Transport for London (TfL) is now forecasting a £128 million deficit for the current financial year, a dramatic reversal from the £5 million profit it had originally budgeted. The shift follows a period of industrial action and extreme weather that kept passengers away from the capital's transport network.
TfL attributes the financial downturn to four 24-hour Tube strikes by drivers in the Rail, Maritime and Transport union (RMT) and a record 40 days of temperatures at or above 30°C since April. These factors led to a significant drop in passenger numbers, undermining the authority's revenue expectations.
Strikes and heatwave drive passenger decline
The RMT strikes took place in April and June in a dispute over TfL's plans to introduce a four-day week. Although a truce was agreed in June, the union has threatened further action after summer talks failed to produce meaningful progress. In a memo to members, RMT general secretary Eddie Dempsey said the union was not being given a greater say at the negotiating table.
TfL now expects passenger income of £1.768 billion this year, which is £62 million below the amount budgeted before the financial year began. The shortfall is partly due to Londoners choosing to stay away from the network during the strikes and the prolonged heatwave.
Roads, tunnels, and upgrade costs add pressure
Income from roads and tunnels is also projected to be £22 million lower than budgeted, partly because of a drop in exempt vehicles entering the Congestion Charge zone or the Ultra Low Emission Zone. The authority has recorded an operating surplus for the past three years, but increased spending on upgrades has made the deficit more likely.
Since April, TfL has spent £103 million on the Piccadilly line upgrade, which will introduce a new fleet of trains from December. This is £17 million more than initially budgeted, though the authority has made savings by reducing its spend on Crossrail and the delivery of new Bakerloo line trains.
Economic climate and population changes also factor
TfL also points to the wider economic climate as a contributing factor. London has experienced a one per cent drop in payrolled residents, and the city's population fell by 27,000 in 2025. These demographic and economic shifts may have contributed to the decline in passenger numbers.
Despite the swing from a predicted £5 million profit to a £128 million deficit, TfL remains confident in its ability to manage the challenge. The authority believes its efforts to rebuild finances since the COVID-19 pandemic have positioned it well to handle the current pressures.
