Transport for London avoids bankruptcy, secures government funding: what’s next?

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Transport for London, the body that manages public transport in the capital, has reached a last-minute deal with the British government. A funding package will secure passenger revenues until March 2024, giving TfL some certainty about available resources, despite continued uncertainty in passenger behavior in the post-pandemic era.

Despite a partial recovery in passenger numbers since the lifting of pandemic restrictions, TfL is operating with financial reserves. However, the settlement agreed with Westminster changes all that. With only a few days left in the coffers, the funding will keep trains and buses running. It will also allow TfL to complete projects contacted to upgrade the transport infrastructure around the city. The transaction amounts to 1.2 billion pounds (1.5 billion euros).

National resumption is on hold until London resumption

TfL based its funding pitch on the national importance of maintaining a functioning public transport network in London. “After weeks of negotiation, we have reached an agreement with [the UK] government on a funding deal until March 31, 2024,” said Andy Byford, London’s transport commissioner. “It means we can now continue to support London’s recovery from the pandemic – for the benefit of the whole country. There is no recovery in the UK without recovery in London, and no recovery in London without a well-funded transport network.

Transport for London is planning new trains for the Docklands Light Railway (TfL)

TfL says the funding program will enable transport investments to be made, including the purchase of new trains for the Piccadilly line and for the Docklands Light Railway. It will also be able to complete ongoing projects, including the ongoing modernization of all four lines (4LM – the underground lines of the Circle, District, Hammersmith & City and Metropolitan lines); the upgrade of Bank station – one of the largest and busiest stations in the network; and upgrades to several other transmission assets.

Not the deal TfL wanted

However, the financial settlement was not universally welcomed. TSSA, TfL’s largest staff union, reacted with “concern and anger” to the deal. The union says it will force TfL to make hundreds of millions of pounds in further cuts over the duration of the settlement period. The union says the terms include an attack on staff pensions and real pay cuts for staff. In a statement from the union, they say funding for capital projects is extremely limited, with the government exercising strict control over projects that must go ahead – such as the controversial Silvertown Tunnel, a road project linking the east of London and Greenwich.

With airport links, perhaps more than Londoners would have felt the pain of a suspended Tube service (TfL image)

The TSSA claims that Andy Byford, the commissioner of TfL, admitted this was not the deal TfL wanted, but said it was this deal or no deal, with TfL facing the barrel of bankruptcy and direct government control. The TSSA believe TfL is unclear on which “managed decline” scenario was a possible outcome on the table. Byford refutes that, but says TfL still faces a series of tough choices. “London will move away from the controlled decline of the transport network. We are grateful for the support of the mayor [of London, Sadiq Khan] and government as we now strive to continue to serve the capital and invest in safe and reliable services for the millions of people who need them.

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