Loan taken out by GLA to save Crossrail would have put pressure on TfL's credit rating, finance boss admits

Alexandra Rogers
Follow Alexandra
Crossrail Project Reaches New Milestone With Completion of Elizabeth Line Track
TfL admitted that the delayed project could need an extra £2bn in rescue funding to stay afloat (Source: Getty)

The Greater London Authority (GLA) agreed to take on a £1.4bn loan to save Crossrail to protect Transport for London's (TfL) less robust credit rating, it has been admitted.

At a meeting of the London Assembly's budget and performance committee, chair of the transport committee Caroline Pidgeon asked why it was the GLA that was taking on the loan from government and not TfL.

The GLA's director of finance David Gallie said the GLA was "better placed" to take on the "large borrowing element".

"The debate turned upon ensuring that the GLA and TfL's credit rating could be maintained," he said. "It was a way of maximising all of our financial positions."

TfL's chief financial officer Simon Kilonback conceded that if TfL had taken on the loan it would have put pressure on its credit rating.

Last month TfL admitted that the delayed project could need an extra £2bn in rescue funding to stay afloat. The GLA agreed to contribute £1.4bn as a grant while a further contingency loan facility of up to £750m has been made available by the Department for Transport.

TfL faces a difficult year ahead for its finances in 2019. In its business plan unveiled at the end of the year, the transport body admitted its fare income will be £2.1bn lower than expected due to a £700m reduction in central government funding and a "subdued" economy.

It has, however, managed to reduce its £968m deficit by £200m by the end of the year and into 2019 due to a rigid programme of cost cutting.