Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      Strait of Hormuz closed over ceasefire violations, says Iran

      Aerial view of ships navigating the strategic Strait of Hormuz, highlighting its importance to global maritime trade routes

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      Platitudes in women’s sport are empty, patronising and offensive

      Business professionals in a conference room discussing strategy with a presentation screen displaying key market trends.

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      Fogo de Chao nominated for Best Casual Dining Toast award

      Fogo de Chão restaurant exterior with vibrant signage and bustling entrance at popular city location

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Thursday 04 January 2018 11:07 am

TfL faces funding crunch as bosses say end of government subsidy isn’t sustainable for London

By: Rebecca Smith

Add as a preferred source on Google

London’s transport funding crunch has been put back in the spotlight after Transport for London (TfL) bosses said yesterday that the withdrawal of government subsidy will not be sustainable for the capital in the long-term.

At a meeting of the London Assembly Budget and Performance Committee, they also revealed plans to sell part of TfL’s Tube fleet, which will then be leased back, in order to fund new Piccadilly Line trains.

The transport body has been battling a surprise dip in Tube passenger numbers – crucial as it's the only part of the public transport network to make a profit – as well as a fall in advertising revenue, and a decline in other operating income from the congestion charge.

Read more: Tube to get more reliable as TfL wraps up major upgrade work

2018-19 marks the first year in which TfL will receive no operating grant from the government, which had previously stood at around £700m a year. It has been winding down, with TfL receiving £228m in 2017-18.

London’s deputy mayor for transport, Val Shawcross, said:

It is the money on asset investment on the roads that has been particularly hit, I think, in the spending plans.

And there will be investment in safety and in repairs, but the damage being done financially onto cyclical maintenance on the roads, and I don’t think that’s sustainable for the long-term.

She added that she did not think the long-term impact on the London economy had been entirely thought through, and the issue was "business that we actually do have to address; it's not something which London can sustain with for a very long time".

TfL commissioner Mike Brown said: “When the A2 or the A3 cross the London boundary, on the outside of the London boundary there will be a contribution from vehicle excise duty nationally to Highways England to maintain and perform capital renewals on that part of the A2 or A3, or any other trunk road. As soon as it crosses the London boundary, there isn’t, and that just seems a real inconsistency to me.”

A spokesperson for the Department for Transport said: “We are taking the big decisions for Britain’s future and investing a record £23bn on our roads to improve journeys for motorists.

“It is the responsibility of the mayor to determine how Transport for London’s budget is spent.”

Concerns have been raised that the funding squeeze will also mean planned projects hit the buffers, after upgrades to the Northern and Jubilee Line were shelved in October to prioritise spending.

TfL has said it will continue to deliver upgrades and reaffirmed commitment to projects such as the Bakerloo Line extension, saying planning and development work will continue to progress.

Selling Tube trains and leasing them back

But its plan to raise £875m with the sale and leaseback of some of its train fleet to fund the purchasing of new rolling stock for the Piccadilly Line was branded "a sorry state of affairs" by London Assembly Liberal Democrat member Caroline Pidgeon.

A TfL spokesperson said: “As is perfectly standard and common practice across the rail industry, we are looking at whether we could sell and lease back some of TfL’s rolling stock, as we have previously done on London Overground. This would allow us to purchase new trains on London Underground’s Piccadilly line, where there is a clear need for a modern fleet.”

But Pidgeon added:

It does not make any sense and means for years the public purse will be paying a high price.

The only winner will be the lawyers as we saw with the failed PPP [public private partnership] on the Tube.

We need investment in our transport infrastructure not a costly PFI [private finance initiative] by the back door.

Read more: TfL says major Tube upgrades cancelled because of dip in passenger numbers

 

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News

Categories

  • Business
  • Transport & Infrastructure

Trending Articles

  • As it happened: Stocks sink after Fed and Bank of England opt for hawkish hold; Oil price tumbles

  • FTSE 100 Live: Pound dips and stocks slip as Andy Burnham victory triggers political uncertainty

  • City investors raise alarm on Burnham’s Chancellor pick

  • Inheritance tax enquiries surge to six-year high after HMRC clampdown

  • More Big Four blues as Deloitte plans to slash UK audit roles

More from CityAM

  • TfL decommissions Oxford Circus air conditioning despite sweltering heat

    Transport & Infrastructure
    Nationwide found that 60 per cent of Londoners use trains or the Tube every week.
  • TfL dispel concerns over Queen’s tennis final tube havoc

    Sport Business
    Without specific context from the article, Im unable to generate an accurate alt text. Could you provide more details from...
  • Tube strikes called off in last-minute U-turn

    Transport & Infrastructure
    No 10 has called on Sadiq Khan to take action to end tube strikes.
  • Why are so many people abandoning sex toys on the Tube?

    Opinion
    Abandoned doll on London Tube seat holding CityAM newspaper, capturing urban life and public transport atmosphere
  • Fideres Study Finds TfL Fare Zones Disproportionately Burden Ethnic Minority Commuters

    Business Wire
  • Local elections 2026: who will win in Hammersmith and Fulham Council?

    London
    London citizens casting votes at polling station during local elections, diverse group of voters engaged in democratic pro...
  • Right to Buy has been a huge success, of course the left hates it

    Opinion
    Modern apartment buildings representing social housing initiatives in urban development, highlighting sustainable architec...
  • New HS2 budget to blow £33bn hole in public finances

    Transport & Infrastructure
    HS2 construction worker inspecting tunnel progress, showcasing infrastructure development and engineering expertise

CityAM Canada — business, markets and opinion for Canadian readers.

Sections

  • Business
  • Markets
  • Tech
  • AI
  • Economics
  • Opinion
  • Cities

Company

  • About
  • Contact

Legal

  • Terms of Use
  • Privacy Policy
  • Cookie Policy
© 2026 CityAM Canada. All rights reserved.
Terms · Privacy · Cookies