The long-term future of the capital’s transport network remains uncertain following a last-minute deal between the government and Transport for London announced today. The settlement provides £250 million of capital funding for 2024/25 – just half the amount TfL was seeking.
The deal was announced following months of negotiation and after TfL Commissioner Andy Lord warned TfL board members last week that continuing delay was holding up detailed business planning and budgeting for next year. He warned that the organisation was again facing “difficult choices” on service levels, renewals and “non-committed” spending.
The board heard that despite the pandemic’s dramatic impact on fare income, TfL is now heading to break even on operational costs by the end of March next year, and forecasting a surplus of £79 million. That meant the network was able to fund around three-quarters of its planned £1.9 billion capital investment programme for 2024/25, but needed Whitehall’s help with the final £475 million.
TfL priorities include new trains for the Docklands Light Railway and the 51-year-old Bakerloo line fleet – the oldest operating in the UK – as well as for work already contracted and underway for 94 replacement Piccadilly line trains alongside longer-term plans to extend the network across east and south-east London.
But the one-year deal confirms Whitehall’s continuing curb on TfL’s ability to develop these wider plans. The settlement, transport secretary Mark Harper says, “is to enable TfL to continue to deliver its current capital programme and its committed major capital projects, prioritising the Piccadilly line Upgrade Phase 1, and should not be used for any other purpose or to fund any new capital activity”.
The government will continue to check quarterly on TfL financial sustainability and efficiency, including “continuing work to reform its pension scheme” and maintain watchdog representation on TfL’s Board, the minister added.
While the one-year funding was welcome, Lord said, he also confirmed that TfL business plans would have to be reviewed. “We will now need to reassess our recent draft business plan and address the impact of the continuing shortfall in funding. That work is underway so that we can confirm as soon as possible what we will deliver for London,” he said.
Influential commercial lobby group BusinessLDN joined Lord in welcoming the deal, but calling for longer-term funding as well. “It is a relief that a one-year settlement has finally been reached,” said chief executive John Dickie. “This will provide some short-term certainty. But it is now important that a multi-year funding deal is agreed to enable London and suppliers across the country to plan for the future with confidence. A world-class public transport network is vital to keep London moving, retain its position as a global city and support jobs across the country.”
The Central London Forward group of 12 central and inner London boroughs also called for more. The new funding deal was greeted by its chair, Southwark Council leader Kieron Williams, as “welcome short-term relief” but stressed that it only amounted to half what was needed. “A sustainable, multi-year funding settlement is vital to London’s ability to plan for future success,” he added.
The limited deal also casts doubt on the government’s “Docklands 2.0” ambition, announced by levelling up secretary Michael Gove in July, for “tens of thousands” of new homes in east London supported by “better transport connections from east to west, to crowd in local and private investment”. It follows just £23 million for “bus rapid transit” in Thamesmead announced in Chancellor Jeremy Hunt’s Autumn Statement
Tory mayoral candidate Susan Hall nevertheless had no reservations. “I am so pleased that the government has stepped in and gifted TfL another £250 million, on top of the billions they’ve already given, to ensure we get the proper upgrades, despite Sadiq Khan’s wasteful spending,” she tweeted.
X/Twitter: Charles Wright and OnLondon. Support OnLondon.co.uk and its writers for just £5 a month of £50 a year and get things for your money too. Details HERE.