Draft consolidated budget 2005/2006 (Supplementary) [93]

Session date: 
January 26, 2005
Question By: 
Andrew Pelling
Organisation: 
GLA Conservatives
Asked Of: 
The Mayor

Question

You mentioned to us about the charge that I might be leading on the TfL budget, but one of the problems you have is that you have not properly valued the extra income that you are going to get from the buses and from the Congestion Charge, which will allow and permit this investment in London's transport systems. I am very concerned about two items. One is the advice that TfL are unable to put a value on the free Travelcards that they give to staff, former staff and contractors.

The other question is a very good question that John Biggs asked at a Budget Committee, where he expressed scepticism of the benefits of the financial discipline that the markets bring when at the same time you paid 0.28% more than was available at the Public Works Loans Board. What is your opinion on what is appropriate? If you were to borrow all that money at that kind of premium through the markets rather than the Public Works Loans Board itself, that would be a cost over 20 years, and not taking account of discounting the value on the present day, of about £120 million. Yet you think that the board has made the right decision to pay that kind of premium to go to the market.

Answer

Answer for Draft consolidated budget 2005/2006 (Supplementary) [93]

Answer for Draft consolidated budget 2005/2006 (Supplementary) [93]

Answered By: 
The Mayor

No, we do not have the slightest intention of borrowing all the money from the markets. My preference would be to borrow every penny we can from the Public Works Loans Board because it is slightly cheaper. What was important was to open the line of borrowing and establish the mechanism for that, because we may not always be able to borrow the money we require from the Public Works Loans Board. My preference will always be to get every penny you can from the Public Works Loans Board because it is cheaper but, clearly, you could hit a situation where Government was capping the lending of the Public Works Loan Board and then we would need to turn to the markets. We have opened that channel; we have worked the system and we were over-subscribed five times.