The “end is in sight” for government bailouts of the capital’s transport system, Transport for London chief Andy Byford said yesterday, as he pressed for negotiations about the beleaguered network’s new bid for Whitehall support to begin.
TfL’s current £1.08 billion bailout expires on 11 December, and the network is now pitching for a further £1.7 billion in revenue support to take it through the next 15 months to April 2023.
It was a “considered, responsible and measured” bid, matching the government’s desire for an infrastructure-led recovery, tackling carbon emissions and “levelling up”, Byford told TfL’s finance committee.
It recognised that government support is finite, with TfL falling in line with Whitehall’s requirement to break even by April 2023, a year earlier than proposed in its own “financial sustainability plan” produced at the beginning of this year, Byford added.
TfL had reined in expectations as well in response to the pandemic-induced slump in its revenues, he said. “Big ticket” schemes including the Bakerloo line extension, the Sutton tramlink and Crossrail 2 had been stripped out of future plans, and key investments including new Piccadilly line signalling and replacing the Bakerloo line’s 50-year-old trains were now dependent on government decisions.
The funding bid proposes a multi-year “control” system for investment, with government capital funding of between £1 billion and £1.5 billion annually as a contribution to overall TfL investment of some £2.5 to £3 billion a year, supported by further “efficiencies” and Sadiq Khan’s controversial calls to retain the £500 million Vehicle Excise Duty raised in the capital or introduce a “boundary charge” on vehicles registered outside London entering the city.
Failure to secure a new deal would leave TfL “a month or a month and a half away” from running out of money, the committee heard. A funding shortfall would put the transport authority into a “a state of managed decline”, said finance chief Simon Kilonback.
Moving any faster to balance the books would mean the “wholesale butchery” of the bus network, he added. London TravelWatch, the official watchdog organisation representing the interests of transport users in and around the capital, warned last month that bus services could be an “easy target” for cuts.
TfL’s contribution to post-Covid recovery would also be threatened, Kilonback said. With 55 pence in every TfL pound spent outside London on planned train renewals and zero carbon buses, lack of further support would mean “holding up making commitments that could create jobs and economic activity throughout the UK”.
Board member Ben Story, chairing the meeting, reminded members that TfL had been on track to deliver an operating surplus by 2022-23, pre-pandemic. “There shouldn’t be a perception that this is a lazy, flabby, inefficient organisation that still wants the kind of things we wanted before Covid 19,” he said.
“It’s not blithely carrying on pretending there hasn’t been a crisis. It’s become enormously more efficient and is now cutting its cloth to suit the new environment,” the Rolls-Royce executive and former banker told the committee.
“The numbers look large, but then TfL is large, given the scale and breadth of what we do. This is a firm undertaking to get to core financial stability by 2023, with investment aligned around the government’s objectives.”
The full meeting can be viewed here. Photo from TfL spending review submission.