TfL gets short-term bailout extension to keep Tube and buses running

·5-min read
 (Getty Images)
(Getty Images)

Transport for London has been granted another short-term bailout extension to help keep the Tube and bus services running.

The Department for Transport has continued the current day-to-day funding deal, which was signed in February, for a further 15 days, until July 28.

This follows a 19-day extension last month.

It allows further time for DfT and TfL officials to seek to negotiate a deal for the remainder of the current financial year and continue work on a long-term capital funding plan to enable TfL to repair roads and bridges and upgrade Tube and bus infrastructure.

But there will be concerns that it is yet another “sticking plaster” that will make it impossible for TfL to enter into long-term deals and plan for the future.

Mayor Sadiq Khan said: “Today the Government has given TfL another short-term extension – of just a few weeks – to the current emergency funding deal.

“This short extension is only necessary because the Government has still not put forward any proposals for discussion on the long-term funding London needs.”

But he warned he was “growing increasingly concerned” that the lack of certainty would lead to “serious consequences”.

Last month the mayor warned that there could be a million fewer journeys a day by public transport due to the cuts likely to follow – including an 18 per cent reduction in the bus network.

Mr Khan added: “This is a £10bn transport authority that is crucial to supporting jobs and economic growth. Without a long term funding deal, TfL will have to prepare to make further painful cuts to London’s transport network - its ‘managed decline’ scenario.

"The devastating impact of the pandemic is the only reason TfL needs financial support. It is now imperative that the Government urgently works with me to agree a fair, long-term funding deal that will protect London’s transport network – not just for the sake of the capital, but the whole country."

Latest figures show that weekday Tube passenger numbers have plateaued at less than 75 per cent of pre-pandemic levels, while the number of weekday bus journeys is barely above 80 per cent.

But ridership is far higher at the weekend, when leisure activities have lured passengers back to the network.

One TfL chief said on Wednesday that the return to the office was “stubbornly slow”, with Mondays and Fridays showing the lowest number of passengers, reflecting changing working habits.

The Department for Transport again blamed TfL for the inability to strike a deal, saying it had not met all the conditions attached to previous bailouts.

Recently Mr Khan has made clear that he is not prepared to target the TfL pension scheme, despite the wish of Ministers for him to implement a review to cut its cost to farepayers.

A Department for Transport spokesman said: “For over two years we’ve shown our unwavering support to London and its transport network, providing over £5bn to keep vital transport services running and pledging over a billion pounds per year through Business Rates Retention at the most recent Spending Review - all at a time of significant pressure on the national finances.

“With the cost of living rising across the country and the Tube nearing pre-pandemic passenger levels, it’s more important than ever that we agree a settlement which represents value for money for all taxpayers while delivering for London.

“Despite already granting one extension, TfL have been unable to provide information sufficiently demonstrating that conditions outlined in the current settlement are on track and reassure the Government that any long-term settlement will be in the interest of all UK taxpayers – we have agreed to another extension of 15 days.”

Nick Rogers, Tory transport spokesman on the London Assembly, said: “When will the mayor start listening and finally supply what’s been asked of him?

“The Department for Transport has made it clear that until a plan for financial sustainability has been agreed, they are unable to provide a long-term funding deal for TfL. The Mayor has been repeatedly tasked with providing a workable plan and clear direction for TfL’s future financial sustainability and he is still yet to do so.

“Instead of scaremongering about ‘an era of managed decline’ he must make the difficult choices, including reforming TfL’s unjustifiably generous final salary pension scheme.”

The bailouts are designed to replace fares income that has been lost to TfL as a result of the pandemic. TfL also receives about £2bn a year in business rates.

A TfL spokesman said: "We continue to discuss our funding requirements with the Government. 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 essential London receives 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.

"We have today agreed with the Government that our existing funding agreement will be extended until 28 July so these discussions can be continued.

“Whilst in receipt of Government support, we have worked hard to progress all conditions placed on TfL, and continue to maintain that we have met them all.

“Working together, we must achieve a longer term capital funding settlement that ensures London’s transport network can remain reliable and efficient, can 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.

“We hope these discussions can be concluded successfully soon."

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