TfL’s Extraordinary Funding and Financing Agreement

Questions to the Mayor of London – answered on 11th June 2021.

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Photo of Elly Baker Elly Baker Labour

Please provide an update on the Extraordinary Funding and Financing Agreement for Transport for London that was due to come into effect on 19 May 2021?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Can I also congratulate you on your election? Enjoy the next three-plus years on the Assembly, I hope.

London’s economy represents 23% of the country’s gross domestic product (GDP) and investment in transport here supports jobs and growth across the UK, including 43,000 jobs nationwide through the Tube investment programme alone. London has to be at the heart of the UK’s post-pandemic economic recovery, and there will be no recovery for London without a properly funded TfL. The pandemic has decimated TfL’s finances. It has shown that TfL can no longer be forced to rely so heavily on fares revenue. Sustainable funding is needed if we are going to have a transport system that continues to be safe, reliable and capable of supporting the things that are essential post-pandemic: jobs, homes and economic growth.

This month, I launched my Let’s Do London campaign, encouraging people from across the country to make the most of our amazing capital city this summer. The boost this will provide to the national recovery will be huge but, again, we need a properly funded transport network to make this happen. The current series of short-term funding arrangements does not serve that purpose. It prevents TfL from operating effectively and efficiently and puts at risk the resources we need to avoid a car-led recovery, which has replaced one health crisis with another.

Put simply, without proper long-term funding, we cannot move forward and the national recovery may stall. That is not a risk that we can afford to take, so I am asking the Government to fund TfL properly, sustainably and for the long term so that we can invest back into London’s transport network.

On 18 May [2021], as I said, it was agreed to extend TfL’s previous funding agreement to tomorrow, 28 May, to allow for discussions to conclude. These discussions are still underway. I am not able to provide a running commentary at this moment as I do not want to prejudice any outcomes, but I will ensure that Members are briefed and Londoners are informed about the details of any agreement at the earliest possible opportunity.

Photo of Elly Baker Elly Baker Labour

Thanks, Mr Mayor, and thanks for your congratulations. It is good to be here.

You have talked about how we got here but, to revisit it, on 23 March 2020 the Government asked people to stay at home; Londoners did what was required, and we saw a 97% drop in Tube use and an 86% drop in bus use. The number of people travelling on public transport is still way below normal, as you have referred to in your oral update, which has led to a drastic reduction in fares income and a need for Government support.

Do you share my anger that the Government described this support as a “bailout” when it is no such thing?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Absolutely. There are all sorts of definitions. Some people even - wrongly - say that TfL is bankrupt and attribute that to us saving the average household £200 via the fares freeze.

It is important to realise that every transport authority in the world has needed support from its government. We have had more strings attached than any other transport authority.

The key thing is to look forward and make sure TfL is sustainable in the medium to long term, as well as the short term. The reality is that we cannot have a situation where 72% of our transport system is contingent upon fares. That is more than any other comparable city in the world and is one of the things we are discussing with the Department for Transport (DfT) going forward.

Photo of Elly Baker Elly Baker Labour

Thanks very much. To revisit that a little bit, on the long-term funding, in June 2013 the Government handed the previous Mayor a long-term six-month funding deal. Why is it proving so difficult to get the current Government to commit to a long-term sustainable funding arrangement for TfL?

Photo of Sadiq Khan Sadiq Khan Mayor of London

That is, some would say, the £3 billion question. The key thing is for us to get a deal from the Government that does not put not simply operating TfL, but also capital issues, at jeopardy. We simply cannot procure, for example, the Piccadilly line signalling we would want. We cannot make the orders for the electric buses and the hydrogen-powered buses that we want. Our ability to negotiate good deals is affected by not having long-term funding from the Government.

The Government does realise - I am not giving away any secrets - that in the short term it is simply not possible for us to provide services with even 40% on the Tube and 61% on the buses. You are right that last year we had fewer passengers than at any time during the last 100-plus years because Londoners did the right thing. We hope the Government realises that we do need a long-term deal. The Commissioner [of TfL] has been quite clear. His experience in running transport in New York and in cities in Canada and in Australia is that you cannot run them effectively without long-term deals. I am hoping the Government listens.

Photo of Elly Baker Elly Baker Labour

Thanks very much for that. Thank you, Mr Mayor.