TfL accepts new bailout but wants long-term solution
A new funding package has been agreed for Transport for London, though the operator wants a long-term deal from the UK Government as passenger numbers remain low.
The UK Government and Mayor of London have agreed to extend the current Transport for London (TfL) funding deal, which will help keep services running as the operator continues to struggle with a catastrophic drop-off in passenger numbers.
The deal was due to run out on 31 March 2021, but the Department for Transport (DfT) says the extended deal will continue to support the capital and the transport network until 18 May 2021, when a new funding deal will be put in place.
The DfT says the extension comprises two additional funding payments totalling £260 million with a top-up grant available based on actual passenger revenues. This will take total government support for TfL to more than £3 billion since March 2020.
“The roadmap set out by the Prime Minister to cautiously and safely reopen society and our economy means we can better understand the potential recovery in passenger demand, ensuring we deliver a sensible and appropriate deal in the future,” the DfT said.
“As a result, and given the Mayoral election timetable, we have therefore agreed to roll over the existing funding deal until 18 May on the same terms as now, providing certainty over the pre-election period.
Together, the government and the newly elected Mayor will agree a new funding deal after the elections in May 2021. By this point, non-essential retail and other parts of the economy should be open and transport demand on the network will be considered when formulating a future settlement.”
There was hope from TfL that a more long-term solution would be agreed, as transport bosses continue to have anxieties over the speed at which passenger numbers will return to pre-pandmeic levels, if at all.
“We have today agreed with the Government that our funding will be extended until May 18 on the same terms that have applied to our funding for the second half of 2020/21,” a spokesperson told the Evening Standard.
“We continue discussions with the Government on our need for further financial support and a long-term capital funding deal.
The spokesperson added that this is “vital for us to support a strong and robust recovery from the pandemic, and to provide confidence to our UK-wide supply chain.”
“This seven-week extension will enable TfL to carry on running the safe, reliable and frequent services that will be vital as lockdown restrictions begin to ease,” said Mayor of London Sadiq Khan.
“These discussions will continue as it is essential that TfL has further financial support and a long-term capital funding deal that will allow it to support a strong and robust recovery for London and the UK.”
The new funding deal follows the £1.8 billion bailout agreed in November, as well as a £1.6 billion funding package which was negotiated back in May of 2020.