Government announces £1 billion funding deal with Transport for London

Mayor of London Sadiq Khan. Picture: Adam Davy

Mayor of London Sadiq Khan has agreed a TfL financial deal with the government - Credit: PA Wire/PA Images

The mayor of London has agreed a £1 billion transport support package with the government. 

Today's (June 1) announcement - which extends the financial support offered to Transport for London (TfL) to December 11 - brings the total government funding for TfL to over £4 billion since March last year. 

However, London Mayor Sadiq Khan took to Twitter to express his disappointment following “extremely tough negotiations”. 

He said: “I have tried to build bridges with the government as this is in the best interest of Londoners and our businesses, but I want to be honest with Londoners: this is not the deal we wanted, but we have fought hard to get it to the best place possible and to ensure we can continue to run vital transport services at this crucial time for our city.” 

TfL's transport commissioner Andy Byford emphasised the conditions-based deal relies on the transport network finding a further £900 million of savings or new income this year. 

He said: “The pandemic – during which our staff have worked so magnificently to keep London moving – has shown our financial model, with such a disproportionate reliance on fare revenue, to be not fit for purpose.” 

“It is vital that we also use this period to agree a longer-term settlement so that we can plan effectively for London’s future and deliver maximum value for money through our contracts and supply chain,” he added. 

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The government claims the support package will ensure TfL “improves efficiency” and “pursues effective reforms” to modernise London’s transport network.  

Transport secretary Grant Shapps said: “This £1.08bn financial package will support London and its transport network through the pandemic, and ensure it is a modern, efficient and viable network for the future. 

“Throughout this process, the government has maintained that these support packages must be fair to taxpayers across the UK and on the condition that action is taken to put TfL on the path to long-term financial sustainability. “ 

The settlement includes conditions likely to prove controversial, including expanding the use of automatic train operation and reviewing TfL’s pensions scheme. 

Other conditions include delivering £300 million of savings or new income sources by 2021/22 and identifying new sources of revenue for TfL of between £0.5 million to £1 billion each year from 2023.