Transport for London – a restricted briefing note on funding

Transport for London – a restricted briefing note on funding

Transport for London chiefs have been pretty clear in public about the funding they think is  needed from the government in order to achieve the blessed state of “financial sustainability” by 2023, but it is nonetheless instructive to discover how the transport body presents its position in private.

Last week, TfL officials took part in a meeting with London business groups, trade union representatives, City Hall officials and London and Partners to discuss the capital’s economic recovery, and later sent out a three-page briefing note, marked “TfL restricted”, summarising its budgetary state of play and what it wants to happen next.

The document usefully sets out what TfL sees as the cost to the country of the series of short-term and conditional “agreements” it has negotiated with the government since the pandemic struck and slashed its all-important income from fares.

“The short-term nature of these agreements has not allowed us to engage our supply chain in an economic and efficient way,” its says, “leading to short-term extensions or deferrals of contracts which attract higher costs. The knock-on impact of this is limiting business growth, job creation and skills development”.

It observes that “in addition to the £36.1 billion London contributes to the Treasury each year”, TfL invests around £7 billion through its supply chain, “supporting tens of thousands of jobs across the UK from Falkirk to the Isle of Wight, from Scarborough to Ballymena”.

And it adds that ‘we have a pipeline of shovel ready projects that are both relatively modest in cost and enormous in impact and can ignite investment throughout the country, leveraging buying power to potentially reduce the net cost of investment for other transport authorities across the country, all while making progress on innovation, safety, air quality, decarbonisation and accessibility”.

What are the chances of the short-termism ending and the government helping TfL to help London get back on its feet?

The briefing stresses that the latest funding deal, which is due to expire on 24 June, “recognises the need to agree certainty and stability over our capital investment pipeline beyond June” and that discussions about TfL’s ideas for this are continuing.

TfL wants to “enter into a capital partnership of at least three years” with the government in order to avoid entering a “period of managed decline, which would have far-reaching effects across the country”. By “managed decline”, they mean not being able to afford to renew rolling stock, such as the 50-year-old Bakerloo Line trains, or upgrade signalling, along with a reduction of service levels.

The latest TfL budget, just published, is based on a “managed decline” scenario and, the briefing document says, requires “service reductions of 18% on the bus network and 9% on Tube and rail”. The latter, though, could be avoided with sufficient long-term capital funds, “as we will no longer need to divert our operating funding to meet our existing capital commitments”.

The document also states that “any agreement must give us the autonomy to plan our investments with our partners and stakeholders in the best interests of London and the UK” and that “the government must recognise that London’s transport network is strategic national infrastructure, which must be invested in to help drive growth across the UK” – and that TfL cannot meet those costs all on its own.

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Categories: Analysis

3 Comments

  1. Cezary Bednarski says:

    Public transport in London ought to be free for Londoners, and now is the very good time to look into this. Learning from the likes of Tallinn, Luxemburg and other cities

  2. Andrew Curry says:

    Of course, if we’re talking inclusive access to transport, it would be better not to cut bus services by twice as much as tube services.

  3. Rather Not Say says:

    As a procurement professional at TFL I can support what is said regarding the consequences of the lack of long term funding from central government. Materials are being bought on a short term, ad hoc basis at higher costs and any improvement or long term upgrades of assets are being shelved.

    The unofficial and unspoken policy is now fix on failure (runs things until they break, and then repair) which of course downgrades the service, and ends up being more costly to repair. Our suppliers are also feeling the pain on this and I know of a few (in the Red Wall Northern and Midland areas) that are close to going under. This would mean well paid, skilled jobs in these Tory target seats disappearing. Piss poor economics, and at odds with the “levelling up” concept.

    Would also add that morale within the professional, white collar, areas of TFL is on the floor. There are three distinct groupings in those that are stampeding for the exit, the long termers that are totally defeated but are waiting to see what the terms of the inevitable redundancies are and those that are seeing it out until they can retire. Really depressing to see what is happening at an organisation I used to be proud of working for.

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