TfL crisis: Emergency bailout to keep Tube and bus services running extended to February

 (AFP via Getty Images)
(AFP via Getty Images)

An emergency Government bailout to keep Tube and bus services running has been continued until February, Transport for London announced on Friday night.

Its third bailout was due to expire at midnight on Friday but agreement was secured with the Department for Transport for its day-to-day support package to continue until February 4.

But Mayor Sadiq Khan said “nothing had changed” in terms of TfL’s longer-term funding and he was still having to consider major cuts to Tube and bus services.

About 100 bus routes are facing the axe, 200 more could have frequencies reduced and Mr Khan has warned that an entire Tube line may have to close, with the Underground cut by nine per cent, to help balance TfL’s books.

This is under a so-called “managed decline” strategy being pursued by TfL as it tries to achieve financial sustainability – despite having had its fares income decimated by the pandemic.

Government sources said extending the bailout until February would allow Ministers time to assess the impact of the Omicron variant on travel patterns and TfL’s fares.

The extension of TfL’s current funding deal – its third bailout – was announced by TfL commissioner Andy Byford.

He said: “The Government has today confirmed an extension of its funding support for TfL through until 4 February, for which we are grateful. The Mayor has also set out a range of proposals that will help support TfL’s financial sustainability.

“There is no UK recovery from the pandemic without a London recovery and there is no London recovery without a properly funded transport network in the capital.

“It is therefore essential that discussions with Government continue so that we can agree the sustained long-term Government funding that is vital for the coming years if a period of ‘managed decline’ of London’s transport network is to be avoided….This vital job is far from done.”

It is understood that Mr Khan met Government officials this morning. He has submitted a list of money-raising proposals for TfL but has been asked to provide more detail, in particular about how he proposes to raise more cash from road user pricing.

On Wednesday night Mr Khan unveiled a series of proposals, including hiking average council tax bills for £20 a year for three years, to help TfL break even by 2023, as required by Ministers.

But he caused huge controversy on Thursday morning by then announcing that the congestion charge’s operating hours would no longer extend until 10pm each night – reducing TfL’s C-charge income by £60m to £70m a year.

Mr Khan faced a backlash - including from Labour councillors - over his C-charge proposals.

On Friday night Mr Khan said: “The Government is still refusing to properly fund Transport for London which has been severely affected by Covid, yet again only providing a short-term funding deal that will only last a matter of weeks.

“This means that nothing has changed in terms of TfL having to plan on the basis of a managed decline of the capital’s public transport network.

“As a condition of the emergency short-term funding TfL needs to avoid collapse, the Government is forcing us to raise additional revenue in London through measures, like council tax, that will unfairly punish Londoners for the way the pandemic has hit our transport network.

“Despite these measures, only a long-term funding deal with the Government, including additional capital funding, will be enough to avoid significant and damaging cuts to tube and bus services.

“The Government’s short-term deals are trapping TfL on life support, rather than putting it on a path to long-term sustainability. This damaging, unnecessary and clearly politically driven approach cannot continue.

“Over the next seven weeks, I urge Ministers to start engaging with TfL and City Hall in good faith so that we can finally agree a long-term funding deal that will protect London’s transport network – for the sake of the capital and the whole country.”

This week morning Tube rush hour numbers have fallen below 50 per cent of pre-pandemic travel. A 32-hour Tube strike starting on Friday evening will cause further financial woe for TfL.

A Department for Transport spokesman said: “We have repeatedly shown our commitment to supporting London’s transport network through the pandemic, providing more than £4bn in emergency funding to Transport for London to keep essential services running, to enable businesses to operate and key workers to continue their critical work in the capital.

“We have now received the Mayor’s list of proposals which can move TfL towards a financially sustainable future, in a way that is fair to the national taxpayer. Given these were provided three weeks past the original deadline, we have agreed an extension of the current funding settlement until February. However, further details will need to be provided by 19 January. This ensures we can fully assess these options before beginning discussions on a new funding settlement, to include a capital settlement, with TfL.

“The Government remains committed to supporting London - and the transport network on which it depends - whilst also balancing fairness to national taxpayers. This extension provides continued support to TfL and certainty to Londoners over the Christmas and New Year period and as the booster programme is rolled out.”