After weeks of negotiations and numerous short-term extensions, TfL has finally agreed a two-year funding deal with the Government for the Capital’s bus and rail networks
On Tuesday 30 August Transport for London (TfL) issued an update on its funding agreement with the Government. TfL Commissioner Andy Byford said: “After weeks of negotiation, we have today reached agreement with Government on a funding settlement until 31 March 2024. This agreement, which was hard won, means that we can now get on with the job of supporting London’s recovery from the pandemic – to the benefit of the whole country. There is no UK recovery without a London recovery, and no London recovery without a properly funded transport network.
“The agreement with the Government means that across the funding period, TfL expects to receive further base funding of around £1.2bn until March 2024 and gives TfL ongoing revenue support should passenger numbers not recover at the rate budgeted, which is crucial at this time of ongoing economic uncertainty. It helps us avoid large-scale cuts to services, and means that we will commit £3.6bn to capital investment over the period, with around £200m of new capital funding from Government beyond previously budgeted sources like business rates, which were devolved to the Mayor in 2017. The agreement also allows us to increase our asset renewal programme to help ensure our network remains reliable, and means we can restore our Healthy Streets programme, making our roads safer and more attractive for those walking and cycling.
“The support offered by Government left an unfunded gap in our budget, which we have been working hard to identify how we will fill. This work has made good progress and we are confident that we will achieve an outcome that allows us to balance our budget and maintain our minimum cash balance. We will need to progress with our plans to further modernise our organisation and make ourselves even more efficient, and we will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network. We are grateful for the support of both the Mayor and the Government as we now set out to continue serving the capital and investing in safe and reliable services for the millions of people who need them.”
Grant Shapps tweeted in response to the funding deal: “Today I agreed a long-term settlement with TfL, which will support nearly £3.6bn of projects & bring total funding to over £6bn in a way that is fair to all taxpayers. The Mayor must now follow through on his promises to keep TfL on the path to financial sustainability by 2023.”
Mayor of London Sadiq Khan said: “This funding agreement comes after more than a month of tough negotiations because I’ve been determined to stand up for London and to fight for our transport network, which so many Londoners and businesses rely upon.
“The good news is that we have managed to win a number of key concessions from the Government, which mean we will be able to avoid TfL having to make the devasting cuts to vital transport services previously proposed – moving us away from the managed decline of London’s transport network.
“However, I want to be frank with Londoners – this deal is far from ideal. The Government is still leaving TfL with a significant funding gap, meaning we will likely have to increase fares in the future and still proceed with some cuts to bus services. There are also onerous strings attached, such as the Government’s condition requiring TfL to come up with options for reform of TfL’s pension scheme at pace, which could well lead to more industrial action and more disruption for commuters.
“These are things we have had no choice but to accept in order to get the deal over the line to avoid TfL becoming bankrupt, to save the jobs of thousands of transport workers and to keep trains, tubes and buses running across our city. The sole cause of TfL’s financial crisis was the impact of the pandemic so it’s simply wrong to punish Londoners and transport workers in this way. Levelling up the country should not be about levelling down London.
“We will now be working flat out to mitigate the impact of the conditions required by the Government so that we can maintain a world-class transport network in our city, which is so crucial as we strive to continue building a greener, fairer and more prosperous London for everyone.”
