Transport for London outlines £16bn multi-year funding package from government

London’s transport body has set out plans to prove how it will become self-sufficient in the long run.

Transport for London (TfL) outlined a £15.8bn multi-year funding package from the UK government to maintain the capital’s infrastructure system and modernise the Bakerloo and Piccadilly lines.

It is calling for a new funding deal which will see TfL get a proposed £1.6bn ($21.5bn) a year from 2023 to 2030. Additionally, it’s also seeking a £3.1bn funding package for 2021-2022 and £1.5bn for 2022-2023.

Currently, TfL works without any annual government funding, relying instead on income from fares. It also gets short-term agreements for specific projects, such as Crossrail.

The finances of the authority, chaired by London mayor Sadiq Khan have been hammered by the COVID-19 crisis, due to declining passenger numbers, which the body has warned can take years to return.

“TfL faces an extremely serious finance challenge given the long-term projected impact on operating income.” But, despite the warning, according to the plans its debt has now reached the “limits of affordability” which means it can borrow big sums in the future.

TfL said that long-term financial deals similar to Network Rail and Highways England would put the group on a more stable footing and allow for “further efficiencies.”

Ultimately, the plan is to save TfL at least £750m. To achieve this, bus services and off-peak tube services would be cut by 4%, while the re-opening of the night services could be delayed.

Fares are due to rise from 1 March, including a 5p increase for each bus journey to £1.55 and a 2.6% rise in travelcard season tickets.

Meanwhile, Khan has come under fire for plans to extend the congestion charging zone.

Drivers entering Greater London could be charged £3.50 a day — or £5.50 for a more polluting non-ULEZ (ultra low emission zone) compliant car.

As part of the plans, Canary Wharf station — the east London financial hub — could move from Zone 2 to Zone 1, “reflecting change in London’s geography.”

The move could generate around £25m beyond 2021-2022 as fares in and to Zone 1 are more expensive than outer London travel areas.

READ MORE: Crossrail project faces being 'mothballed' without funding, transport chief warns

Britain has spent billions subsidising the rail network since the onset of COVID-19, so that trains were able to continue running during lockdown, even as commuters stayed at home.

The number of passengers using trains fell to as low as 5% in the spring last year at the height of the pandemic. It recovered to around 30% in late summer, but dipped again during the second England lockdown in November.

In May 2020, the government gave TfL a £1.6bn bailout and it received a further £1.8bn in November last year, in exchange for Khan’s agreement to cut fare concessions.

The capital generates 23% of the UK's gross domestic product (GDP) and is a net contributor to the Treasury of £38.9bn.

In December, the government cut £1bn from funding to upgrade the UK’s railway infrastructure.

The rail budget covers a programme of investments to improve passengers and freight services across the largely Victoria-era railway systems in the country.

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