On 14 May, the UK Government agreed a grant of GBP1.095bn (EUR1.22bn) and a loan of GBP505m (EUR561.6m) from the Public Works Loan Board to support Transport for London (TfL) operations until 17 October. Backdated to 1 April, the agreement requires TfL to restore services to normal levels to help passengers follow social distancing guidelines.
Bus fares will be reinstated and an increased congestion charge introduced for driving into the centre of the capital; both had been suspended in March. Various forms of peak-hour concessionary travel and free travel for under-18s were to be temporarily suspended from 15 June; special arrangements are to be made for children eligible for free travel to school.
Services increased on all modes from 18 May including: Docklands Light Railway (80% of normal services, providing approximately ten-minute headways); London Trams (95% of normal services with ten-minute headways Wimbledon – Elmers End/Beckenham Junction and seven-minute headways New Addington – Central Croydon); and the Underground (75% of normal services and more stations re-opened).
The rescue package came after months of discusssion on the same day that London Mayor Sadiq Khan gave a radio interview indicating that the authority would run out of money by the end of the day. “Being blunt, today is the last day,” he said.
A London COVID-19 taskforce with Government and TfL representatives will oversee operational decisions during the crisis, promoting traffic management and active travel. There is also to be an “immediate and broad-ranging” review of the authority’s financial position and structure. Two Government representatives will be allocated to TfL’s board, its finance committee and its programmes and investment committee.
Since travel restrictions began in mid-March, TfL has seen a 95% reduction in Underground journeys, an 85% fall in bus travel and a 90% drop in income. As a result, it predicts a funding shortfall of around GBP3bn (EUR3.34bn).
The funding agreement includes the Mayor agreeing to increase fares in 2021 by RPI+1%, ending a four-year fares freeze.
Describing the deal as a “sticking plaster”, Mr Khan said: “I want to be completely honest and upfront with Londoners – this is not the deal I wanted. But it was the only deal the government put on the table and I had no choice but to accept it to keep the Underground and buses running.”
He emphasised that London was “the only major city in western Europe that hasn’t received direct government funding to run day-to-day transport services” in recent years, and with fares revenue down “there simply isn’t enough money coming in to pay for our services”, adding that “over the next few months we will have to negotiate a new funding model, which will involve either permanent funding from government or giving London more control over key taxes so we can pay for it ourselves – or a combination of both.”