TfL ‘likely to get funding deal in days to stop going bankrupt’

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ransport for London says it is “likely” that a long-term funding deal will be agreed with the government within days, which will avoid the risk of TfL effectively declaring itself bankrupt and drastically reducing its services.

TfL’s most recent deal expired last Wednesday and it has been unwilling to agree to new terms offered by the Department for Transport, which include nearly £3.6billion in capital funding for plans to infrastructure and maintenance over the next two years.

TfL commissioner Andy Byford told an emergency board meeting last night that this was due to concerns over the total amount on offer – TfL is also seeking around £900million in funding day to day until the end of next March – and the conditions attached.

Andy Byford (left) and Sadiq Khan (right)

/ Reuters

Mayor Sadiq Khan, who chairs the council, said: “It is extremely disappointing that we have not yet come to a conclusion. It’s not for lack of trying, I hasten to add, on TfL’s part.

“Some of the terms we can’t agree to. They’re not political in nature, but they add significant operational issues and issues of principle that we just can’t agree on.

If TfL is unable to achieve a balanced budget, it is required to issue a ‘Section 114’ notice which prevents expenditure on loss-making services. This “nuclear option” could potentially force the closure of part of the metro and bus network.

TfL chief financial officer Patrick Doig said ‘constructive conversations’ with the DfT meant the requirement to issue an S114 notice was ‘not currently in place’. He warned the situation could change if the talks failed, but said a funding deal was the “likely outcome”.

Nick Rogers, Conservative transport spokesman in the London Assembly, said the mayor “must face the facts about TfL’s finances”.

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