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Transport for London (TfL) has successfully secured a significant funding package of £1.08 billion in an agreement with the government. This crucial development comes in response to Transport for London’s substantial decrease in income due to the ongoing pandemic and the resulting decline in passenger numbers. Confirming the government's commitment, Transport for London announced that it will receive a minimum of £1.08 billion in funding for the seven-month period leading up to December 11th. Moreover, this funding has the potential to increase to £1.78 billion if passenger income falls below the anticipated levels. They may be required to repay a portion of the £1.08 billion if its income surpasses the expectations.
The government's financial support is contingent on Transport for London implementing cost-cutting measures to ensure financial sustainability. In response, Transport for London has outlined the necessity of identifying an additional £900 million in savings, on top of the £730 million already accounted for in its existing business plan. As part of these cost-cutting efforts, Transport for London will conduct a comprehensive review of its medium-term capital works programme. The specifics of the revised programme, including the projects that will be affected, will be determined in collaboration with the government during the upcoming 2021 spending review.
Earlier this year, the Department for Transport requested that Transport for London explore the possibility of reducing its capital budget by up to 30%. Excluding Crossrail, Transport for London’s current year's capital works budget amounts to £2.2 billion. London's transport commissioner, Andy Byford, emphasized the significance of the funding agreement, highlighting that it not only provides a base funding of £1.08 billion but also offers additional support to maintain near-full service levels, stimulating London's recovery. Byford further underscored the importance of ongoing improvement projects such as the Elizabeth line, Northern line extension, and expansion of London Overground in enhancing the city's transportation infrastructure.
In addition to the capital spending review, Transport for London has made commitments to generate up to £1 billion in new annual income starting from 2023. This includes the establishment of a dedicated commercial property company to facilitate the delivery of new housing projects and a collaborative effort with the Department for Transport to introduce driverless trains on the London Underground.
The Transport Salaried Staffs' Association (TSSA), a prominent transport workers union, has voiced strong opposition to potential job cuts resulting from the cost-cutting measures. Manuel Cortes, the general secretary of TSSA, expressed concerns over the future of London's transport system and the detrimental impact these proposed cuts could have on Transport for London. Cortes emphasised the union's unwavering position, asserting that any attempt to enforce compulsory redundancies as part of the cost-cutting measures will be met with industrial action ballots.
Transport for London’s securing of the £1.08 billion funding package marks a significant step in ensuring the financial stability and continued operation of London's vital transportation network. As the organisation works towards implementing cost-cutting measures, revising its capital works programme, and exploring avenues for generating additional income, the path to recovery and future sustainability in London's transport system continues to evolve.