Transport for London (TfL) has published a revised budget for 2021/22, which it said closes the gap between costs and depleted income, but will still leave it needing a further Government bailout of half a billion pounds.
The revised budget outlines how it remains on track to deliver the recurring savings required as part of its business plan and work towards becoming financially sustainable by April 2023.
The transport authority said that as one of the only major cities in Europe not to receive a regular Government grant to cover its day-to-day operations, and with fares making up over 70% of its pre-pandemic operating budget, its finances have been drastically reduced as ridership plummeted.
TfL said the number of journeys made on its services has seen significant growth since the easing of Government restrictions began and is now at 54%, of pre-pandemic levels, rising to 60-65% at weekends.
With higher operational savings, ‘some deferrals of elements of the capital programme into later financial years’, and use of its own cash, TfL now assumes a full year (external) funding requirement of £1.9bn. This is down from £2.7bn in its March budget.
Of this, £1.4bn has already been secured through recent funding agreements with Government, leaving a £500m gap for the remainder of this financial year beyond the 11 December end date of the existing Government funding agreement. TfL said it continues to discuss the need for a longer-term deal with the Government.
Mayor Sadiq Khan said: ‘London’s public transport network is essential to support our city’s recovery and improving ridership demonstrates the importance of being able to run safe and frequent services. But very difficult decisions remain as the pandemic has had a devastating effect on TfL’s finances due to the reliance on fare income.
‘If we don’t get further Government support in December, there could still be a £500m gap this year and so I urge ministers to treat TfL as they do the private rail operators, and commit to a long-term funding agreement.’
Work taking place as part of the Bank Station Upgrade
TfL said the budget will see service levels on the Tube, bus and rail services remaining the same as outlined in its January 2021 Financial Sustainability Plan and ensure the delivery of a wide range of key improvements and schemes across London.
These projects include progressing major renewals on bridges and tunnels owned by TfL ‘to keep them safe, reliable and operable’ such as the A40 Westway and Rotherhithe Tunnel. The budget includes £24m for major highway infrastructure.
TfL said that with Government investment it could make further improvements that would help deliver a number of Government priorities such as decarbonisation and boosting productivity but that the current short-term funding agreement has restricted its ability to plan, commit and deliver active travel and borough travel schemes this financial year.