Saturday, December 4

TfL secures £1.8bn rescue deal



Sadiq Khan and Boris Johnson have struck a rescue deal worth up to £1.8bn for Transport for London to keep bus and Tube services in the capital running for another six months.

The agreement, announced early on Sunday just hours ahead of a crucial deadline will prevent the collapse of TfL until the end of the financial year.

But discussions will continue on a new funding package for the following year, with lockdown restrictions expected to play further havoc on the group’s main income stream.

Mr Khan, the Labour mayor of London, has been locked in an acrimonious dispute with transport secretary Grant Shapps over the bailout in recent weeks.

Mr Shapps had threatened to take direct control of TfL unless Mr Khan accepted a package of unpopular measures, including significantly extending the traffic congestion zone and increasing fares, in return for the rescue package. In turn, the mayor threatened to plunge the body into a form of public-sector insolvency called “section 114”.

A recent rescue package for the railways did not come with any such strings attached, prompting Labour claims that the government was seeking to undermine Mr Khan. Mr Johnson, the prime minister, accused the mayor of leaving TfL’s finances in poor shape before the crisis hit in the spring. Under the terms of Sunday’s bailout Mr Khan will not have to implement higher fares or a bigger congestion zone.

But the London mayor will have to sign up to £160m of cost savings over the six months. He has also agreed to consider increases in council tax beyond that period as a way to narrow TfL’s funding gap in the future.
The new lockdown in England announced on Saturday evening will put new pressure on TfL’s finances, which have been shattered by a collapse in passenger numbers during the pandemic.