Transport for London rejected six-month funding offer from government because of ‘onerous’ strings attached

Transport for London rejected six-month funding offer from government because of ‘onerous’ strings attached

Sadiq Khan and the government remain at loggerheads over Transport for London funding, with a Whitehall offer of support until June having been rejected because the strings attached to it were “too onerous”, the London Assembly transport committee heard today.

With negotiations continuing, TfL chief Andy Byford would not be drawn on the detail of the disagreements, but said “we can’t just sign up to something that is undeliverable or unaffordable”. 

Liberal Democrat committee chair Caroline Pidgeon described what amounted to a six-month offer as “extraordinary”. Current funding for the beleaguered network was due to expire in December, but has now been extended to 18 February as the two sides seek to reach agreement.

The delay meant the clock was ticking on whether TfL can balance its books for 2022/23 – a legal requirement – the meeting heard. With passenger numbers still well below pre-Covid levels, the network is seeking £1.2 billion in revenue support to stay afloat over the coming year. 

Byford said the network’s bid for capital funding for major improvement projects, such as upgrading Piccadilly Line signalling is also a continuing stumbling block. TfL appears to be digging its heels in on this issue, after arguing it has met government demands to identify potential sources for some £500 million in new income in the form of a council tax hike, adjustments to fares and plans for new road user charges.

“The Mayor has stepped up with more revenue,” Byford said, but Whitehall, which cut TfL out of any capital funding in last autumn’s spending review, had needed more time to confirm its position despite what outgoing TfL finance chief Simon Kilonback described as a “line by line” discussion of major proposals. 

Khan’s new transport deputy Seb Dance (pictured) confirmed at the meeting that a consultation will be launched by April on plans to encourage a further shift away from private car use, including the controversial boundary charge on non-London registered vehicles entering the city as well as making the ultra-low emission zone city-wide.

Fare levels may also be at issue, with the government dropping its demand for a hike to the retail price index level plus one per cent, but requiring TfL to make up any subsequent shortfall without extra support which may force increases anyway. 

“For many Londoners any increase in the cost of travel is extremely difficult,” said Dance. “We are loath to do anything which increases the burden on passengers, particularly those on the lowest incomes.”

And there was a warning from Byford against demands for further cuts to the network. TfL was on track to meet an overall £730 million savings target on the Underground, having obeyed a government call for a £300 million cut in 2021/22, he said. “But there comes a point where the amount of savings is unrealistic or the risk too high.” 

The government remains committed to supporting TfL, transport secretary Grant Shapps said this week, announcing the latest bailout extension. But support is still conditional on TfL breaking even by April 2023. “The government continues to press the Mayor of London and TfL to take the decisions needed to put the organisation on a sustainable footing,” Shapps said.

Dance told the committee that continuing short-term deals meant TfL was left effectively “on life support”. He added: “We are only looking for the sort of support that every other government gives their capital city.” Kilonback said they have left TfL”paralysed”.

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