The UK government has announced a capital funding settlement for 2024 with Transport for London (TfL).
According to the Department for Transport, the £250m announced today [18 December 2024] is for TfL to continue delivering its investment programme, including new trains for the Piccadilly line, and not to support the company’s day-to-day operations.
In total, some £6.6bn has been provided to TfL since 2020 to help maintain operations after its ridership and revenue plummeted as a result of impact of the Covid-19 pandemic on public transport.
Under the last settlement, announced in August 2022, some £1.2bn has supported almost £3.6bn of major transport projects in the UK capital, including new road schemes and increased bus priority.
UK transport secretary Mark Harper said: “The current longer-term settlement will end in March 2024, and I continue to encourage TfL to modernise and to become a modern, effective, efficient and financially stable operator.
“Government support has enabled TfL to be on track to being financially sustainable and this capital settlement therefore requires TfL to demonstrate to government that it is financially sustainable at the end of March 2024, and it will provide to government in July 2024 its plan demonstrating how it will maintain and strengthen its financial sustainability from the financial year 2024 to 2025.”
TfL said it is working to achieve operational financial sustainability this year and its draft business plan, which was considered by the board earlier this week, sets out its plans to ensure this continues.
In response to the government’s funding announcement, Andy Lord, London’s transport commissioner, said: “It is good news that we have now reached an agreement with the government on the capital support that they will provide over the next year, and we are grateful for the support.
“However, we will now need to reassess our recent draft business plan and address the impact of the continuing shortfall in funding. That work is underway so that we can confirm as soon as possible what we will deliver for London.”
TfL reportedly benefits from around £2bn every year in retained business rates following a measure in the 2021 Spending Review, which saw the government continue more than £1bn of enhanced retention for TfL’s capital investment, on top of its fares and other income sources.
According to the goverment, the funding has been provided to help modernise TfL and enable it to run more efficiently, as well as reach more stable financial footing.
As part of the deal, TfL will set out in July its plan to maintain and strengthen its finances going forward while continuing work to reform its pension scheme and seeking efficiencies in its investment programme.
Responding to the funding settlement announcement, Ben Curtis, external affairs manager at charity Campaign for Better Transport, said: “We welcome the provision of cash for the UK capital’s transport network.
“However, whilst this settlement will ensure the wheels keep turning, it is not helpful to the general economy of the country to keep London on such a short leash.”
Achievements and innovations in public transport will be celebrated at the third annual CiTTi Awards, which will be held on 26 November 2024 at the De Vere Grand Connaught Rooms in London. Nominations officially open in March 2024. Please visit www.cittiawards.co.uk to learn more about this unmissable event for the UK’s transportation sector.