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Government yields and bails out TfL with up to £1.9bn

CALLS for a financial rescue at Transport for London have been accepted by the Government which is making up to £1.9 billion available, although around £500 million will be a loan rather than a grant.

The Mayor of London Sadiq Khan had warned that TfL was now so short of money that some services would have to be withdrawn, in spite of the plan to improve them from Monday to cater for an increase in commuters resulting from an easing of lockdown restrictions.

TfL had also pointed out that its revenues had plunged, with Underground journeys down by 95 per cent and bus travel by 85 per cent. Journeys by bus are also free at the moment and the front doors are out of use, to protect drivers.

The organisation recently furloughed 7,000 staff in a bid to reduce its costs, and has ordered a ‘safe stop’ of construction projects which were not seen as essential.

London transport commissioner Mike Brown said: ‘I welcome this support from Government which will help us continue to get London moving and working again, safely and sustainably.

‘London’s transport network is absolutely fundamental to the economic, social and environmental health of the Capital. Throughout the pandemic, transport workers have played a heroic role in the response to the virus –ensuring NHS and care staff have been able to get to work and save lives.

‘We have worked closely with the Government and Mayor as part of the national effort to fight the virus, rapidly reducing passenger numbers to levels not seen for 100 years. This has meant that our fare and other revenue has fallen by 90 per cent. We now need to help London recover as restrictions on movement are gradually eased.’

The support agreed with the Department for Transport consists of an ‘Extraordinary Support Grant’ of £1.095 billion using provisions of the Greater London Authority Act, plus a loan of a further £505 million, which may be drawn in stages.

Because predictions of demand are uncertain these amounts could rise or fall, with an absolute ceiling of £1.9 billion. The arrangement will be kept under review, and applies until 17 October.

The deal has been hailed by unions as well as the Mayor, but London mayor Conservative candidate Shaun Bailey told the BBC: ‘The coronavirus highlighted existing structural flaws within TfL’s balance sheet – the primary cause was our profligate mayor.’

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