Transport for London fears only another short-term financial deal with government, Assembly hears

Transport for London fears only another short-term financial deal with government, Assembly hears

Transport for London’s next financial settlement with the government could be for three months only, according to Transport for London boss according to Andy Byford and Deputy Mayor for Transport Heidi Alexander speaking to the London Assembly’s transport committee yesterday.

With just three weeks before the capital’s beleaguered transport body anticipates again being on the brink of running out of cash as its current government bailout deal expires, Byford told Assembly Members that “we still don’t know how much we are going to get, how long the deal will be for and what the conditions will be.”

TfL had originally asked the government for a four-year deal, Byford said. “But we are not going to get that. I would still like to get a 12-month deal, but increasingly I think it will be a shorter deal than that,” he added.

It is no way to run a £10 billion organisation, he said. “We can’t carry on with these hand-to-mouth deals. We must move onto a more secure financial footing. I’ve implored government to see us as part of the solution. There is a real benefit in investing in transport to get London’s economy moving again.”

TfL was hard-hit last year as fares income, normally providing 72 per cent of the authority’s revenue, slumped – with Whitehall coming up two separate six-month deals totalling almost £3.5 billion to stave off collapse.

With a new cliff edge approaching, “needlessly political” negotiations with government could mean only enough cash for three months, said Alexander. And possible 30 per cent cuts in capital spending, which Whitehall had required TfL to spell out as part of its previous bailout, could mean “reckless” service cuts,” she warned. 

TfL’s ability to agree long-term contracts would be hampered and supply chains for new London Underground trains and electric buses would be hit, while urgent repairs to the Westway, Rotherhithe Tunnel and other jobs would be delayed, housing schemes held back and progress with major schemes, including Crossrail 2 and the Bakerloo line extension to Lewisham put on hold, she said.

Alexander and Byford confirmed that TfL’s “financial stability” plan submitted to Whitehall in January had sought £1.6 billion a year capital funding up to 2030, plus £3 billion a year revenue support before breaking even by 2023 by raising £500 million a year either by retaining Vehicle Excise Duty (VED) paid by Londoners or imposing a Greater London Boundary Charge on non-Londoners driving into the capital.

The controversial Boundary Charge, if set at £3.50 a day, or £5.50 for more polluting vehicles, would help tackle air pollution and congestion, reducing cross-border vehicle movements by between 10 and 15 per cent, Alexander said. Feasibility studies will be completed in the autumn.

Retaining VED cash, paid by London drivers but overwhelmingly spent on roads outside the capital at present, remains Mayor Khan’s first choice, Alexander said, despite ministers seeming to rule it out – heralding clashes to come as campaigning gets underway for May’s mayoral election.

Junior transport minister Baroness Vere last week repeated government objections to devolving VED, confirming in the Lords that TfL would be supported but also describing its plans as “drafted with a money-no-object mindset. The Mayor of London is going to have to think about his capital expenditure and service levels in the future. He may have to make difficult decisions,” she told peers.

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1 Comment

  1. Greg T says:

    “Three months” – or, in other words, until about the time of, or k=just after May’s Mayoral election, yes?
    I have zero time for Khan, who is proposing retrospective & punitive legislation, but deliberately punishing the whole of London for petty political spite is not a productive way to proceed

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