The government has agreed a conditional funding and financing package for Transport for London [TfL] worth around £1.08 billion to continue to help it navigate the challenges of the Covid-19 pandemic.
The latest deal, which is the third financing package provided to TfL by the government, will ensure that London’s transport network will continue to receive financial support until December 11, 2021, providing further leeway for TfL to secure its longer term financial viability.
Combined with the previous two financial packages, the value of the government’s total financial support to TfL over the pandemic is now more than £4 billion.
Within the latest deal, TfL has committed to delivering value for money for taxpayers in its service and will better recognise the importance of London’s economy, building on promises made as part of the previous support packages.
TfL has also promised to take further action to ensure its financial sustainability by April 2023, including bring forward efficiency and cost-saving initiatives and identifying new or increased sources of revenue.
Under the latest funding deal, Mayor of London Sadiq Khan has agreed to several conditions, including delivering £300 million of savings or new income sources for TfL over the 2021 to 2022 financial year, identifying new or increased sources of revenue for TfL of between £0.5 billion to £1 billion each year from 2023, forming plans to accelerate TfL’s modernisation programme by April 2023, and reviewing TfL’s pensions scheme.
The Mayor has also pledged to draw up a revised medium-term capital investment programme, set aside a £100 million fund toward healthy streets and active travel programmes in the capital, and will conduct a joint review with government on the demand on London’s transport network to help ensure that service levels remain appropriate.
Transport secretary Grant Shapps commented: “This £1.08 billion financial package will support London and its transport network through the pandemic, and ensure it is a modern, efficient and viable network for the future.
“Throughout this process, the government has maintained that these support packages must be fair to taxpayers across the UK and on the condition that action is taken to put TfL on the path to long-term financial sustainability. As part of today’s settlement, the Mayor has agreed to further measures that will help ensure that.”
To modernise the London Underground, which is currently the oldest underground railway in the world, Khan will work with the government Department for Transport [DfT] on a joint programme for implementing higher levels of automatic train operation. There will also be renewed efforts between now and December this year to convert at least one London Underground line to full automation with an on-board attendant.
The government has said that automating the network will allow scope to provide a more punctual, reliable, customer-responsive and safe service, which is less prone to the consequences of human error.
Over the coming months, TfL will also lead a market engagement exercise into new technology that will be able to protect passengers on station platforms.
