The UK government has agreed a fourth funding settlement for Transport for London (TfL) worth £200m, which will run until 24 June 2022.
Emergency funding had been due to end on 25 February. The new deal also includes the potential for a longer-term capital investment settlement for TfL.
The UK Department for Transport (DfT) said this would be agreed ahead of the next financial year and would be dependent on London mayor Sadiq Khan and TfL’s cooperation with the government, including providing sufficient information regarding its capital investment plans and meeting conditions set out in the previous settlement.
It follows three previous emergency funding packages and takes the government’s support for TfL, since March 2020, close to £5bn.
UK transport secretary Grant Shapps said: “These support packages must be fair to all taxpayers and the settlement agreed today provides enough to cover lost revenue from the pandemic while the mayor follows through on his promises to keep TfL on the path to financial sustainability by 2023.”
In the funding settlement, Khan will consult on the options he believes will raise between £500m and £1bn in additional annual revenue from 2023.
The mayor of London will also outline options to achieve operating cost savings of up to £400m in 2022 to 2023 and deliver against TfL’s accelerated modernisation plan while making significant progress in moving the organisation’s pension fund into a financially sustainable position.
Throughout this period, the government will continue to work closely with the mayor and TfL to ensure London’s transport system delivers for Londoners and contributes to the UK’s economic recovery while maintaining the interests of national taxpayers, the DfT said.
Khan said: “While I welcome and am relieved about this funding, once again the government has just provided a short-term funding deal that will only enable TfL to continue running transport services for a few more months.
“This agreement makes reference to future capital investment for TfL, but it’s essential that this quickly turns into a concrete commitment from the government.
“The only way we will be able to avoid significant and damaging cuts to tube and bus services is if the government steps up and provides the longer-term capital funding TfL urgently needs.
“Over the next few months, I urge the government to engage with TfL and City Hall in good faith so that we can finally agree a fair, longer-term funding deal that will protect London’s transport network – for the sake of the capital and the whole country.”
The funding update comes after Khan and TfL revealed proposals for the expansion of the ultra-low emission zone (ULEZ) to include Greater London and higher charges for all but the cleanest vehicles ahead of a possible road-pricing scheme for the UK capital.
Ministers agreed a £1.08bn funding package to help TfL recover from the Coronavirus pandemic in June 2021. The bailout, which provided financial support for the transport authority until 11 December last year, followed two emergency support packages agreed in April and October 2020, and took government support to TfL since March 2020 to more than £4bn.
