Government offers extension of emergency TfL funding deal until May
The government has today offered to extend its emergency funding deal with Transport for London (TfL) until May, ensuring that services will be able to continue running.
The proposed deal would be TfL’s third bailout in the past year, after the body’s revenue plummeted by more than 90 per cent last March during the first England lockdown.
A spokesperson for Sadiq Khan said the mayor would “work as quickly as possible” to determine if he should agree to the new deal.
“I’ve offered TfL an extension of the current emergency funding deal, until 18 May, on the same terms as now,” Shapps tweeted.
“This will ensure services continue to run across London and we’ll ensure a new deal is in place by May as the PM’s unlock roadmap progresses.”
A Khan spokesperson said: “We will work as quickly as possible to determine whether this is in Londoners’ best interests ahead of any final offer being received from the government.
“Ministers need to provide TfL with long-term financial sustainability to ensure London makes a rapid recovery to support the country’s recovery.”
TfL’s £1.7bn bailout from November was set to run out at the end of this month.
The last bailout forced Sadiq Khan to either cut TfL costs or find ways to raise more revenue to help better finance the transport body.
This resulted in an above inflation increase in Tube fare prices, a 10 per cent rise in council tax and a pledge to return to sustainable finances by 2023.
Khan has asked central government for a long-term funding settlement, with City Hall arguing that Tube and bus fares will not recover from the pandemic for years.
TfL commissioner Andy Byford has made it clear that a long-term deal is the “holy grail” for TfL, but that the network is “totally beholden” to the government on funding.
London minister Paul Scully told Morning Wire recently that a long-term deal will only be struck when Khan makes more cuts or finds more ways to raise revenue.
“I think there will be [a long-term settlement], it’s basically trying to work out what the shape of TfL is going to be moving forward – it’s difficult to tell at the moment,” he said.
“We have to put TfL on a level footing and that will be partly due to negotiations and support, it will be a lot to do with the mayor having to make some difficult decisions to repair the structural black hole that was in TfL finances before the pandemic.”