Mayor of London Sadiq Khan has said Transport for London (TfL) and the city's economy faces collapse if the Government doesn't deliver funding of £4.9 billion for rest of this year and 2021.
TfL’s current emergency funding deal runs out on October 17.
After TfL’s finances were decimated by the pandemic, it estimates that £2bn will be required for the second half of 2020/21 on expiry of the existing Government funding agreement, and it is anticipated that a further £2.9bn will be required during 2021/22 to stabilise the network’s financial position.
Over 70% of TfL's income for operating the network comes from fares.
At the peak of the pandemic, TfL's passenger income was reduced by more than 90% compared to last year, and it was therefore reliant on Government providing financial support of up to £1.9bn earlier this year, to ensure transport services in the capital could continue to operate effectively until October 2020.
Khan said that with the Prime Minister’s announcement to encourage more to work from home due to the threat of a second wave of Covid-19, there remains a “significant threat of passenger numbers collapsing further”.
TfL is also in need of further investment to complete the Elizabeth Line, which is jointly sponsored by central Government and TfL.
Khan said the Treasury will reap the majority of the Elizabeth Line’s economic benefit from tax income.
Sadiq Khan, Mayor of London, said: “I need to be honest about what is at stake if the Government fails to provide TfL, which has played a vital role throughout the pandemic, with the appropriate funding it needs to function.
“Transport operators across the world have been hit harder than ever as a result of passengers following advice and staying home during the pandemic – TfL is no exception, and further borrowing is not a viable solution.
“The choice is stark: a safe and effective transport network that continues to deliver for Londoners and support jobs in the capital and across the UK, or a Government-led spiral of disinvestment that sees vital infrastructure age and fail – wasting hundreds of millions of pounds, stalling economic recovery, and taking us back to the deteriorated transport network of the 80s and 90s.
“The Government must come to the right decision for the benefit of the capital and the country as a whole.”
Khan said TfL is instrumental to the city’s economy, which generates around 23% of the country’s GDP.