Transport for London (TfL) may have to declare itself bankrupt if the government does not say whether it will cough up fresh funding in the coming days, the Mayor’s office has warned.
A spokesperson for the Mayor of London said today that the Mayor was still locked in negotiations with the Government about a new funding deal and it was “vital” the government agreed to deliver long-term funding for transport in the capital.
“Some 43,000 jobs outside London depend on TfL’s investment,” the spokesperson said in a statement.
“If the Government refuses to deliver the funding TfL needs, it could impact TfL’s UK-wide supply chain, hitting jobs and growth and holding back the economic recovery in London and across the UK,”
TfL is currently unclear on whether it will be able to balance its books and chief financial officer Simon Kilonback is understood to be readying a number of measures in the event that government does not indicate it will provide funding in the coming days.
One of the measures under consideration is issuing a report under section 114 of the Local Government Finance Act 1988, which would effectively declare TfL bankrupt.
The warnings from TfL come after its current funding deal expired last night, after being extended for a second time on the 4th February.
The London Assembly piled pressure on the government this week and warned that TfL was being “paralysed” by a lack of funding.
In a letter to Transport Secretary Grant Shapps, on Thursday, the London Assembly warned that TfL cannot invest in new rolling stock and many bus routes have been unable to rendered, leaving high-pollution vehicles on the road.
Bosses at TfL refused to accept a draft funding deal on 4th February because of what is said were “unacceptable” conditions attached to it.
A spokesperson for Department for Transport said: “We have repeatedly shown our commitment to supporting London’s transport network throughout the pandemic, providing over £4.5bn in emergency funding to Transport for London and pledging a further billion pounds of capital investment every year up until at least 2024/25 – all at a time of significant pressure on the national finances.
“We’re aware that TfL are still feeling the aftereffects of the pandemic, but it is the Mayor’s responsibility to accelerate overdue reforms that will ensure TfL becomes financially sustainable in a way that is fair to taxpayers.
“Discussions are ongoing and we will provide an update in due course.”