Transport for London has closed its funding gap for the coming year but warns it still faces a £500m shortfall without further government support.
The capital’s transport agency has seen fares income decimated by the pandemic, forcing it to negotiate a series of short-term funding packages with ministers.
A revised budget published today reveals that a combination of higher operational savings, deferrals of capital spending and greater use of reserves has helped managers narrow the funding gap while keeping service levels on buses, Tube and TfL rail services at previously published levels and allowing the completion of station improvements, the roll-out of greener buses and projects to encourage more walking and cycling.
TfL now predicts a full year funding requirement of £1.9bn – down from the £2.7bn predicted in its original budget – of which £1.4bn has already been secured. However the agency says additional government support is required to bridge the gap and it and Mayor Sadiq Khan have called on ministers to agree a multi-year package to provide stability and certainty.
Mayor Khan said: “London’s public transport network is essential to support our city’s recovery and improving ridership demonstrates the importance of being able to run safe and frequent services.
“But very difficult decisions remain as the pandemic has had a devastating effect on TfL’s finances due to the reliance on fare income.
“This is despite the fact that during my first term as Mayor TfL reduced their operating deficit by 71 per cent and increased their cash balances by 13 per cent.”
“If we don’t get further Government support in December, there could still be a £500m gap this year and so I urge Ministers to treat TfL as they do the private rail operators, and commit to a long-term funding agreement. This is vital not only for the good of London, but for the whole country.”
Andy Byford, London’s Transport Commissioner, added: “We are committed to ensuring we continue to play our full part in London’s recovery from the pandemic.
“Our staff, supply chain and other partners have worked magnificently to keep London moving, but the pandemic has shown our financial model, with such a disproportionate reliance on fare revenue, to be not fit for purpose. The revised budget will ensure our services operate safely, while keeping vital capital investment going.
“This budget protects service levels, supports economic recovery and will help build a greener economy. TfL is meeting its part of the deal with Government to get back to financial self-sufficiency.
“I now call on Government to truly engage with TfL to secure the long-term funding agreement that will drive London and the wider UK’s recovery.”