The current funding deal to keep London’s trains and buses running was due to expire today, but has been extended by a week as negotiations over TfL’s future funding drag on.
TfL secured a funding and financing support package from the Department for Transport (DfT) in June 2021 to support transport services in London and contribute towards TfL’s forecast revenue loss due to reduced passenger numbers using TfL services as a result of the pandemic. The funding provided support that was due to run out on Saturday 11th December 2021.
As negotiations over the next tranche of funding to keep TfL running are still ongoing, the DfT has agreed to a one-week extension to allow more time for talks to take place. Despite the importance of the situation, the talks had only just started, leaving very little time to have secured an agreement anyway.
A Transport for London (TfL) spokesperson said: “We continue to discuss our funding requirements with the Government, who have today indicated their intention to extend our funding support for TfL through until17 December 2021.
“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.”
At the heart of the issue is how TfL will be able to recover its finances following the collapse of fares income caused by the pandemic and to adapt its long term finances to the post-pandemic world. TfL is seeking £1.9 billion over the next couple of years, while the DfT is seeking assurances that it hasn’t asked from other transport operators in the UK, namely that TfL is able to return to breaking even in its operating costs within a couple of years.
To do that, TfL is expected to need to raise an additional £500 million to £1 billion in revenue per year to offset the drop in passenger fares. That is coincidentally pretty much in the range of the central government grant that TfL used to receive until it was cut off in 2018.