Housing supply will slump without TfL funding deal, Sadiq Khan warns

Sadiq Khan has made a new call on the government to provide sufficient long-term funding for Transport London by claiming that housing supply as well as transport services will be damaged if a satisfactory deal is not done, and accused Boris Johnson’s administration of a “dereliction of duty” to the country.

With the current short-term support deal due to expire on 11 December the Mayor says the building of thousands of homes planned for parts of Barnet, Newham, Southwark, Greenwich and elsewhere would be put at risk if money for new and improved stations is not available, as their supply is dependent on local transport infrastructure being enhanced.

Linking London’s economic recovery to that of the UK, Khan said “failing to adequately fund TfL is a dereliction of the government’s duty to our capital city, the people of London and the country as a whole. There can be no national economic recovery without a London recovery and there can be no London recovery without a properly funded public transport network in the capital”.

City Hall gives a 6,000-home scheme at Colindale station and a potential 30,000 new dwellings dependent on extensions of the Docklands Light Railway towards Thamesmead and Beckton as examples of programmes that could be at risk if TfL has to embark on a “managed decline” approach to its networks, as set out in a recent report for its finance committee.

Khan told think tank Centre For London’s annual conference last Tuesday that government officials had not even begun discussions with TfL counterparts despite there being just 11 days left to reach a new agreement at that time.

Exasperation with the government’s attitude to TfL has also been expressed in a letter to chancellor Rishi Sunak from 80 London businesses and others, coordinated by business group London First. It voices “serious concerns” that “levelling down the country’s most powerful economic engine would hold back the UK’s economic recovery”.

TfL is seeking further support to keep services running until the end of the financial year next spring and around £1.2 billion more for 2022/23 as well as money for capital investment in often ageing technology, tunnels and buildings.

A collapse in revenue from fares, particularly at the start of the pandemic as Londoners followed government instructions to stay at home, devastated the finances of the transport body, which is heavily dependent on passengers using its services. In October 2020, Johnson claimed that TfL’s financial difficulties were “entirely the responsibility” of Khan.

The government provided an initial £1.6 billion in May 2020 and a potential further £1 billion from the start of last November, with that arrangement extended in March and mid-May of this year. The current “settlement” for £1.1 billion was approved at the beginning of June.

Each of these deals has had strings of government conditions attached, ranging from reductions in fare concessions and an increase in the level and operating hours of the congestion charge, to demands for further savings within the organisation on top of those already achieved under Khan, to requirements to spend money on “active travel” schemes favoured by the Prime Minister’s transport adviser, the former journalist Andrew Gilligan, who is understood to be heavily involved with the government’s handling of TfL.

In June 2020 the Department for Transport commissioned a review of TfL’s finances by accountancy firm KPMG but has declined to publish it and has allowed TfL commissioner Andy Byford to see only part of it.

Responding to the letter to Sunak from business leaders, a government spokesperson told the Sunday Times that “any support” for TfL will be provided “in a way that is fair to taxpayers across the country”. Government figures show that up to £40 billion of taxes raised in London are spent in other parts of the UK every year.

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