Government has struck a deal to bail out Transport for London to the tune of £1.6Bn in order to help keep key travel services running in the capital despite the financial impact of Covid-19.
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A funding package has been drawn up which comprises a grant of almost £1.1Bn and a £505M loan. The deal will see service levels increase as soon as possible to ensure people who have no alternative but to use public transport can follow social distancing guidelines on trains and buses.
“We must drive an increase in services to support social distancing and ensure our capital keeps moving, driving the economic recovery of this country going forward,” said Transport Secretary Grant Shapps.
The agreement also involves the reintroduction of fares on buses and reinstatement of the congestion charge, which were both paused since the beginning of lockdown. Focus will also be placed on promoting active travel through new segregated cycle lanes, footway extensions and road closures to traffic.
“This deal will encourage a real move towards greener and healthier walking and cycling options, ease pressure on our public transport and provide certainty and stability for London’s transport services in the future,” added the Transport Secretary.
From next year, the Mayor of London has agreed to increase fares on all modes of travel. The Government will also carry out a review of TfL’s future financial position and structure, including the potential for efficiencies.
London’s Transport Commissioner Mike Brown said: “We have worked closely with the Government and Mayor as part of the national effort to fight the virus, rapidly reducing passenger numbers to levels not seen for 100 years. This has meant that our fare and other revenue has fallen by 90%.
“We now need to help London recover as restrictions on movement are gradually eased, with public health and more active forms of travel at the forefront of our thinking.”
Also commenting on the agreement, think tank Centre for London’s deputy director Richard Brown said: “Given the severity and nature of the current crisis, extraordinary financial support for Transport for London was inevitable, and essential to the recovery of the UK economy.”
But, he added: “Higher fares will hit Londoners’ pockets at a tough time for many workers. This underlines the need for a new financial settlement for Transport for London, which enables the Mayor to raise money regionally to pay for the transport system that drives the capital’s and the country’s economy.”
Transport for London’s bail out comes after the Government announced a £2Bn package of transport infrastructure funding to help support the UK’s economic recovery. This included a pledge of £1.7Bn to improve local roads, repair bridges and carry out road maintenance.
Meanwhile, six major regional transport authorities outside London have signed a letter to Transport Minister Baroness Vere urging funding to help them increase public transport services during the new phase of lockdown.
Signatories to the letter include Transport for Greater Manchester, Transport for West Midlands, Transport North East, Liverpool City Region Combined Authority, the South Yorkshire Passenger Transport Executive and the West Yorkshire Combined Authority.