Transport for London is running on its cash reserves and may be forced to make emergency cuts as the stalemate over a long-term funding agreement with the Government drags on.
The most recent emergency bailout expired on August 3 following three short-term extensions, with TfL having requested more time to consider the Government’s “complex” draft long-term settlement proposals.
An extraordinary meeting of TfL’s board was called on Tuesday evening to discuss the situation, with no financial support now in place for the first time since the beginning of the COVID-19 pandemic.
Details of the proposed offer from the Government have not been made public due to “market sensitive” information contained in the draft, though Mayor of London Sadiq Khan told board members that TfL was “unable to accept” some of the conditions set out by the Department for Transport.
Mr Khan said: “The deal expired six days ago, and it is extremely disappointing that we haven’t reached a conclusion yet. It’s not through want of trying, I hasten to add, on the part of TfL. What I can say is that some of the conditions, we are unable to accept. They are not political in nature, but they have significant operational issues and issues of principle that we simply can’t agree to.
NOW READ: TfL announces return of all five Night Tube Lines
“It’s vitally important to get the right deal, not only for Londoners and the London economy, but for jobs and growth across the country.”
In addition to the billions of pounds of capital funds TfL has requested to deliver large-scale projects over the coming years, it also requires a further £900million of revenue support to keep services running until the end of the financial year.
Board papers released ahead of Tuesday’s meeting revealed that TfL may be forced to consider issuing a Section 114 (S114) notice, which would restrict any new spending, if support is not granted.
The notice would mean that TfL is unable to balance its budget and “careful consideration would need to be given to what services TfL is able to continue to run within available funds”.
The board papers do, however, state that “it is not considered necessary to issue an S114 report at this time” as negotiations with the Government over a new funding deal are ongoing.
For the latest headlines from the City of London and beyond, follow City Matters on Twitter, Instagram and LinkedIn.