London Tube

TfL in funding crisis as emergency extension on existing deal granted

Transport for London need to acquire a long-term funding deal from the Government, or we could see drastic impacts which could result in a million fewer public transport journeys per day, London Mayor Sadiq Khan has warned.

This news comes after the Government has granted the TfL a much-needed extension on the existing funding deal. This extension will last three weeks, culminating on the 13th July, to allow the daily services to maintain normality until a fifth bailout can be negotiated.

The Rail Industry Association (RIA) addressed the reports of this recent extension:

"It must be a concern for everyone who uses, pays for, or works on the railways and tube network in London, that today’s extension marks the eleventh ‘stop-gap’ funding settlement between the Government and TfL in just over two years.

“There clearly needs to be a longer-term deal and we strongly urge the DfT and TfL to negotiate a properly funded multi-annual settlement as soon as possible. Doing so will ensure that the work on vital rail upgrades can go ahead, which ultimately benefits passengers, boosts jobs and investment, and ensures value for money for the taxpayer. The longer this cycle of short-termism goes on, the harder it will be to affordably maintain and build the capital’s transport system, and support not just London’s economy into the future, but also the wider UK’s.”

This situation has created major tension between the mayor and the Government, as it is felt that the TfL is being neglected after receiving no response to its request of £900m to ensure its survival through the existing financial year. Before the 11th hour extension was granted, the current £200m deal was set to expire on the 24th June.

The frustrations from Mr Khan have led to the accusations of Prime Minister Boris Johnson Chancellor Rishi Sunak and Transport Secretary Grant Shapps of “treating Londoners with contempt” due to their inability to secure the requisite finances to secure public transport stability. However, it must be acknowledged that the Government have provided a substantial £5bn worth of bailouts since the pandemic ravaged the UK’s economic health.

The TfL have been consulting on the removal of 22 bus routes, whilst also reducing the availability on almost 60 more. These cuts to services are necessary after being forced into a “managed decline” scenario, as outline by Mr Khan. The drastic cuts would mean that tube services would also be dropped by around 10%, severely affecting accessibility around the city for commuters. Whilst we are in the middle of ongoing rail strike actions, it is imperative that more alterations to public transport

Mr Khan said: “Cuts on this scale have never been seen in London before.

“This is not sabre-rattling or scaremongering. It’s in TfL’s official budget.

“It’s no way to treat Londoners and the transport network they rely upon.”

Secretary of State for Transport of the United Kingdom Grant Shapps penned a letter addressing Mr Khan and his concerns, whilst confirming the current TfL deal is being extended until the 13th July.

Mr Shapps wrote:

“As we have told your officials for more than a year, we in fact think that cutting services should be your last resort, not your first, to achieve financial sustainability. We have consistently said that you should instead try to cut costs and generate revenue, including with more bus priority, which makes journeys faster and more reliable, allowing you to maintain the same frequencies with fewer buses and making services more attractive to passengers, bringing in more fare income.

“In short, the new cuts are not necessary and will not save much money. They have been artificially created by you as a political weapon in your campaign for a long-term capital funding deal.

“As you know, we do want to give TfL a longer-term capital deal. But your tactics are the wrong way to achieve one. They are harming London’s interests. If we are to make a longer-term funding commitment, you must keep your promises and we must be able to deal with you and TfL on a basis of honesty and seriousness, not campaigns of scaremongering and threats. TfL’s services are at no risk, unless you want them to be, and should not be undermined for political ends.

“As we have stated before, we will continue revenue support, in further temporary deals if necessary. We are extending the current deal until 13 July. We remain open to giving you a longer-term capital settlement. But it will require a reset of the relationship.”

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