Plans to upgrade major parts of the London Underground will be put on hold after a decline in passenger numbers, government cuts and delays to the opening of Crossrail have left the capital’s transport authorities struggling to balance the books.

Delayed Crossrail could cost almost £3bn more than planned Read more

Transport for London said its revenues would be £2.1bn lower for the next five years than forecast in 2016, compounded by the end of an average £700m annual government grant. TfL has also been budgeting for a £600m operating loss from the delayed opening to Crossrail – on top of the extra construction costs London would incur.

Projects to be deferred include the modernisation of signalling on the Piccadilly line and the rebuilding of Camden Town station.

TfL, which ran a deficit of almost £900m last year, said that the Crossrail overrun, where the one-year delay was likely to be extended when the new leadership team sets a “credible” revised opening date in January – would put back its plans to break even for another year, until 2023.

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The business plan also assumes fares would rise in London by more than inflation after the end of the first term of the mayor, Sadiq Khan. Khan had frozen fares for the first three years of his tenure, but an annual RPI+1% rise would now be factored in.

More jobs would also be lost at TfL as it sought to cut back-office costs by 30% through merging departments and functions. TfL’s boss, the transport commissioner Mike Brown, said investment would continue despite other significant projects being put on ice, but there would be “tough conversations about value for money”.

TfL facing near £1bn deficit next year after journey numbers fall Read more

The capital would be lobbying hard for renewed funds ahead of the comprehensive spending review in 2019, he said, adding: “This is our first year without a government grant, and we’ve also faced macro-economic challenges that have affected demand on buses and particularly on the Tube.”

The average Londoner now makes about 15% fewer trips on average than four years ago, according to TfL.

Brown said: “London’s success is critical to the UK – I would be confident that the government would see that argument and not risk going back to the depressing days of the 80s and 90s when London was in decline, and the UK wasn’t exactly booming. You get a real economic benefit from this investment.”

TfL planned to drive up advertising and property income to pay for the shortfall, and could hike business rates. The lobbying group London First suggested Crossrail’s tunnels could be sold instead.