DfT asks TfL to clarify revenue-raising measures

The Government has asked the Mayor of London to clarify how Transport for London (TfL) will raise additional revenue before releasing emergency funds.

Ministers agreed a £1.08bn funding package to help TfL recover from the coronavirus pandemic in June. 

The bailout, which provided financial support for the hard-hit transport authority until December 11, followed two emergency support packages agreed in April and October 2020, and took Government support to TfL since March 2020 to more than £4bn. 

As part of that settlement, the Mayor of London, Sadiq Khan, agreed to: deliver £300 million of savings or new income sources in 2021 to 2022; identify new or increased sources of revenue for TfL of between £500m to £1bn each year from 2023; and prepare a plan to accelerate TfL’s existing modernisation programme of £730m by April 2023.

Furthermore, it wanted TfL to review its “generous” pension scheme; prepare a revised medium-term capital investment programme; set aside at least £100m to continue the delivery of healthy streets and active travel programmes; and carry out a joint review with Government of demand on London’s transport network to ensure service levels are appropriate.

Last week, Conservative MPs, councillors and assembly members urged the Mayor of London to ditch any plan to charge vehicles £5.50 a day to enter Greater London.

In a letter, sent by the GLA Conservatives to Khan, they asked him to “rule out” a proposal in TfL's Financial Sustainability Plan to charge up to £5.50 to drive into the capital as he enters further bailout negotiations with the Government, claiming it would “seriously hurt” outer London and the home counties.

It is not clear whether Khan has included this measure in TfL’s latest proposals sent to Government.

In a written statement to Parliament, published yesterday (Monday, December 13), transport secretary Grant Shapps said that the Department for Transport (DfT) received a letter from the Mayor of London that provided further information on how TfL and the Mayor will raise new income of between £0.5 billion and £1 billion in line with the commitment agreed under the June 2021 emergency settlement.

“This response was already three weeks past the original deadline of 12 November 2021,” said Shapps.

“Government requires further clarification on these proposals and the Mayor of London has been asked to provide more detailed information by 15 December 2021.

“Should sufficient information be received, work on an extended further settlement will continue to support the capital and its transport network.”

He said that the Government will make sure services are protected while work on the next settlement is underway.

“Support to TfL has always been on the condition that TfL reaches financial sustainability as soon as possible and with a target date of April 2023,” he added.

“The condition on identifying new or increased income sources is integral to TfL achieving that objective.”

An extension of the existing funding settlement will provide TfL with support until December 17, 2021, by rolling over the provisions of the existing settlement.

Shapps said he would update the House on the details of the next financial settlement after the close of this extension period.

A TfL spokesperson said: “We continue to discuss our funding requirements with the Government.

“There is no UK recovery from the pandemic without a London recovery and there is no London recovery without a properly funded transport network in the capital. We hope the discussions can be successfully concluded soon.”