Khan tries to build bridges in new £1bn TfL bailout

The Government and London mayor Sadiq Khan have agreed a new £1.08bn funding package to take Transport for London (TfL) through to December but ministers have insisted on reforms and savings that Mr Khan has said are unlikely to be deliverable.

The Department for Transport (DfT) said the bailout deal takes total government support to TfL since March 2020 to over £4bn and ‘sets out further measures to be taken to ensure TfL is financially sustainable by April 2023’.

It said that within the funding period to 11 December, Mr Khan has agreed to:

  • deliver £300m of savings or new income sources in 2021 to 2022
  • identify new or increased sources of revenue for TfL of between £0.5bn to £1bn each year from 2023
  • prepare a plan to accelerate TfL’s existing modernisation programme of £730m by April 2023
  • review TfL’s pensions scheme
  • prepare a revised medium-term capital investment programme
  • set aside at least £100m to continue the delivery of healthy streets and active travel programmes
  • carry out a joint review with government of demand on London’s transport network to ensure service levels are appropriate

In addition, ministers have secured what appears a fairly weak commitment that TfL will ‘work collaboratively with DfT on a joint programme for implementing higher levels of automatic train operation on the London Underground’.

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The DfT said it expects to draw up a memorandum of understanding with TfL and the London Borough of Hammersmith and Fulham to fund the re-opening of Hammersmith Bridge – ‘initially to pedestrians, cyclists and river traffic and, depending on cost, to motorists’.

However, it said costs ‘are to be led by the London Borough of Hammersmith and Fulham and TfL; HMG will not directly contribute more than one-third of the costs’.

Recently re-elected Mr Khan claimed that he had ‘successfully managed to see off the worst of the conditions the Government wanted to impose on London, which would not only have required huge cuts to transport services equivalent to cancelling one in five bus routes or closing a Tube line’.

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Standing up for Londoners? Sadiq Khan

He said: ‘I have tried to build bridges with the Government as this is in the best interest of Londoners and our businesses, but I want to be honest with Londoners: this is not the deal we wanted, but we have fought hard to get it to the best place possible and to ensure we can continue to run vital transport services at this crucial time for our city.

‘The Government is still insisting that TfL look at options to raise a further £500m to £1bn of revenue per year by 2023.

'I have been clear to the Government that there are very few options to do this and forcing TfL to impose draconian additional measures on London would be unacceptable. So I will continue to work with the Government to identify an appropriate source of funding.’

Transport secretary Grant Shapps said: ‘This £1.08bn financial package will support London and its transport network through the pandemic, and ensure it is a modern, efficient and viable network for the future.

‘Throughout this process, the Government has maintained that these support packages must be fair to taxpayers across the UK and on the condition that action is taken to put TfL on the path to long-term financial sustainability.’

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