The threat of a managed decline of all public transport in London has been averted after confirmation that Transport for London and the Department for Transport finally came to an agreement over a longer-term funding package. After months of a month here, a few weeks there and then days at a time of funding this new package will see transport in the capital supported until March 2024.
The package is said to be worth £1.2 billion and will help TfL’s passenger revenue to be guaranteed during this period, this preventing the need for a major reduction in services on all transport modes in London. This gives TfL more certainty of the resources they have available at a time when there remains uncertainty in passenger behaviour following the pandemic.
Confirming the agreement, Andy Byford, Transport for London Commissioner, said: “After weeks of negotiation, we have today reached agreement with Government on a funding settlement until 31 March 2024. 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. The agreement with Government means that across the funding period, TfL expects to receive further base funding of around £1.2bn from Government until March 2024 and gives TfL ongoing revenue support should passenger numbers not recover at the rate budgeted, which is crucial at this time of ongoing economic uncertainty. It helps us avoid large-scale cuts to services, and means that we will commit £3.6bn to capital investment over the period, with around £200m of new capital funding from Government beyond previously budgeted sources like business rates, which were devolved to the Mayor in 2017. The agreement also allows us to increase our asset renewal programme to help ensure our network remains reliable, and means we can restore our Healthy Streets programme, making our roads safer, and more attractive for those walking and cycling.”
“The support offered by Government left an unfunded gap in our budget, which we have been working hard to identify how we will fill. This work has made good progress and we are confident that we will achieve an outcome that allows us to balance our budget and maintain our minimum cash balance. We will need to progress with our plans to further modernise our organisation and make ourselves even more efficient, and we will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network. We are grateful for the support of both the Mayor and the Government as we now set out to continue serving the capital and investing in safe and reliable services for the millions of people who need them.”
As part of the agreement TfL have had to commit to savings of £90 million in 2022/23 and £140 million in 2023/24. This is in addition to previous commitments to save £730 million per year.
The funding agreement will allow TfL to deliver already committed investment, including the purchase of new trains for the Docklands Light Railway (and Piccadilly Line) as well as the investment in the Elizabeth Line and the Bank Station upgrade.