Transport for London on Tuesday reached a multi-billion-pound bailout deal with Government that will avoid the capital’s transport system falling into “managed decline”.
City Hall bosses have been locked in intense negotiations with Government staff for weeks to secure an agreement.
They rejected three deals which they said would have led to TfL issuing a “catastrophic” section 114 notice, meaning shut downs and mass closures across the network.
The capital’s tube and bus services were propped up during the pandemic with £5billion of funding signed off by ministers.
But income from fares has remained some 20 per cent below pre-Covid levels, putting extreme pressure on TfL’s finances.
The new agreement includes £3.6billion for maintenance and infrastructure projects and will see TfL reinstate its Healthy Streets programme, which helped encourages walking and cycling.
However Mayor Sadiq Khan said the settlement was “far from ideal” and left the network needing to find £230million by April 2024.
“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,” Mr Khan said.
TfL chiefs still also face tough negotiations with unions, who ground the network to a halt during multiple days of strike action this year in an ongoing dispute over pay, pensions and contract terms and conditions.
Mr Khan added: “There are onerous strings attached [to the deal], 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.”
Transport Secretary Grant Shapps said the Government deal delivers for Londoners as well as tax payers living elsewhere in the country.
It includes cash for a “number of projects set to revolutionise travel across London”, including brand new Piccadilly line trains, as well as modernisations and upgrades across the District, Metropolitan, Hammersmith and City and Circle lines.
“For over two years now we’ve time and again shown our unwavering commitment to London and the transport network it depends on, but we have to be fair to taxpayers across the entire country,” Mr Shapps said.
“This deal more than delivers for Londoners and even matches the Mayor’s own pre-pandemic spending plans but for this to work, the Mayor must follow through on his promises to get TfL back on a steady financial footing, stop relying on Government bailouts and take responsibility for his actions.”
Transport for London Commissioner Andy Byford added: “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.”