The details of the government’s £1.6 billion bailout for Transport for London have been published ahead of a TfL board meeting next week, revealing the smaller print of what’s been agreed.

The funding deal was for just under £1.1 billion as a government grant and a loan of £505 million. The headline announcement said that the total bailout could rise to £1.9 billion if needed.

What people have been waiting for is the small print, and while the board meeting minutes are more medium print than small, they do offer insights into some of the wranglings that went into securing the bailout. It’s clear from the presentation that this is very much a case of TfL being told to do things if it wants the government cash, but there is support from the government side as well to keep London’s transport running.

Whereas Transport for London had expected to run around half its volume of tube services and 80 percent of buses, they’re now required to move to full service as soon as possible. That increases the running costs, but has the potential to increase ticket revenues, and the more trains and buses they run the less crowding there’ll be on the network, which is essential in these times.

Probably the biggest change that will be felt by the most Londoners is the requirement being pushed onto TfL to restart charging for bus travel. To keep passengers distanced from bus drivers, the buses became middle-door entry only and stopped requiring people to tap-in when boarding.

The buses run at a loss at the best of times, and the drop in ticket revenues will have pushed them even further into the red, so the DfT was clearly keen to see fares reintroduced as soon as possible, and probably sooner that TfL had expected.

Following changes to the glass screen at the drivers door, some buses resumed charging last week, and more are following now.

The London Underground actually runs an operating surplus under normal times, but with it being able to carry fewer passengers than normal for the months ahead, the tube could plunge into a loss.

As was already announced, TfL has also been told to temporarily suspend free travel for Freedom Pass and 60 plus cardholders during peak and the suspension of free travel for under 18s.

The aim is to increase revenues as much as possible at a time when it’s facing a steep decline in income. Hence the already announced, and already expected decision that fares would rise by 1% above inflation from next year.

TfL also generates some income from its share of the Business Rates, assuming this year at least, that business rates don’t drop due to the economic downturn, which is flagged in the agreement as a concern.

Looking at costs, a lot of planned works are to be slowed down or delayed, but a lot is still going ahead, mainly due to existing contracts or the urgent need to get on with them. Such as improvements to TfL managed roads to improve social distancing and prepare them for an expected increase in cycling as people avoid public transport.

Other projects such as some tube station and line upgrades are still going ahead. However, London Underground asset renewals will be slowed down.

One contractual issue that is flagged is the Private Finance Initiative (PFI) contract signed back in 1995 with Alstom to provide and manage the Northern line fleet. That contract runs until 2027, and there a clause in the agreement (see note 119,c,5), which allows Alstom to ask for additional security if TfL’s debt ratings fall below a set-level. As TfL’s debt was recently downgraded — but is still very good — the bailout agreement says that the government would work to support TfL if this clause were to be triggered.

It’s unknown what that the implications would have been, but it seems to have been serious enough to need the explicit statement of support from the government.

Another item of small print states that TfL will work to take on control of Crossrail as soon as possible. Sounds obvious, but there is a legal power that if an ‘intervention point’ is broken, then TfL could require the Department to take ownership of Crossrail. While exceptionally unlikely, as with all legal clauses, if it exists it could be triggered, so this demand on TfL gets rid of that possibility.

While a lot of the agreement is focused on increasing revenues and reducing costs, one rather interesting cost is not being reduced — TfL’s work on aspirations to take over the mainline rail services that run into London.

That was kept in – according to the documents — at the DfT’s own request, which if any inference can be gleaned, is suggestive that the DfT may look more favourably on TfL taking over the main line rail services.

How they’d pay for it though, is the big unknown.


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  1. Melvyn says:

    The original announcement of withdrawal of Freedom Pass entitlement included the PM peak but this was later rescinded – Just think Chelsea Pensioners would be denied travel in PM peak while pensioners outside London would s travel free !

    This letter clearly shows this requirement lays directly with the Government something their Mayoral candidate seems to ignore!

    No way can a 2 metre zone remain in place if normality is to resume!

    • Chris Rogers says:

      Must admit I missed this announcement completely, though of course since most over 60s should be isolating it’s arguably of less value/meaning.

      I was though surprised that coverage of the deal focussed solely on the increase in the CC level rather than the fact that after nearly 20 years of weekday-only operation it is now coming in at weekends.

      Clearly it’s a unique situation but equally clearly TfL has, like every large organisation, tended to become insular and to exist for itself rather than those it seeks to serve, so much more effective budget control is needed – think about that issue again of the number of staff on over £100,000 salaries for one.

  2. Melvyn says:

    I wonder if there are any bendy buses which TFL could press into service to provide extra capacity ?

    I remember Heathrow Airport had some and given collapse in aircraft movements perhaps they could be transferred ?

  3. It’s going to interesting to see, with the tube and Overground, if the ability to keep passengers off the systems tiny platforms will have a positive knock on effect on the bane of “system performance”, the dwell time.

    One of the reasons that the tubes don’t run on time is that they normally run so full that passengers take so long to get on and off it makes running the full peak services (34 trains per hour) impossible.

    Long dwell times means .. slower trains and fewer passengers. If it is possible for the TfL to keep passengers outside the gate-lines by time-limiting the number of passenger entries to each station, it might lead to a long-term ability to run trains with no additional dwells, meaning reliable trip times during peak and long-term health benefits.

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