Transport for London was today warned not to expect an “open cheque book” as its government Covid bail-out was extended for seven weeks.
Transport Secretary Grant Shapps yesterday announced that TfL’s second emergency grant, to replace billions in lost fares, would be continued from March 31 to May 18.
This creates breathing space over the mayoral election period and allows the deal to reflect the scale of the return to work as lockdown lifts but continues the uncertainty over long-term funding.
TfL estimates it will need between £2.6billion and £3.2billion of government support for the 2021/22 financial year and about £1.6 billion a year between 2023 and 2030 for new infrastructure, despite aiming to “break even” on its operating costs within two years.
A Whitehall source told the Standard: “Longer term there will be a push for efficiencies in TfL. This can’t be an open cheque book.”
Last year TfL was asked by the Government to look at cutting its capital spending by up to 30 per cent over the next four years.
This week TfL finance chief Simon Kilonback said it was being forced to abandon “mega projects”, with new trains for the Jubilee and Northern lines “paused” and Crossrail 2 and the Bakerloo line extension unfunded and effectively shelved until the end of the decade.
TfL had been seeking a one-year “roll-over” of the current £3.1billion six-month “risk-sharing” deal which compensates TfL for any lower than anticipated fares income, but which avoids the need for taxpayer help if fares income is higher than expected.
A Department for Transport spokeswoman said: “The roadmap to cautiously and safely reopen society means we can better understand the potential recovery in passenger demand, ensuring we deliver a sensible and appropriate deal in the future. We have therefore offered to roll over the existing funding deal until May 18.”
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A spokesman for Mayor Sadiq Khan, who is seeking re-election on May 6, said: “Ministers need to provide TfL with long-term financial sustainability to ensure London makes a rapid recovery.”
Richard Burge, chief executive of London Chamber of Commerce and Industry, said another deal would be required beyond May as TfL’s revenue would be “significantly impacted” by the loss of commuters and tourists probably until the end of the year. “It’s therefore disappointing that the offer doesn’t extend further at this stage,” he said.
