After a series of negotiations and short-term funding settlements, TfL now has a financial agreement in place with the UK Government that will last until March 2024.
The money will support £3.6 billion worth of projects, and the government says this will take overall funding to more than £6 billion.
TfL says that the negotiations have taken weeks, and describes the settlement as “hard won”.
It also says the deal will help safeguard its services during a time of economic uncertainty.
On the money being announced, transport secretary Grant Shapps said on Twitter: “Today I agreed a long-term settlement with TfL, which will support nearly £3.6bn of projects and bring total funding to over £6bn in a way that is fair to all taxpayers.
“The Mayor must now follow through on his promises to keep TfL on the path to financial sustainability by 2023.”
Sadiq Khan says the deal saw TfL get “a number of key concessions from the government”.
He adds: “However, 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.”
He also said there were “onerous” strings attached which the parties negotiating with the government had “no choice” but to agree to. This includes the requirement for TfL to revise its pension scheme “at pace” — which the mayor thinks could lead to more industrial action.
Transport for London Commissioner Andy Byford said: “After weeks of negotiation, we have today reached agreement with Government on a funding settlement until 31 March 2024. This agreement, which was hard won, means that we can now get on with the job of supporting London’s recovery from the pandemic – to the benefit of the whole country. There is no UK recovery without a London recovery, and no London recovery without a properly funded transport network.
“The agreement with Government means that across the funding period, TfL expects to receive further base funding of around £1.2bn from Government until March 2024 and gives TfL ongoing revenue support should passenger numbers not recover at the rate budgeted, which is crucial at this time of ongoing economic uncertainty. It helps us avoid large-scale cuts to services, and means that we will commit £3.6bn to capital investment over the period, with around £200m of new capital funding from Government beyond previously budgeted sources like business rates, which were devolved to the Mayor in 2017. The agreement also allows us to increase our asset renewal programme to help ensure our network remains reliable, and means we can restore our Healthy Streets programme, making our roads safer, and more attractive for those walking and cycling.
“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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