality acted quite flagrantly against it. There’s no confusion, there’s no doubt whatsoever, it is illegal. But it is part of a trend where the eThekwini municipality has acted illegally in evicting the poor from informal settlements.”

Evictions also took place in Cape Town and Johannesburg during so-called “hard lockdown” according to local activists. In eThekwini and other municipalities, the evictions have continued despite restrictions. In Cape Town, authorities pulled a naked man, Bulelani Qholani, from his shack. That incident, which was captured on video, drew condemnation from the national government and four members of the Anti-Land Invasion unit were suspended. 

The cities say they’re fighting “land invasions” – illegal occupations without permission from the land owner.

“Land invasions derail housing and service projects, lead to the pollution of waterways, severely prejudice deserving housing beneficiaries and cause property owners to lose their investments over night,” Cape Town’s executive mayor, Dan Plato said in a statement. (Plato has also claimed that Qholani did not live in the shack he was pulled from and that he disrobed when municipal authorities arrived.)

South African municipalities often claim that the shacks they destroy are unoccupied. 

If they were occupied, says Msawakhe Mayisela, a spokesman for the eThekwini municipality, the city would get a court order before conducting an eviction. “Everything we’re doing is within the ambit of the law,” Mayisela says. But “rogue elements” are taking advantage of Covid-19, he added.

“We fully understand that people are desperately in need of land, but the number of people that are flocking to the cities is too much, the city won’t be able to provide housing or accommodation for everyone overnight,” he says. 

While eThekwini claims to be a caring city, local activists say the evictions show otherwise.

In one case, 29 women were evicted from shacks during the hard lockdown. With nowhere to go, they slept in an open field and were arrested by the South African Police Service for violating the lockdown, Philpott says.

“These evictions are dehumanizing people whose dignity is already compromised in many ways,” says S’bu Zikode, the president of Abahlali baseMjondolo, a community organization whose Zulu name translates to “the people of the shacks”. 

“It has reminded us that we are the people that do not count in our society.”

Municipal law enforcement and private security contractors hired by cities regularly fire rubber bullets, or even live ammunition, at residents during evictions. Some 18 Abahlali baseMjondolo activists have been killed since the organization was founded in 2005, Zikode says, most by the eThekwini Land Invasion Unit and Metro Police.

(Mayisela says that if city employees have broken the law, Abahlali baseMjondolo can file a complaint with the police. “There is no conclusive evidence to the effect that our members have killed them,”  he says.)

Other Abahlali baseMjondolo activists have been killed by what Zikode calls “izinkabi,” hitmen hired by politicians. Two eThekwini city councillors were sentenced to life in prison 2016 after they organized the killing of Thuli Ndlovu, an Abahlali baseMjondolo organizer. A member of the Land Invasion Unit who is currently facing a charge of attempted murder after severely injuring a person during an eviction remains on the job, Zikode says.

South Africa’s 1996 constitution is intended to protect the public from arbitrary state violence and guarantees a right to housing, as well as due process in evictions. But for Zikode, the South African constitution is a “beautiful document on a shelf”.

“For the working class and the poor, it’s still difficult to have access to court. You’ve got to have money to get to court,” he says. 

The actions by municipal law enforcement are breaking down social trust, says Buhle Booi, a member of the Khayelitsha Community Action Network, a community group in the largest township in Cape Town.

“There’s a lack of police resources and those very few police resources that they have, they use to destroy people’s homes, to destroy people’s peace, rather than fighting crime, real criminal elements that we see in our society,” Booi says.

For him, it’s a continuation of the practices of the colonial and apartheid governments, pushing poor people, most of whom are Black, to the periphery of cities.

Around one-fifth of South Africa’s urban population live in shacks or informal dwellings, according to a 2018 report by SERI. Many more live in substandard housing. City governments maintain that the shacks destroyed during anti-land invasion operations are unfinished and unoccupied. But Edward Molopi, a research and advocacy officer at SERI, says that this claim is an attempt to escape their legal obligations to get a court order and to find alternative accommodation for affected people. 

The roots of the current eviction crisis go back to apartheid, which barred non-white people from living in cities. Between the 1940s and 1970s, tens of thousands of people were forcibly relocated from neighbourhoods like Johannesburg’s Sophiatown and Cape Town’s District Six to remote townships.

In the 26 years following the end of apartheid, deepening economic inequality and rampant unemployment have limited access to formal housing for millions of South Africans. Government housing programs have mostly focused on building small stand-alone homes, often on the peripheries of cities far from jobs and amenities.

While these well-intentioned projects have built millions of homes, they’ve failed to keep up with demand, says Marie Huchzermeyer, a professor at the Centre for Urbanism & Built Environment Studies at the University of the Witwatersrand in Johannesburg. Government-funded housing projects “will never on it’s own be enough,” she says. “It has to be accompanied by land release.”

Government policies call for the “upgrading” of informal settlements and the formalization of residents’ occupation. But “there are still very, very, very few projects” of that nature in South Africa, Huchzermeyer says. “Even if it’s an informal settlement that’s been around for 20 years, there still seems to be a political wish to punish people for having done that.” The government wants people to go through the formal process of being given a house, she says – and for them to be thankful to the government for providing it.

At the municipal level, change will require “real leadership around informal settlement upgrading and around ensuring that land is available for people to occupy,” she says. 

Despite the end of enforced racial segregation, spacial apartheid remains a factor in South Africa. There are few mixed-income neighbourhoods. Those who can afford to often live behind walls in sprawling low-density suburbs, while the poor live in overcrowded slums and apartment buildings.

The creation of the apartheid city “didn't happen by chance,” says Amira Osman, a professor of architecture at the Tshwane University of Technology. “It was a deliberate, structured approach to the design of the city. We need a deliberate, structured approach that will undo that.”

Since last fall, Johannesburg’s Inclusionary Housing Policy has required developments of 20 or more units to set aside 30% of those units for low-income housing.

The policy, which faced significant opposition from private developers, won’t lead to dramatic change, says Sarah Charlton, a professor at the Centre for Urbanism and Built Environment Studies, but it is “an important and significant step.”

Zikode isn’t optimistic that change will come for shack dwellers, however.

“People in the high positions of authority pretend that everything is normal,” he says. “They pretend that everyone is treated justly, they pretend that everyone has homes with running water, that everyone has a piece of land – and hide the truth and the lies of our democracy.”

Jacob Serebrin is a freelance journalist currently based in Johannesburg. Follow him on Twitter.