Why £250m won’t solve TfL’s funding problems
Transport for London (TfL) has finally struck a deal with government to address its ongoing financial struggles.
Some £250m will be injected into the capital’s beleaguered operator in the next financial year, in an effort to avert what many have described as a looming funding “cliff edge.” Coffers have been tight since the pandemic wiped out passenger numbers and TfL has limped on through a series of bailouts with the Department for Transport (DfT).
Concerns had been growing after Chancellor Jeremy Hunt failed to make any mention of a funding deal in November’s Autumn Statement, with the current arrangement expiring in March 2024.
Relief was the currency after today’s announcement, which was welcomed by the Mayor, City groups and TfL following such a long silence.
But it could not get rid of the undeniable fact that, put simply, it just won’t be enough to make any lasting, long term difference.
The new funding will see the network through in the near term, yet makes up just half of the £500m TfL had been seeking, which it would use to invest in a slew of upgrades on the Underground and Overground.
London’s transport commissioner Andy Lord said in a statement the operator was now “on track” but went on to warn warn TfL would need to “reassess” its business plan to address a “continued” funding shortfall. Khan and the City said a more long term arrangement would be necessary to confidently plan out investments over the coming decades.
An ongoing political spat between the Mayor and government, which has pumped in £6.4bn to the network since the early days of Covid-19, worsened following the news. Transport Secretary Mark Harper accused the Greater London Authority of “poor governance and decision-making” under Khan’s leadership, with a response soon fired back from City Hall.
Whoever is right, experts say the £250m funding will not be enough to deliver the full range of projects TfL is pushing for.
“£250m will ensure that new Piccadilly Line trains are delivered but not Bakerloo Line ones, which are over 50-years-old,” Sir Tony Travers, a visiting professor at the London School of Economics (LSE) department for government, told CityAM
He added: “There is no money to pay for an extension of the DLR, which would make it far more likely there could be a radical increase in housebuilding in Thamesmead and elsewhere in the east of the city.”
Sir Travers, who has advised the Mayor on his 2024 to 25 budget, noted “short-termism” as a “real problem for infrastructure planning in the UK. TfL needs multi-year settlements so it can deliver newer and more extensive services.”
Passenger numbers will also play a key role in future finances. Leisure and commuting demand is beginning to creep back to pre-Covid levels, although TfL said in its latest draft business plan the milestone would not be reached until 2027.