UK: Transport for London says it will reassess its recent draft business plan to ‘address the impact of the continuing shortfall in funding’, after the government announced £250m of funding for investment projects in 2024.
The money announced on December 18 is ring-fenced for capital projects including the new trains for the Piccadilly Line, and is not to be used for operational costs.
The government expects TfL to be become financially sustainable by March 2024. This is defined as being able to use available sources of funding to cover its operating expenditure, debt servicing and repayment, and enhancements and renewals.
TfL is not expected to use solely operating income to finance major capital enhancements and renewals such as replacement of the life-expired Bakerloo Line trains, signalling and major road renewals.
As part of the deal, TfL will set out in July a plan to maintain and strengthen its finances while continuing work to reform its pension scheme and seeking efficiencies in its investment programme.
Responses
Rail Minister Huw Merriman said the agreement was ’fair for Londoners and taxpayers, underpinning projects that will support hundreds of skilled manufacturing jobs in our vital rail sector’.
London’s Transport Commissioner Andy Lord said TfL is ‘on track to be financially sustainable in terms of its day-to-day operations’, and ‘able to cover the cost of the majority of our capital investment’. Work is now underway to reassess the draft business plan ’so that we can confirm as soon as possible what we will deliver’.
Mayor of London Sadiq Khan said the one-year deal would protect and create jobs around the UK, including at the Siemens Mobility plant in Goole. He said ‘it is still vitally important that we agree a decent long-term funding settlement from the government that allows us to plan and invest for the infrastructure London will need over the coming decades. Expanding our transport network and supporting jobs and economic growth in London has real and sizeable benefits for the economy of the whole UK.’
Liberal Democrat London Assembly Member and Transport Spokesperson Caroline Pidgeon said forcing TfL to operate on a short-term basis means ’projects will end up costing more overall and that those that require long-term funding commitments have their futures placed in doubt’.
