Commuters face inflation-busting 7% fare rise on Tubes and buses

Passengers were today facing another inflation-busting fare increase on London transport.

Ticket prices could rise by about seven per cent next January as Transport for London struggles to balance its finances. Officials told the London Assembly's budget committee that commuters might have to foot the bill for higher running costs and the need to maintain investment.

They confirmed they are working on the basis that fare rises would be set at two per cent above the Retail Prices Index rate of inflation.

With the RPI currently at 5.1 per cent and not expected to fall substantially until July — the relevant month for calculating new fares — that would mean an increase of about seven per cent.

The final decision will be taken by Mayor Boris Johnson, normally in September or October. He is free to depart from TfL's "planning assumptions".

However, last year he ignored the fact that RPI was minus 1.4 per cent in July, and imposed a 3.9 per cent increase on the Tube and 12.7 per cent rise on the buses. Jo deBank, spokeswoman for commuter group London TravelWatch, said: "We know there's a funding gap in TfL but we don't want to see people priced off public transport. It can't become too expensive to use."

TfL's fares revenue has been badly hit by the recession, with fewer people travelling. This financial year it has budgeted for 78 million fewer journeys — down two per cent on the previous year — but early indications suggest more people than expected are using the transport system. John Biggs, Labour chairman of the budget committee, said: "Londoners have already been hit by a hike in fares this year. We will assess whether further rises on the scale suggested today by Transport for London can really be justified."

Ken Livingstone, who is bidding to serve another term as Mayor, added: "While Boris Johnson enjoys the World Cup in South Africa, TfL is left to give Londoners the bad news."

A spokesman for the Mayor said this year's fare rises were partly because of the legacy of Mr Livingstone's eight years in office, adding: "The Mayor's aim has been to keep fares as affordable as possible, while protecting free and concessionary fares for London's elderly, young people, those on low incomes and those seeking work."

TfL stressed no final decision had been made. "While there is no set formula by which fares are decided, TfL's planning assumption will be that fares will rise by RPI plus two per cent each year. However, the actual level will be decided by the Mayor."