Another financial settlement for Transport for London – but it still only goes to June

The Department for Transport and Transport for London have come to agreement on a new financial settlement which brings the total support for TfL from central government since the start of pandemic close to £5 billion. However, it is still not the long-term settlement that TfL had been hoping for with the government saying any longer term deal is dependent on the Mayor of London and TfL’s cooperation on making the organisation financially sustainable.

This package is worth £200 million and will allow the existing transport network in the capital – including London Tramlink and the Docklands Light Railway – to continue to operate and is also said to represent value for money for the taxpayer. This settlement runs until 24th June 2022.

Grant Shapps, Secretary of State for Transport, said: “Over the past two 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 TfL on the path to financial sustainability by 2023.”

As part of the settlement the Mayor has agreed to 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 savings of up to £400 million in 2022-2023 and delivering against TfL’s accelerated modernization plan while making significant progress in moving the pension fund into a financially sustainable position.

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. 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. 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 they support 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.”

The government and Mayor and TfL will now continue to work closely to ensure complete a long-term settlement that allows the capital’s transport system to deliver for Londoners and contributing to the entire country’s  economic recovery.

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