The Government agreed on 25 February to a fourth extraordinary funding settlement for Transport for London (TfL) worth £200 million, allowing the capital’s transport network to continue to operate while representing value for money for all taxpayers. The settlement will run until 24 June, to support the network as it recovers from the pandemic and continues to work towards long-term financial sustainability.
Recognising the need for stability and forward planning, the new deal also includes the potential for a longer-term capital investment settlement for TfL. This would be agreed ahead of the next financial year and will be dependent on the Mayor and TfL’s cooperation with the Government, including providing sufficient information regarding its capital investment plans and meeting conditions set out in the previous settlement.
The settlement follows three previous emergency funding packages and takes the Government’s support for TfL since March 2020 to almost £5 billion. This is on top of an additional pledge to provide over a billion pounds of capital investment every year in October’s Spending Review. Transport Secretary Grant Shapps said: “Over the past 2 years, the Government has repeatedly shown its commitment to London and the transport network it depends upon, by providing close to £5 billion in emergency funding.
“These support packages must be fair to all taxpayers and the settlement agreed today provides enough to cover lost revenue from the pandemic while the Mayor follows through on his promises to keep on the path to financial sustainability by 2023.”
As agreed in the latest funding settlement, the Mayor will consult on the options he believes will raise between £500 million and £1 billion of additional yearly revenue from 2023. He will also be outlining options to achieve operating cost savings of up to £400 million in 2022 to 2023 and delivering against TfL’s accelerated modernisation plan while making significant progress in moving its pension fund into a financially sustainable position. Throughout this period, the Government will continue to work with the Mayor to ensure London’s transport system delivers and contributes to the entire country’s economic recovery while maintaining the interests of national taxpayers.
Andy Byford, London’s Transport Commissioner, said: “Following discussions and negotiation over the last few weeks, I’m pleased that the Government has today confirmed an extension of its funding support for TfL through until 24 June 2022, for which we are grateful.
“The Mayor has already set out a range of proposals that will help support TfL’s financial sustainability in the future but it is essential that agreement is reached with Government on longer term capital support during this funding period. This is crucial for the coming years if a period of the ‘managed decline’ of London’s transport network is to be avoided.
“We will be meeting regularly to work towards agreement on the Government funding of the capital investment priorities shared by them, us and the Mayor. The Government has confirmed in this agreement that it supports the operation and maintenance of essential and safe transport services in London, enabling us to continue our full and vital contribution to economic recovery and to support the Government’s priorities on decarbonisation, air quality and making transport better for users.
“Working together, we must achieve this longer-term funding settlement. Only that would ensure London’s transport network can remain safe, efficient and reliable, can continue to support the jobs and new homes that rely upon it, and can support the economic recovery of the capital and the country as a whole.”
