A settlement which will support almost £3.6 billion worth of projects and secure the long-term future of London’s transport network has today (30 August 2022) been agreed with TfL.
The settlement, which includes just under £1.2 billion of upfront funding and brings government’s total funding to over £6 billion, matches the Mayor’s own pre-pandemic spending plans. It will ensure the network is not only protected against potential lost revenue caused by uncertainty of post-pandemic demand but will also enable the delivery of a number of projects set to revolutionise travel across London.
This will include brand new Piccadilly line trains, as well as modernisations and upgrades across the District, Metropolitan, Hammersmith and City and Circle lines for millions of Londoners.
Specific upgrades include supporting the long-awaited repair of Hammersmith Bridge, the extension of the Northern Line and vital improvements to Elephant and Castle station – none of which would have been possible without this funding.
The landmark deal will dedicate £80 million every year to active travel schemes, expanding walking and cycling infrastructure which will reduce congestion and pollution across the capital. The deal also sees the establishment of an independent property company that will start on 20,000 homes on TfL’s land within 10 years.
As part of the agreement, the government ensured the Mayor agreed to continue work on the introduction of driverless trains on London Underground, something the Transport Secretary believes is key in London maintaining its position as Europe’s greatest transport network.
In an official statement Transport Secretary, Grant Shapps said:
For over 2 years now we’ve time and again shown our unwavering commitment to London and the transport network it depends on, but we have to be fair to taxpayers across the entire country. This deal more than delivers for Londoners and even matches the Mayor’s own pre-pandemic spending plans but for this to work, the Mayor must follow through on his promises to get TfL back on a steady financial footing, stop relying on government bailouts and take responsibility for his actions. Now is the time to put politics to one side and get on with the job – Londoners depend on it.
As part of the settlement the Mayor has also committed to:
submitting proposals to reform pensions, in line with TfL’s plans to become financially sustainable, by the end of September
continue to progress ongoing initiatives to modernise, reform and become more efficient
achieve the revenue generation proposals promised in February and progress proposals through public consultation
The Mayor and TfL will be responsible for setting out and implementing areas where these changes can be made as well as accelerating crucial reforms to ensure TfL becomes financially sustainable by 2023.
This latest settlement follows on from 4 previous emergency deals, over £5 billion of upfront funding and a pledge of over a billion pounds of investment per year at the most recent spending review at a time of significant financial pressure to ensure vital services remained running.
Andy Byford had said earlier today that while the funding settlement is not entirely sufficient, it would be enough to plan for the immediate future. TfL is continuing to target financial sustainability from April 2023 and says that it is working towards being financially sustainable before the latest funding package expires on 31st March 2024.
Speaking earlier today Mr Byford said: “This agreement, which was hard won, means that we can now get on with the job of supporting London’s recovery from the pandemic – to the benefit of the whole country.”
He added that the agreement “helps us avoid large-scale cuts to services, and means that we will commit £3.6bn to capital investment over the period, with around £200m of new capital funding from Government beyond previously budgeted sources like business rates, which were devolved to the Mayor in 2017.”
“The agreement also allows us to increase our asset renewal programme to help ensure our network remains reliable, and means we can restore our Healthy Streets programme, making our roads safer, and more attractive for those walking and cycling.”
“The support offered by Government left an unfunded gap in our budget, which we have been working hard to identify how we will fill. This work has made good progress and we are confident that we will achieve an outcome that allows us to balance our budget and maintain our minimum cash balance. We will need to progress with our plans to further modernise our organisation and make ourselves even more efficient, and we will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network. We are grateful for the support of both the Mayor and the Government as we now set out to continue serving the capital and investing in safe and reliable services for the millions of people who need them.”
In a message on Twitter, the Secretary of State, Grant Shapps said that the DfT has “agreed a long-term settlement with TfL, which will support nearly £3.6bn of projects & bring total funding to over £6bn in a way that is fair to all taxpayers. The Mayor must now follow through on his promises to keep TfL on the path to financial sustainability by 2023.”
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