The Mayor of London, Sadiq Khan, has issued the latest in his round of announcements to explain what will happen if TfL’s funding is cut by the central Government.
The announcement comes just after the Mayor was due to submit a revised plan to the Department for Transport (DfT) to secure funding for TfL, after the plan due last month was submitted, reportedly late and missing information about future revenue sources.
While the facts in the Mayor’s announcement on jobs are correct, that jobs outside London are at risk if TfL’s funding is cut, there’s growing disquiet with the Mayor’s tactic of negotiating with the government by press release.
In the latest announcement, the Mayor warned that “if Ministers do not fund TfL properly, the repercussions will be felt all around the country”.
It’s been estimated that TfL contracts contribute around £7 billion to the UK economy while supporting 43,000 jobs around the country, with 55p of every pound spent on London Underground by TfL going outside of London. In that sense, a capital investment grant for London of £1 billion would in fact translate into a grant by the government of £550 million to manufacturers in the rest of the UK.
The main issue in terms of investment apart from having the money, is that many of these contracts need to be signed a year or more in advance, so the absence of long term funding security for TfL in London means it can’t provide long term job security to suppliers outside London.
London’s bus manufacturing supports 3,000 jobs across the UK, and the thousand New Routemaster buses are also currently due their mid-life refurbishment, which would likely be carried out at facilities side the Capital. As well as key suppliers, TfL awards support work for around 3,000 small and medium sized enterprises in the UK. Many of these have very niche products and services and TfL can represent a significant percentage of their turnover.
Following TfL’s order for 94 new Piccadilly line trains, Siemens is building a manufacturing facility at Goole in Yorkshire, representing an investment of £200 million into the area, creating 700 direct jobs and 1,700 indirect jobs once the factory is in operation. Half of the new Piccadilly line trains will be assembled there in the coming years.
The facts are not disputed, but the repeated public statements being issued by the Mayor while delicate negotiations are ongoing with the government are causing concern in the DfT, and have been described as attempting to “negotiate by press release”. At the GLA’s Budget and Performance Committee meeting last Friday, Peter Fortune AM also noted that he had suggested to the Mayor’s office that they “shouldn’t have discussions about some of these things in public and the press”
For his part, when asked to discuss the terms of the funding request sent to the DfT, TfL’s Commissioner, Andy Byford declined to comment on the specifics, noting that he didn’t want the government saying that he “should not have talked about this publicly”.
Assuming the initial draft for negotiations was sent by the Friday deadline, and talks, in private, are constructive, then the current government funding package for TfL will expire on 4th February.
At which point a longer-term funding deal should have been reached.