Chancellor George Osborne has agreed a six year settlement for City Hall worth around £1.6bn per year, starting with an investment grant of £925m in 2015/16 which rises to £1,007m in 2020/21.
In addition the Mayor will be able to borrow a further £600m annually to finance transport infrastructure projects. City Hall says this will allow planned Tube upgrades and investments in roads and cycling to go-ahead.
However the total Government money available to TfL is set to fall by 8.5 per cent and the Chancellor’s spending round document says “efficiency savings have been identified by Transport for London” to enable it to meet the cuts.
News of the reduced funding came as TfL revealed its top managers had shared a £2.5m bonus windfall despite a succession of fares increases.
In a major boost for the Mayor, the Chancellor and Transport Secretary Patrick McLoughlin have agreed to devolve the West Anglia suburban rail services to Transport for London.
The Mayor, backed by the London Assembly and passenger watchdog London TravelWatch, originally called for devolution of the Southeastern and Greater Anglia rail franchises.
Mr Johnson had suggested an announcement would be made in April and the subsequent delay fuelled suggestions that the Mayor’s ambitions could be blocked by Ministers.
Speaking last year the Mayor said handing control over the franchises would allow him to improve passenger experiences and make savings which could be reinvested.
Other measures approved by Mr Osborne include a £500m borrowing guarantee to support new housing and transport infrastructure in Tottenham and £90m to electrify the Gospel Oak to Barking overground line.
In a statement City Hall says this will enable the later extension of the line to Barking Riverside, “unlocking thousands of homes”.
Ministers have also agreed to fund a £2m feasibility into Crossrail 2.
The Chancellor has committed himself to “examine” the London Finance Commission report which recommended the capital be allowed to retain a greater share of the taxes already raised within its borders.
Mayor Johnson said the Chancellor’s announcement “shows that the Government recognises the vital importance of continued investment into London”
He added “I am pleased to also welcome specific commitments to a series of projects set to trigger significant development and regeneration in areas that need it most, helping to unleash the delivery of homes and jobs.”
Despite the long-term funding settlement and news of greater rail devolution, Labour’s leader on the London Assembly said today’s announcement was “disappointing for London”.
Len Duvall AM, said: “It is deeply worrying that Transport for London was singled out by the Chancellor. This looks like we’ll have further fare rises at a time when Londoners are struggling with a cost of living crisis and rising food, fuel, rent and childcare costs.
“There was a commitment to funding a Crossrail2 feasibility study which we fully support, but we also desperately need a commitment to complete the Tube Upgrades which will help Londoners more quickly.”
Green party AM Darren Johnson added: “Just a couple of weeks ago the Mayor warned that London’s fast-growing population needs fast-growing investment to expand public transport and cycling and to build affordable homes.
“Today that investment has been cut back. Londoners are going to be stuck with more above inflation fare hikes, rising traffic, an under-funded cycling revolution and rocketing rents under Boris Johnson.”
City Hall’s Liberal Democrat group were more supportive of the Mayor’s settlement with Government.
Group leader Caroline Pidgeon said: “The big picture is that vital investment in transport in London has been protected. Tube upgrades and other much needed investment projects can now continue right through to the end of this decade. TfL’s six-year funding investment settlement will help ensure that London keeps growing and moving.
“Transport for London now has the means to deliver further improvements to the Tube network, that we start planning for Crossrail 2 and start to invest in London’s roads to ensure they are safer for everyone and particularly cyclists.
“The Treasury has listened and recognised the importance of continued investment in London’s transport infrastructure for London and the UK. It is now time that the Mayor of London ensures that every pound of investment is spent wisely.”
