New Transport for London government funding deal delayed again

The current short-term funding arrangement imposed on Transport for London by Boris Johnson’s government has been extended by a further two weeks until 18 February as the two sides have failed to settle on a new deal by today’s deadline.

The present financial support package for TfL was brought in at the start of June, with the government imposing a string of conditions in return for helping the capital’s strategic transport body cope with its huge loss of income from fares due to passengers avoiding using public transport during the pandemic. It was originally meant to expire on 11 December.

The conditions included central government telling the devolved authority to find £300 million in savings or from “new income sources” during the current financial year and to “identify new or increased sources of revenue” of between £500 million and £1 billion each year from 2023.

The conditions are widely seen as a means by which Johnson and his team can force their own policies on Sadiq Khan, including personal enthusiasms for riding bicycles, weakening the power of unions representing TfL staff, accelerating the introduction of automation on the London Underground and making Khan increase fares by more than he wants to.

At a broadcast briefing about Covid restrictions last month Johnson told journalists (57.10) his government’s aim was “to initiate a sensible and pragmatic fares policy and not the retrograde one that we saw at the early stage of the current Mayor’s term” – a reference to Khan delivering a manifesto pledge to freeze TfL fares for years, paid for by making efficiencies within the organisation.

Asked by the government to submit ideas for bringing in extra funds, TfL, in January 2021,  suggested it could generate an additional £500 million a year if it was allowed to retain vehicle excise duty raised in London – practically all of which is spent elsewhere in the country – or introduce a daily “boundary charge” of £3.50 on vehicles registered outside the capital entering the Greater London area. Both suggestions were quickly and publicly dismissed by transport secretary Grant Shapps.

TfL is now warning of a “managed decline” of the capital’s transport systems entailing reductions in service levels and an inability to maintain key bridges and tunnels. It has also warned that spending on “healthy streets” policies such as dedicated cycle lanes will have to be cut.

A TfL spokesperson said the extension is to enable discussions to be “concluded”. Khan said: “The pandemic is the only reason TfL is facing a financial crisis. I urge the government to engage with TfL and City Hall in good faith so that we can finally agree a fair, long-term funding deal that will protect London’s transport network – for the sake of the capital and the whole country.

“Some 43,000 jobs outside London depend on TfL’s investment. If the government fails to support TfL at this difficult time, it could impact TfL’s UK-wide supply chain, hitting jobs and growth and holding back the economic recovery in London and across the UK.”

On London is a small but influential website which strives to provide more of the kind of  journalism the capital city needs. Become a supporter for £5 a month or £50 a year and receive an action-packed weekly newsletter and free entry to online events. Details here.