It is the saga that seemingly won’t end; the issue of a Long Term funding settlement for Transport for London (TfL), provided by the Department for Transport (DfT).
The money is needed as a result of Covid-19 decimating TfL’s finances. TfL, which operates much of the capital’s public transport, relied on fares revenue from the London Underground and buses as well as other forms of transport for more than 70 per cent of its revenue before the pandemic hit in March 2020.
TfL has previously set out it would require £927 million for the remainder of this year, as well as a Long Term capital funding deal support London’s economic recovery.
An offer was made by the DfT on 22 July, and London transport commissioner Andy Byford said on 28 July that TfL was considering whether the proposal meets the requirement and, if not, “the very difficult set of choices we would need to make.”
There were some significant issues that need to be discussed, he said, in terms of deliverability and the need to avert managed decline in both the short and longer terms.
Passenger numbers fell to less than 5 per cent pretty much overnight and remained low following repeated government advice not to travel.
As the country reopened, so the increase in working from home has continued to hamper TfL’s financial recovery. This has forced the organisation to warn that planned upgrade work may have to be cancelled or deferred, including the Deep Tube Upgrade, where a fleet of trains already 50 years old could be forced to operate into the 2040s, TfL has warned.
Projects such as the Deep Tube cooling panels, of which the first trial ended last week, are seemingly reliant on a Long Term Funding settlement. The panels are required on the Piccadilly line (and eventually others), when the frequency reaches 33 trains per hour using new Siemens trains. That frequency will offer capacity for 10,000 additional passengers each hour during the peak but is reliant on the funding being approved for a new signalling system. The energy generated by those new trains will drive up temperatures, meaning the panels are required.
Initially DfT had been awarded funding packages that lasted around six months, however TfL has been calling for longer-term deals. Instead, mostly, it has received extensions. Such as the one on 13 July which saw the latest funding agreement extended until 28 July. And on 28 July that was extended until midday on 3 August.
DfT wants TfL to continue to cut costs and get its finances in a better condition. It has added, in the past, conditions such as working toward the introduction of further automation. The drive to cut costs has forced mayor of London to scrap his fares freeze on TfL services, one of his election manifestos.
On 28 July, Secretary of State for Transport Grant Shapps tweeted about the situation. He said: “I’ve offered TfL a settlement that supports £3.6bn worth of projects, matching the Mayor’s own spending plans from 2019. This is our final offer which more than delivers for London while being fair to UK taxpayers.” He didn’t specify what projects would be funded.
London transport commissioner Andy Byford said on 28 July: “Since keeping London moving through the darkest periods of the pandemic we have been making the case to Government that there can be no UK recovery without a London recovery and that there can be no London recovery without a properly funded transport network.
“We are grateful for the support we have received so far, and maintain we have met every condition that has been set by Government as we have worked towards agreeing a multi-year funding settlement that would give certainty to London and to the tens of thousands of jobs across the country that are directly linked to TfL.
“Every other major transport system around the world receives central Government funding, and London needs the same if it is to have a transport network that can continue to support homes, jobs, opportunities and economic growth. The importance of a properly funded transport network, which can offer a viable alternative to car use and can play its part in addressing the climate emergency, has again been highlighted in recent weeks.”
Sadiq Khan also said on 28 July: “today, the Government has given TfL a short-term extension to the current emergency funding deal until 3 August. This is only necessary as the Government shared the long overdue draft proposal for a funding settlement to TfL late last Friday [July 22], and it’s right that time is taken to thoroughly scrutinise the offer and understand it’s impact on Londoners and TfL services.
“This is a £10bn transport authority that is crucial to supporting jobs and economic growth across the country. TfL must consider if this draft proposal provides the funding needed in order to avoid having to make painful cuts, and it’s in no one’s interest to have conditions attached to this funding deal that come at a cost – damaging TfL, unfairly punishing Londoners and our economic recovery.”
Now, again, we wait for the next deadline and the possible publication of the details of the offer.