Transport for London (TfL) has confirmed that it is reviewing its business plan after the government left it with a £250 million hole in the annual maintenance budget.

Photo by inspira studio on Unsplash

TfL has an estimated renewals and maintenance budget for the year ahead of around £2 billion, of which it had £1.5 billion from its own resources — that is fares and other income. Although TfL is on course to reach operational financial sustainability by the end of this financial year, that left an expected £500 million gap in this year’s £2 billion maintenance budget.

At the end of August 2022, TfL had secured an agreement with the government on funding until 31st March 2024, which required TfL to submit its capital funding plans to the government for approval, and it was hoped that the government would cover that gap this year.

However, it’s been announced that the government will cover just half the gap, leaving TfL with a £250 million hole in its finances, on top of October’s announcement that the government wouldn’t uprate its existing support in line with inflation – leaving TfL with an unexpected £181 million hit to its costs.

TfL has already had to delay some £90 million worth of maintenance on the network to help cover the funding gap and has confirmed that it’s now reviewing its draft business plan for the year ahead to try and cover the larger than expected gap in its finances.

As TfL is also legally required to run a balanced budget, if it can’t find cost savings through other means, it would be required to cut services to reduce costs to the level necessary to balance its costs.

TfL could try to fill the maintenance gap through borrowing, but had already assumed an extra £250 million in borrowing, if affordable. Doubling that would be a challenge. There’s also an option for the Mayor to cover the gap through a £500 million borrowing option available to the Greater London Authority (GLA). However, that’s borrowing that then needs to be repaid by TfL at a later date — so it’s not really filling a gap and more a case of kicking the can down the street for someone else to clean up.

Since 2016, and before the pandemic, TfL has saved £1.1 billion from its annual operating costs, and it is currently working on delivering £730m in savings commitments.

One of the issues often highlighted by TfL is that many of its plans have long timelines, it usually takes years to deliver rail upgrades, and TfL has highlighted the need for long term stability in how it is funded. Without long term clarity, they’ve argued that it’s harder and often more expensive to rely on short-term fixes to London’s transport.

The next 5 years of TfL’s 15-year Capital Strategy had conservatively assumed that government funding will be limited to a proportion of replacing worn out trains and signalling, but the government was clear in its August 2022 funding document that “TfL is not expected to solely finance these from operating incomes, as is consistent with other transport authorities.”

TfL is on course to reach operational financial sustainability by 2023/24. This will mean that capital renewals are funded by operating income, but that the replacement of life-expired rolling stock and signalling would normally be funded by the central government.

However, the one constant that has been reiterated time and time again is the need for long term certainty in what level of funding will be available.

The capricious treatment of TfL over the past few years, which is markedly at odds with how transport bodies outside London were treated during the pandemic makes the sort of long term planning all transport bodies require exceptionally difficult.

It’s storing up problems that Londoners will be dealing with for decades to come.

Andy Lord, London’s Transport Commissioner, said: “Through a huge effort to reduce costs and rebuild our ridership and revenue following the pandemic, TfL is now on track to be financially sustainable in terms of its day-to-day operations. We are also able to cover the cost of the majority of our capital investment.

“We, alongside London’s business stakeholders and others, have consistently made the case that additional Government support for capital investment in transport is needed if we are to be able to continue to deliver vital improvements to London’s transport network, unlock new homes and support growth across London and the UK.

“It is good news that we have now reached an agreement with the Government on the capital support that they will provide over the next year, and we are grateful for the support. However, we will now need to reassess our recent draft business plan and address the impact of the continuing shortfall in funding. That work is underway so that we can confirm as soon as possible what we will deliver for London.”

The letter from the Department for Transport (DfT) confirms that the £250 million is to enable TfL to continue to deliver its current capital programme and its committed major capital projects, prioritising the Piccadilly Line Upgrade Phase 1, and should not be used for any other purpose or to fund any new capital activity.

The DfT will make the following payments to TfL: £100m on 18 January 2024; £95m on 15 February 2024; £50m on 14 March 2024; and £5m on 11 April 2024.


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  1. Brian Butterworth says:

    I hate to say this, but perhaps it’s time to scrap the decision to treat the Tube as an historical artifact and implement plans that can bring a safe and reliable system at an affordable cost?

    • Jo says:

      In what way is the tube treated as a historical artefact?!
      Everything TfL does with the tube is to squeeze as much capacity as possible out of it and bring it up to modern standard (4G connectivity underground, AC on trains, step free access, etc).
      The only thing TfL does to preserve its history is within the stations keeps its heritage whilst also making it user friendly. You’ll also see the odd heritage train but those are special.

  2. Tom R says:

    Unpopular though it may be, I think it’s time to increase off-peak fares. Maybe have a flat weekday rate which mainly raises more revenue for tourists and keep weekend fares the same?

    Maybe also time to consider a Manchester-style tourist tax.

    • Aled says:

      Isn’t the whole point of reducing off-peak fares designed to encourage people (often young/old/students) not to travel during peak hours?

      Remove that incentive and does it create bigger headaches?

      I’m finding recently that the central trains are far busier than they have been for years. Almost every Lizzyline train I’ve been on recently has been standing room only (not a bad thing, it has to pay for itself)

    • Tom R says:

      In my experience the peak times have flattened out post-Covid to such an extent that I think it makes no difference. Peak fares only penalise those who have to travel in for 9am (or earlier). Those with a choice tend to get a later train and there doesn’t seem to be a drop-off in busy-ness until around 10am. Neither group will change behaviour due to price alone.

  3. SE1 says:

    – Scrap free travel for over 60s and under 18s on buses and trams (latter can be means tested).
    – introduce a tourist tax of £1 per person per night. London most be the only major city that doesn’t have one in the world.
    – Increase off-peak fares by 5p per zone.

    • M O says:

      Getting children to pay for the government’s games would be shameful.

    • ChrisC says:


      The 60+ Oyster card is mainly funded by the boroughs and isn’t it being phased out anyway?

      Yes many cities do have tourist taxes but in many of those cities it is part of how local government is funded to provide basic services. And if one were implemented in London the boroughs would want a cut as it’s the boroughs who pay for things like extra street cleaning in tourist areas.

      M O

      Children don’t get free travel in many parts of the country. Ending it in London would bring London in line with what happens elsewhere,

  4. SE1 says:

    They don’t pay, their parents do. Working adults on low income are paying to subsidise wealthy kids going a few hundred metres because the bus is free. Not to mention it encourages teens to just hop on for a few stops rather than walk for 10 mins.

    Around 6-7 years ago I distinctly remember struggling to board the 18 or 4 bus along Blackstock Road during the morning peak because buses were so full of kids using it for a handful of stops. How many would have walked the short distance if their parents had to pay for the service? Prime example of the negative impacts of free riding.

    • M O says:

      I certainly don’t want to live in a society in which we make children pay for government economic incompetence. I’m sorry you couldn’t get a seat.

  5. SE1 says:

    I meant number 19, not 18! I don’t live in the area anymore but I think that route no longer runs that stretch.

    • SE1 says:

      Where did I say anything about getting a seat?

      If you want wealthy kids to travel at the direct expense of the working poor that’s your view. I’d rather side with lower income individuals regardless of age.

    • Andy T says:

      That being the case, why end free travel for over 60s? There are poor people in that age range also

  6. Aunt Aggie says:

    They’ve been massively overpaying on the Elizabeth Line concession for years now – huge waste and profligacy has followed.

    They need to get Arriva in there to cut costs and stop the waste

    • Keith says:

      Is that the Elizabeth line which is due to break even by the end of the 2023/24 financial year?

    • Aunt Aggie says:

      Would that be the Elizabeth Line which would be returning a significant surplus to TFL if the Concession Agreement weren’t so bloated?

    • Chris says:

      Yes, the Millions wasted on the Elizabeth Line Concession each year are Millions which would be reducing the TfL deficit, if it had been properly managed.

      Throwing money at a project is a poor substitute for proper management

  7. Marcko says:

    The comments by the Usual Right Wing Bots are too ridiculous to engage with – let’s just remember that London is the ONLY World City where public transport is considered a self-funding afterthought by a negligent and corrupt Political Racket that doesn’t see a problem with giving handouts worth a few £Billion to it’s mates (Corp tax “allowances”, Tax Avoidance for Billionaires,NHS IT procurement, PPE in the Pandemic, take your pick) but justifies every mean-spirited, stupid, politically motivated cut to TfL as being “fair to taxpayers.”

    Otherwise how will Taxpayer’s be able to dole out another Year’s worth of Corporate Welfare to Hedge-funds if they are expected to equitably fund something useful they actually want/need?

  8. Hannah says:

    I think everyone knows the solution to this, but is too afraid to say. TFL staff are significantly overpaid compared to equivalent jobs in the public and private sector, and this needs to end.

    There needs to be serious cuts to wages across TFL, introduction of self-driving trains. I get the overground every single day from Hackney, and 9 out of 10 times I walk past the ticket office, the station staff are sat on their mobile phones. In the private sector, this kind of inefficiency and overstaffing would not be allowed.

    • A says:

      Out of curiosity, how do you expect staff to communicate with their colleagues who aren’t in the same place if not on their mobiles?

      Also, you could cut staff under a private sector model, but then who would e.g. carry that old couple’s luggage up the stairs, assist victims of crime, give you directions to Buckingham Palace?

      I’d love to see the comparative wage stats you mention. Perhaps the front line staff are better paid than in the public sector, but the office staff (including senior management, despite their 6-figure salaries!) are not.

    • Hannah says:

      @A well if they are communicating to their colleagues via Mario Cart then fair enough…

      As for carrying luggage etc, I’ve only ever seen passengers help with that, and I’m not advocating an entire cut to staff – just a significant reduction. There are far too many.

    • Steve Doole says:

      8 out of 10 times passing roadworks as a child several decades ago I saw men leaning on shovels.
      Over manning allows for rapid intervention when things to go wrong, and unintended events.
      People like to feel safe.
      Women prefer to see staff about stations, and conductors on buses.
      Yes generally private sector operators show little interest in customer preferences or the psychology of public transport, hence the large decline in bus passengers (outside London).

  9. Joshua says:

    What are these comments. Completely ignoring the fact that we have an anti-infrastructure government who recently cancelled the northern leg of HS2, and are selling off the land, as to prevent a future government from being able to restart the project when we can afford to.

    London is the only major city that has to rely on self-funding almost in its entirety to fund its own development.
    If you don’t have a government who’s willing to fund public infrastructure projects (other than roads), and have a personal vendetta against the current mayor and even went out of their way to change the mayoral election system from the reliable ranked-choice to the unreliable first-past-the-post just in the hopes that enough people would vote for their candidate to scrape through with an undemocratic 30-35% of the vote.

    We can’t even get one extension for the Bakerloo, meanwhile Paris is building 3 new underground lines, 2 new tram lines and extending 5 existing railway lines. Meanwhile the North gets nothing.
    The people in blue ties are the problem, but too many people are in denial.

  10. NG says:

    “The capricious treatment of TfL over the past few years” – well this current misgovernment simply hate London in general & TfL in particular.
    It is spite, pure & simple.

    BB – You should know better than that!
    Either that or you are trolling, for fun.

    SE1 – Where would you like it inserted?

    AA – You carefully ignore the “other” concession from the wonderful “private enterprise” rip-off calle Heathrow, don’t you?

    Marcko & Joshua – Exactly

    Hannah – Ah you are joining AA & others as a “Right wing bot” are you?
    NOT “self-driving trains” AGAIN – really the stupidity/ignorance/arrogance ( Take your pick? )

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