Transport for London will have to axe services if the government does not agree to a financial rescue package by the end of the day, Sadiq Khan warned on Thursday.
The London mayor said the capital’s transport authority was “running out” of money and said he was concerned about the consequences if the Department for Transport failed to step in to plug an anticipated £4bn black hole in TfL’s finances this year.
“Unless the government today gives us confirmation of the grant that we need, the consequences could be quite severe and the implications for all of us will be huge,” the Labour mayor told LBC radio.
“We’ll have to start reducing services. The only way to balance the books is to cut services.”
TfL, which has seen its government grant gradually withdrawn in recent years, now relies almost entirely on fare income — but passenger numbers have plunged to a trickle during the coronavirus pandemic.
The agenda for TfL’s finance committee meeting earlier this week said there was still a gap of £3.2bn in the authority’s emergency budget for this financial year to the end of March 2021.
The authority is still in talks with the DfT and Treasury about a rescue package that is expected to include conditions, including the postponement of several new projects such as proposed Bakerloo Line extension.
Downing Street said talks were ongoing. “It is a commercial discussion. We remain in close contact with the mayor and TfL to look at how we can support them.”
The cabinet was told during a meeting on Thursday morning that talks were at an “advanced stage”.
“Our priority is on reaching an agreement which keeps critical services running for those passengers who must use public transport to get to work,” Downing Street said.
“That means protecting key routes, rapidly increasing the number of services available and protecting the interests of taxpayers in the long term.”
As part of government plans to ease the lockdown, ministers this week urged people working in some sectors to return to work. At the same time the government told those that could work from home to do so to prevent public transport from being swamped with commuters.
Transport officials have warned the Tube can only run at about 15 per cent capacity while strictly adhering to 2m social distancing guidance and there was anecdotal evidence of some trains and buses in the capital being overcrowded.
TfL is not only demanding support for the coming months but also for more long-term support because it does not expect passenger numbers to return to pre-lockdown levels for several years. TfL data show the number of Tube journeys on Wednesday were 94 per cent down on the same day a year earlier albeit with some bottlenecks.
“It is inconceivable that TfL won’t need government funding not only for 2020-21 but also for 21-22,” said Tony Travers, a professor at the school of public policy at LSE. “That means the need for a very significant government grant this year and the year after.”
Mr Khan said the authority was spending £600m a month with hardly any income to cover those costs. “We’re the only transport system in western Europe that gets no government grant,” he said.
“We’re paid for ostensibly by the fares we bring in, the congestion charge and by advertising. Over the past two months, we’ve lost more than 90 per cent of our fares, advertising is down and so is the congestion charge.”
TfL started the crisis with a cash reserve of over £2.1bn but that buffer has rapidly fallen, the mayor said.
Keith Prince, Conservative GLA transport spokesman, accused the mayor of “political gameplay”, saying that the authority still had £1.2bn in reserves. “Sadiq Khan needs to stop playing politics with people’s lives,” he said.
But Mr Khan pointed out that the authority was obliged by law to keep two months’ worth of money in reserve to fund services and has been negotiating with the Conservative government for some time.
“We’ve been involved in weeks and weeks of negotiations with the government and it is really hard to get support from them,” he said. “Being blunt, today is the last day.”
The finance committee paper said there had been a 95 per cent reduction in journeys on the Tube, and an 85 reduction in journeys on buses. This has caused an overall income loss of around 90 per cent including non-passenger incomes.
Yet the authority has continued to run 80 per cent of bus services and half of regular Tube services. Any cuts to service will make it harder for people to return to work in a socially-distanced way.
While the authority has furloughed 7,000 staff — a quarter of the total — and stopped 300 construction projects these savings do not cover the loss from the plunge in revenue.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50LzcwZDY1N2Q1LTJjNDgtNDMwZi04NmJmLThiYWRjZDM3ZDgwYdIBP2h0dHBzOi8vYW1wLmZ0LmNvbS9jb250ZW50LzcwZDY1N2Q1LTJjNDgtNDMwZi04NmJmLThiYWRjZDM3ZDgwYQ?oc=5
2020-05-14 14:38:01Z
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