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Sadiq Khan Warns Of Fare Increases And More Tube Strikes As TfL Agrees Funding Deal

Sadiq Khan Warns Of Fare Increases And More Tube Strikes As TfL Agrees Funding Deal

Sadiq Khan Has Warned Of The Possibility Of Higher Fares And More Strikes After TfL Struck A New Funding Deal With Government (Alamy)

4 min read

Sadiq Khan has warned fare increases and more strikes could be on the horizon, after Transport for London reached a “far from ideal” financial agreement with the government to keep the capital’s services running.

Officials have struck a deal which guarantees a funding settlement until March 2024, which includes £1.2bn of upfront funding, and which the government said will support projects worth more than £3.6bn. 

TfL had been running on its cash reserves, having previously received a number of cash packages from the government since the start of the pandemic, when passenger fares – on which their cash flows rely – fell significantly. 

The Mayor of London welcomed the “good news” of having won a number of key concessions from the government which "mean we will be able to avoid TfL having to make the devastating cuts to vital transport services previously proposed,” but said that there was “no choice but to accept” some “onerous strings attached”. 

In a statement on Twitter, Khan said: “I want to be frank with Londoners, this deal is far from ideal. 

 

“The government is still leaving TfL with a significant funding gap, meaning we will likely have to increase fares in the future and still proceed with some cuts to bus services. 

“There are also some onerous strings attached, such as the government’s condition requiring TfL to come up with options for reform of TfL’s pension scheme at pace, which could well lead to more industrial action and more disruption for commuters.” 

Last week, PoliticsHome reported that there could have been “catastrophic” consequences if TfL had reached the point of bankruptcy. 

Nick Bowes, chief executive at the Centre for London think tank, who previously worked on policy with London mayor Sadiq Khan at City Hall described money as "ticking down” with “less and less by the day left in their bank account.” 

“They're going to run out of cash at some point and at that critical moment, the consequences could be catastrophic,” he added, describing a risk of fewer services, salaries being cut and suppliers not being paid. 

Following Tuesday’s announcement that a deal had been secured, Transport Secretary Grant Shapps said that the government has “time and again shown our unwavering commitment to London," but that ministers "have to be fair to taxpayers across the entire country".

He added: “This deal more than delivers for Londoners and even matches the Mayor’s own pre-pandemic spending plans but for this to work, the Mayor must follow through on his promises to get TfL back on a steady financial footing, stop relying on government bailouts and take responsibility for his actions.

"Now is the time to put politics to one side and get on with the job – Londoners depend on it.”

Transport for London Commissioner Andy Byford said: “The support offered by government left an unfunded gap in our budget, which we have been working hard to identify how we will fill. This work has made good progress and we are confident that we will achieve an outcome that allows us to balance our budget and maintain our minimum cash balance. 

“We will need to progress with our plans to further modernise our organisation and make ourselves even more efficient, and we will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network. 

“We are grateful for the support of both the Mayor and the government as we now set out to continue serving the capital and investing in safe and reliable services for the millions of people who need them.”

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