Updated: Nov 2, 2020
The Mayor of London has reached an eleventh-hour agreement with the Government on a funding deal to keep tube, bus and other TfL services in the capital running until March 2021.
Sadiq Khan said the deal was "not ideal” but added: "We fought hard against this Government which is so determined to punish our city for doing the right thing to tackle Covid-19. The only reason TfL needs government support is because its fares income has almost dried up since March.”
TfL have said the Mayor has succeeded in “killing off the very worst Government proposals“, which were confirmed in writing by the Transport Secretary during the negotiations. The Mayor had rejected the extension of the £15 daily Congestion Charge to the North and South circular roads as ministers had wanted – in a proposal which would have hit four million more Londoners hard. The Government has now backed down from this condition.
The Government wanted to scrap free travel for under-18s and over-60s. These proposals have also been defeated. The Government also wanted TfL fares to rise by more than the previously agreed RPI+1 per cent. Again, this has also been successfully fought off.
The deal makes around £1.8 billion of government grant and borrowing available on current projections to TfL in the second half of this financial year. Transport for London will itself make up through cost savings the £160million gap the deal leaves from the nearly £2 billion the organisation projects it will need to run the tube, bus and other TfL services for the remainder of this financial year.
As part of the deal, London will also have to raise extra money in future years. Decisions about how this additional funding will be raised are yet to be made by the Mayor, but some of the options that he and the Government have agreed to be looked at include a modest increase in council tax, pending the appropriate consultation, as well as keeping in place the temporary changes to the central London Congestion Charge that were introduced in June 2020, subject to consultation.
Despite providing the private rail operating companies with 18 months of funding with no conditions attached, the Government has refused to give TfL more than a six-month deal and even this has come with conditions. This means another financial agreement will have to be negotiated just before next year’s mayoral election, a far from ideal time to negotiate a fair long-term deal for London, TfL has said.
The Mayor of London, Sadiq Khan said: “These negotiations with Government have been an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs.
“The pandemic has had the same impact on the finances of the privatised rail companies as it has had on TfL and the Government immediately bailed them out for 18 months with no strings attached. There is simply no reason why the same easy solution could not have been applied to London, which would have allowed us all to focus on the issues that matter most to Londoners, which are tackling the virus and protecting jobs.
“I am pleased that we have succeeded in killing off the very worst Government proposals.
"These proposals from the Government would have hammered Londoners by massively expanding the congestion charge zone, scrapping free travel for older and younger Londoners and increasing TfL fares by more than RPI+1. I am determined that none of this will now happen.
"This is not a perfect deal, but we fought hard to get to the best possible place. The only reason TfL needs Government support is because almost all our fares income has dried up since March as Londoners have done the right thing.”