Mayor announces £500m measures to "protect essential services for Londoners"

The Mayor of London, Sadiq Khan, has established a facility to ensure Transport for London’s budget will balance throughout the period of the latest funding agreement with the government.

This facility will restrict the GLA’s future financial flexibility and the money will have to be withheld from later funding from the GLA to TfL. It gives TfL time for its revenue to recover and protects essential services for Londoners.

The recent government agreement has left TfL with a £230m funding gap across the current and next financial years, which the previous secretary of state for transport, Grant Shapps, assumed could be met through further efficiencies without saying how.

But TfL assesses this as “highly challenging” and has to prepare for the eventuality that it may not be deliverable.

Since 2016, and before the pandemic, TfL has saved £1.1bn from its annual operating costs, and it is currently working on the delivery of £730m in savings commitments. As part of the Mayor’s determination to ensure all agencies he is responsible for are “as efficient as possible”, TfL is committed to looking for further efficiencies.

However, there is no certainty that the additional £230m savings required by the agreement can be identified and delivered, without which TfL would face choosing between slashing services to save money quickly or not being able to balance its budget – a legal requirement.

That’s why, to remove uncertainty both for TfL, Londoners using essential public transport services and the staff who operate them, the Mayor has acted to provide a finance facility of up to £500m from City Hall that TfL can call on if necessary between now and March 2024, when the government funding deal expires.

The Mayor of London, Sadiq Khan, commented: “The recent funding agreement for TfL came after some extremely tough and protracted negotiations. Although TfL and I were able to secure a number of key concessions, the Government still left TfL with a significant funding gap.

“City Hall’s innovative yet prudent approach to ensuring TfL can balance its books, will help TfL to adapt to the negative impacts of the pandemic without the need for significant service cuts, protecting London’s transport network for the millions of Londoners and visitors who rely on it every day.

“As Mayor, I will continue working flat out to ensure we maintain a world-class transport network – something that’s so crucial as we continue building a greener, fairer London for everyone.”

By Matthew Neville – Correspondent, Bdaily

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