Exclusive: TfL set for crunch talks as London bosses call on Sunak to solve cash crisis
Transport for London (TfL) is set to have an emergency finance meeting in the coming days as government bailout talks still have not produced a funding deal.
Multiple sources in City Hall said TfL is preparing to hold an “extraordinary finance meeting” before the end of the week, which has prompted fears the transport body is dangerously short on funds and that services could be cut.
Mayor of London Sadiq Khan said last month that TfL’s £1.6bn May bailout will run out on 17 October, which is just four days away.
He is now asking the government for a further £5.65bn over the next 18 months as Covid restrictions continue to depress Tube and bus passenger numbers.
A source in the mayor’s office told Morning Wire last week that around City Hall there was a “vague sense that [negotiations] are f****d” and the calling of an emergency finance meeting may indicate a deal will not be struck by the deadline.
It comes as some of the capital’s biggest businesses urge City Hall and Westminster to come together to get a good deal for the sake of the capital’s connectivity and competitiveness.
Tony Travers, professor of local government at the London School of Economics, said the meeting could lead to City Hall issuing a Section 114 notice, which would “likely mean a quite radical reduction in [TfL] services”.
Local governments have to issue a Section 114 notice and immediately make budget cuts if their cash reserves run below a certain point.
Adam Tyndall, programme director for connectivity at business group London First, said a forced cut in TfL services would be a disaster for the capital.
“Without a fully-funded transport network, the capital risks grinding to a halt, with huge knock-on effects for the country, its tax base, and our international standing,” he said.
“In order for London to continue to respond to the pandemic and play its unique role in the UK’s economic and social recovery, we urge the government to ensure a stable and sustainable funding package for TfL.”
Break the impasse
Tonight, top bosses from British Land, Compass Group, Canary Wharf Group and Heathrow airport have signed a letter to the chancellor pushing for a resolution to the stand-off.
“Full service levels are necessary both to support actual social distancing on public transport and to support the perception that services are not over crowded. Without sufficient funding, TfL will quickly reach a state where it cannot maintain this level,” it reads.
Conservative Cities of London and Westminster MP Nickie Aiken said it was “vital we have a transport system that supports the economy, especially central London”.
“It’s been appallingly mismanaged by the current mayor who has continually made promises he can’t keep,” she said.
A TfL spokesperson said no decision had been taken on a potential emergency finance meeting this week.
“We continue to discuss our immediate funding requirements with the government and hope these discussions can be concluded successfully soon, so we can help London through this next phase of the pandemic,” they said.
“We are doing what we can to minimise costs and aim to continue operating a full service across our network while our funding discussions continue.”
TfL’s revenues crashed by more than 90 per cent in March as the country was plunged into lockdown.
Near-empty Tube
Tube numbers have still not fully recovered and are more than 60 per cent below pre-crisis levels.
Bus journeys are at about half of pre-Covid levels.
Travers said “there was no question” the government had politicised negotiations with TfL in a way it had not with “other commuter or rail companies”.
Khan, a former Labour frontbencher in Westminster, has had a strained relationship with Number 10 and was earlier this year shut out of emergency Cobra meetings on Covid.
“For what appears to be political reasons – there’s a mayoral election next year – TfL have had much greater pressure applied on them by the government,” Travers said.
“I think the government may think they can negotiate down what it gives the mayor by doing this.”
A Department for Transport spokesperson said: “The government is engaging with Transport for London and the mayor on the impacts of Covid-19 on TfL’s finances. These discussions are ongoing and will ensure London has a safe, reliable network while delivering a fair deal to taxpayers.”