Transport for London will receive up to £1.8 billion from the government in further emergency funding for the next six months and will not have to extend the capital’s congestion charge zone or scrap its free travel concessions for young people and the over-60s as a condition of receiving the funds, Sadiq Khan has announced.
However, the settlement, which Mayor Khan has described as “not ideal”, requires TfL to make further in-year savings, raise fares by more than the rate of inflation – as was set out under the terms of the previous bailout in May – and also to consider what City Hall calls a “modest increase in Council Tax” along with making permanent the temporary changes to the current Congestion Charging zone that were introduced in June.
The £1.8 billion will comprise a core sum of £1 billion, of which £905 million will be a grant, with more to be determined according to how much fare revenue comes in during the months ahead. TfL will need to make cost savings of £160 million towards closing the gap between the potential £1.8 billion for the second half of this financial year and the £2 billion it believes it needs in order to maintain full services for that period. BBC London’s Tom Edwards has reported that how the free travel concessions will be paid for must be decided by 11 January.
The deal still means fares will have to be increased by the rate of inflation plus 1% but not by more than that, which was one of the options the government had put on the table. Free travel for under-18s, which was supposed to have been temporarily suspended under the terms of the first bailout but hasn’t been for technical reasons, will be retained under the new agreement.
City Hall also says it has “successfully defeated” the government over scrapping TfL’s 60+ Oyster free travel card. , which was introduced in 2012 by Boris Johnson when he was Mayor. However, the restriction on holders of this card making use of them before 09:00 remains in place and also continues to apply to the Older Persons’ Freedom Pass, which is accepted by TfL but not funded by them.
The new funding deal was clinched at a quarter to midnight last night, much as the May bailout settlement was agreed with just minutes to go before a deadline which, had it been missed, would have seen TfL formally declaring itself unable to provide any more than the most basic statutory services at that time.
TfL had previously asked for a further deal worth £2.9 to see it through 2021/22, but that did not become part of the negotiations. The new short-term deal will expire shortly before the rescheduled London Mayor election in May next year. Throughout the discussions, TfL, including its commissioner Andy Byford, were not allowed to see a full version of a review of their finances conducted for the government by financial services company KPMG.
In a statement about the new deal, Khan said he was “pleased that we have succeeded in killing off the very worst government proposals,” which at the start of last month had included an 18-fold increase in the size of the Congestion Charge zone to the North and South Circular roads, causing alarm among Conservative Outer London MPs.
Khan also slammed the negotiations between TfL and government as “an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs.”
In June, Khan temporarily raised the level of the daily charge to £15 and expanded its operating scope to include weekends and running until 10.00 pm. The terms of the May bailout required him and TfL to bring forward proposals for increasing congestion charge revenue by such means.
On London has been told by a source close to the first bailout negotiations that those were the exact proposals made to the DfT, and that they were warmly welcomed by Boris Johnson’s transport adviser and former media supporter Andrew Gilligan.
The removal from the new funding deal of the previous one’s requirement to temporarily suspend the long-standing provision of free public transport travel for under-18s will be seen at City Hall as a defeat for Gilligan, who has been a strong influence on the government’s approach to supporting TfL, which saw its income collapse due to passengers deserting public transport during the first coronavirus lockdown.
Gilligan, a keen cyclist, who Johnson appointed as his “cycling commissioner” in 2013 when he was London Mayor despite Gilligan having no prior experience of delivering transport projects, was a prominent public critic of Khan prior to taking up his current role for Johnson.
He is understood to have been strongly in favour of curbing under-18 travel, a concession introduced by London’s first Mayor, Ken Livingstone, whom Gilligan frequently attacked when working for the Evening Standard and the Daily Telegraph as a journalist. The terms of the May bailout said the under-18s’ concession should be suspended, subject to discussions about how it would be “operationalised”.
Under the terms of the first bailout Gilligan was named as one of two government “special representatives” whom it was agreed would “attend all TfL board meetings”. However, he failed to appear at the board meeting held on 21 October, prompting Khan to say of Gilligan that he was “shocked he can’t be bothered to turn up” when he was “closely involved” in the TfL-government negotiations. Gilligan was described as being in attendance at the previous TfL board meeting, which was conducted remotely, but he made no contribution to the five-hour gathering.
Last updated at 11:29 on 1 November 2020.
OnLondon.co.uk exists to provide fair and thorough coverage of the UK capital’s politics, development and culture. It depends greatly on donations from readers. Give £5 a month or £50 a year and you will receive the On London Extra Thursday email, which rounds up London news, views and information from a wide range of sources. Click here to donate directly or contact firstname.lastname@example.org for bank account details. Thanks.