The UK government has agreed to give cash-strapped Transport for London (TfL) a further £1bn in exchange for an extension of London’s congestion charge zone, further fare hikes and the scrapping of free travel entitlements, Sky News has reported.
According to Sky News, it had learnt that ministers had told TfL that it will have to introduce the reforms if it is to secure a second bailout package this year ahead of a funding deadline in the coming days.
The conditions demanded by the government are understood to include broader fare increases and the removal of remaining free travel entitlements for children and pensioners as additional Covid-19 restrictions introduced in London this weekend likely exacerbate TfL’s funding crisis.
However, the Sky News report added that the £1bn being offered is unlikely to last to the end of the year, with a Department for Transport source quoted as saying TfL wants double that amount. What’s more, London mayor Sadiq Khan is said to want a £5.7bn package to help secure the network’s future for the next 18 months.
Sky News reported that a person close to the mayor said negotiations were continuing about a deal to keep TfL services running, but warned: “Conditions such as extending a £15 congestion charge to the North and South Circular and taking free travel away from children and older people would be totally unacceptable to the mayor and he would not ask Londoners to accept them in these exceptionally difficult times.”
As previously reported by CiTTi, TfL secured a £1.6bn bailout in May 2020, a deal that, as Sky News has reported, gave the government the right to nominate two board representatives – Andrew Gilligan, a former journalist who worked with Boris Johnson during his tenure as London mayor, and Claire Moriarty, a former Department for Transport civil servant – and paved the way for a more comprehensive review of the transport authority’s finances being conducted by accountancy firm KPMG.
Furthermore, TfL, which is expected to lose £4bn this year, furloughed 7,000 of its staff earlier this year, and has suspended hundreds of construction projects in a bid to save money.
A TfL spokesperson said: “We continue to discuss our funding requirements with the government and hope these discussions can be concluded successfully soon, so we can help London through the next phase of the pandemic.
“We have today agreed with the government that our funding will be extended for two weeks so that these constructive discussions can be concluded.”
