Downing Street adviser and former City Hall cycling tsar Andrew Gilligan clashed with Transport for London officials and Sadiq Khan today as the TfL board heard details of a further £4.9 billion funding shortfall over the coming two years.
The exchange, which took place three hours into the meeting, marked Gilligan’s first and only contribution to a board meeting so far since his appointment to the board as an observer, following the government’s initial £1.6 billion bailout for the stricken network in May.
It came as TfL and City Hall, fresh from down-to-the-wire negotiations over current funding both for the network itself and for the much-delayed Crossrail scheme, gear up for urgent New Year talks on both 2021/22 funding and longer-term arrangements, with an 11 January deadline for submitting proposals to Whitehall.
The inauspicious exchanges saw Gilligan reporting Whitehall unhappiness that the TfL budget proposals had not gone to the government before being made public, warning: “We need to avoid this kind of thing because it’s going to impact our relationship in the future.”
TfL faces “tough times ahead” due to continuing shortfalls in fare revenue – which normally making up 72% – of network income – and a fall in business rate yield, TfL finance chief Simon Kilonback told the meeting. “We are going to require ongoing government support in the short and medium term while we work with government for a more stable longer-term sustainable funding solution.”
His budget forecasts show TfL requiring not only £3.1 billion funding in 2021/22 and £1.8 billion the following year, but ongoing support estimated at between £1.5 billion and £2 billion a year thereafter, with vital maintenance along with investment to aid recovery and supply chain prospects all at risk if adequate funding cannot not be agreed.
But government is “not pleased” that TfL, despite being dependent on government bailouts, had failed to share its budget figures with Whitehall before the meeting, said Gilligan. “We didn’t see this paperwork until it was published on the website. We would have welcomed the opportunity to discuss it with you beforehand. We’re not particularly excited about the way it was done. I just want to make that point.”
TfL had had five weeks to discuss budget plans with Whitehall since its second £1.8 billion bailout deal was agreed with government, Gilligan added. “We are really not pleased about the way this was handled, and that is a feeling across the department, across government,” he said. “And I want to put that on record in a public forum.”
His remarks suggested “a fundamental lack of understanding of the governance of this organisation,” Kilonback retorted. “This board has to approve things before we can share them with government. We want to work with you collegiately, but you need to understand the amount of work you are asking us to do rather than making sweeping judgements about how quickly things can be handed to you.”
He added: “Look Andrew, we have tried under huge pressure to do this as quickly as possible. We only had a settlement on 31 October. Had we had it when we asked for it, earlier, there would have been more time to work with you all on these things. I’m not going to apologise for how we’ve done this.” Khan said to the adviser: “We’ve noted that you’re not excited…maybe could do a deal swifter than we did it this time.”
In a further testy intervention, Kilonback said that the budget plans were in line with government requirements, but “refined for actual deliverability not just cutting costs”.
TfL had reduced recurrent costs by more than £1 billion in the five years before the pandemic struck, and is committed to further £160 million savings under its second bailout deal, on top of £400 million saving previously agreed for 2020/21, he said, adding: “We have to make it extremely clear that we have an income problem not a cost problem in this organisation.”
TfL boss Andy Byford, who earlier thanked Gilligan for help in securing this month’s £825 million Crossrail deal, said that budget papers had been circulated “in the normal way” before the meeting. “There is governance here which we are bound to follow,” he confirmed.
An independent review commissioned by Mayor Khan in July to map out sustainable funding options for TfL will be published before the end of the year, Byford said, with its findings informing the January submission on long-term financing funding and financing. “We are going to hit that deadline, and it will be a worthy submission,” he said.
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