London’s politicians and business leaders called on the government and Transport for London (TfL) to end the “political games” and agree a long-term funding deal for the network as the latest round of negotiations reached their final hours.
Tomorrow the latest extension to the last funding deal runs out, leaving the operator once again without long term assurances over its finances.
Ministers have twice extended the six-month deal that was agreed at the end of October, while TfL has been pushing for a multi-year settlement.
But City A.M. understands that the network is likely to be presented with another short-term extension, rather than a long-term deal.
TfL and the Department for Transport (DfT) said that negotiations were ongoing.
The prospect of another temporary deal has dismayed both politicians and business leaders, who said that the body needed the security of a long-term arrangement.
Caroline Pidgeon AM, Liberal Democrat London Assembly Member and Chair of the London Assembly’s Transport Committee, told City A.M.:
“Short term finance settlements are the last thing TfL and London needs. The ability to plan ahead is critical for everyone involved in delivering transport services.
“It is time that the political games ended and TfL was treated in an equal way to the private train operating companies”, she added, referencing the £8.7bn rail firms had received in government funding since the start of the pandemic.
Thus far, TfL, which derives the vast majority of its revenue from fares, has been bailed out to the tune of over £3bn.
Passenger numbers remain far below pre-pandemic levels, although the body’s latest statistics show a rise in ridership in the last week.
For the coming year, TfL has said it will need £3bn in operational support, and is also seeking £1.6bn a year in capital spending support between 2023 and 2030.
Keith Prince AM, GLA Conservative Transport Spokesman, told City A.M. that the time had come for the two sides to work “constructively… to get Transport for London back on its feet”.
“Whether another short deal or long-term solution is announced tomorrow, the government will help TfL cover the cost of coronavirus”, he added.
“But, no one wants to pay the bill for Khan’s waste. If the Mayor is serious about fixing TfL’s finances, he must reform the transport network’s extortionate pensions, perks and bonuses.”
London mayor Sadiq Khan have repeatedly clashed over a bailout over the last year, with Shapps slapping down City Hall proposals that would have allowed TfL to raise £500m from keeping the proportion of Vehicle Excise Duty (VED) derived from London cars.
He also rejected proposals for a London boundary charge, saying it would violate the principle of no taxation without representation.
But after over a year of continued bailout negotiations, businesses said that the only way to give anxious firms certainty was for the two sides to come up with a long-term deal.
Richard Burge, chief executive of London Chamber of Commerce and Industry, said: “These short-term funding deals bring us back to the same point of an imminent deadline and more uncertainty.
“I’ve no doubt that there is careful monitoring of passenger numbers and revenue going on during each of these agreements, but the reality is that lower commuter and tourist footfall into central London means that the financial model for TfL is going to have to change in order for it to adapt to the coming years.
“As passenger journeys, including those into Whitehall, increase with the eventual removal of the work from home guidance, the government and TfL must move beyond these emergency deals and look at the medium to longer-term model.
A DfT spokesperson said: “This Government has repeatedly demonstrated its commitment to supporting London’s transport network, providing more than £3bn in emergency funding support arrangements since the start of the pandemic.
“We continue to discuss further funding requirements with TfL and the Mayor, and any deal will focus on moving TfL onto a more financially sustainable footing, ensuring fairness and value for money for the taxpayer.”
A TfL spokesperson said: “We continue to discuss our funding requirements with the government and hope these discussions can be concluded successfully soon, to enable a strong and robust recovery from the pandemic.”