Skip to content
Tuesday 1 September 2026London --:--Frankfurt --:--Zurich --:--
NewslettersSearchEN · DE · FR
MorningWire

European business, markets and politics

FTSE 100
10,789.28
-0.32%
DAX
25,970.11
-1.10%
CAC 40
8,301.85
-0.39%
STOXX 50
6,368.98
-0.80%
  • Europe
  • Markets
  • Business
  • Economy
  • Regulation
  • Politics
  • Opinion
More
GermanyFranceEU InstitutionsCompetitionPublic AffairsBankingTechnologyEnergy
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Economy
  • Regulation
  • Politics
  • Opinion
  • DE
Thursday 04 January 2018 11:07 am

TfL faces funding crunch as bosses say end of government subsidy isn’t sustainable for London

By: Rebecca Smith

Add as a preferred source on Google

London’s transport funding crunch has been put back in the spotlight after Transport for London (TfL) bosses said yesterday that the withdrawal of government subsidy will not be sustainable for the capital in the long-term.

At a meeting of the London Assembly Budget and Performance Committee, they also revealed plans to sell part of TfL’s Tube fleet, which will then be leased back, in order to fund new Piccadilly Line trains.

The transport body has been battling a surprise dip in Tube passenger numbers – crucial as it's the only part of the public transport network to make a profit – as well as a fall in advertising revenue, and a decline in other operating income from the congestion charge.

Read more: Tube to get more reliable as TfL wraps up major upgrade work

2018-19 marks the first year in which TfL will receive no operating grant from the government, which had previously stood at around £700m a year. It has been winding down, with TfL receiving £228m in 2017-18.

London’s deputy mayor for transport, Val Shawcross, said:

It is the money on asset investment on the roads that has been particularly hit, I think, in the spending plans.

And there will be investment in safety and in repairs, but the damage being done financially onto cyclical maintenance on the roads, and I don’t think that’s sustainable for the long-term.

She added that she did not think the long-term impact on the London economy had been entirely thought through, and the issue was "business that we actually do have to address; it's not something which London can sustain with for a very long time".

TfL commissioner Mike Brown said: “When the A2 or the A3 cross the London boundary, on the outside of the London boundary there will be a contribution from vehicle excise duty nationally to Highways England to maintain and perform capital renewals on that part of the A2 or A3, or any other trunk road. As soon as it crosses the London boundary, there isn’t, and that just seems a real inconsistency to me.”

A spokesperson for the Department for Transport said: “We are taking the big decisions for Britain’s future and investing a record £23bn on our roads to improve journeys for motorists.

“It is the responsibility of the mayor to determine how Transport for London’s budget is spent.”

Concerns have been raised that the funding squeeze will also mean planned projects hit the buffers, after upgrades to the Northern and Jubilee Line were shelved in October to prioritise spending.

TfL has said it will continue to deliver upgrades and reaffirmed commitment to projects such as the Bakerloo Line extension, saying planning and development work will continue to progress.

Selling Tube trains and leasing them back

But its plan to raise £875m with the sale and leaseback of some of its train fleet to fund the purchasing of new rolling stock for the Piccadilly Line was branded "a sorry state of affairs" by London Assembly Liberal Democrat member Caroline Pidgeon.

A TfL spokesperson said: “As is perfectly standard and common practice across the rail industry, we are looking at whether we could sell and lease back some of TfL’s rolling stock, as we have previously done on London Overground. This would allow us to purchase new trains on London Underground’s Piccadilly line, where there is a clear need for a modern fleet.”

But Pidgeon added:

It does not make any sense and means for years the public purse will be paying a high price.

The only winner will be the lawyers as we saw with the failed PPP [public private partnership] on the Tube.

We need investment in our transport infrastructure not a costly PFI [private finance initiative] by the back door.

Read more: TfL says major Tube upgrades cancelled because of dip in passenger numbers

 

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News

Categories

  • Business
  • Transport & Infrastructure

Trending Articles

  • Vodafone and Deliveroo look to patch up Reform ties after Yusuf prison threats

  • Jaguar reveals the Type 01’s screen-free interior

  • Trio of firms poised to quit London Stock Exchange as exodus gathers pace

  • As it happened: FTSE 100 slides as bound rout deepens; Oil jumps as Trump vows more strikes on Iran

  • Green activists want to take Polanski down a dark road

More from Morning Wire

  • No air conditioning on the Tube? Blame Sadiq Khan

    Opinion
    Crowded London Underground platform during summer heat wave, passengers fanning themselves to stay cool
  • Councils accused of turning e-bike operators into ‘revenue stream’ as fees surge

    Transport & Infrastructure
    Lime faces growing scrutiny over its safety record.
  • Which is the smelliest Tube line?

    Opinion
    Passenger wearing a blue surgical mask and coat on a London Underground train.
  • Andy Burnham should show London he cares by funding this one transport project

    Opinion
    Andy Burnham, Mayor of Greater Manchester, standing outside 10 Downing Street in a suit and tie.
  • Burnham set for crunch decision on JP Morgan’s £10bn tower

    Banking
    Breaking news update with relevant statistics and graphs displayed on a digital screen, highlighting recent data trends.
  • TfL greenlights Wayve’s autonomous vehicles in the City

    Tech
    Wayve autonomous vehicle navigating a busy London street with iconic cityscape in the background
  • London doesn’t need more social housing, it needs more housing full stop

    Opinion
    Luxurious mansions surrounded by manicured gardens in an upscale residential neighborhood, highlighting opulent housing tr...
  • A global tram renaissance is underway. Why isn’t London jumping on board?

    Opinion
    London tram 1925 with Last Tram Week sign in front of the Houses of Parliament and Big Ben, 1952.
MorningWire

Independent European business, markets and political news for decision-makers.

Morning Briefing

Europe

  • Germany
  • France
  • EU Institutions
  • Europe

Business

  • Markets
  • Business
  • Economy
  • Regulation
  • Competition
  • Public Affairs

Editorial

  • Opinion
  • Editorial Policy
  • Corrections
  • Contact

Company

  • About Morning Wire
  • Privacy Policy
  • Terms of Use
  • Cookie Policy
© 2026 Morning Wire Ltd · Published by Morning Wire Media, Bahnhofstrasse 65, 8001 Zürich, Switzerland
Privacy · Terms · Cookies · Facebook