GovWire

Ministers and Transport for London (TfL) have today (18 December 2023) agreed a new 250 million funding injection for 2024 to improve Londons transport system.

The government has been clear that this investment is for TfLto continue delivering its investment programme, including new trains for the Piccadilly line, a scheme which will support an estimated 700 skilled rail manufacturing jobs in Yorkshire and up to 2,000 morejobs in supply chains across the country.?

Rail Minister, Huw Merriman, said:

Were investing in transport across the country and todays agreement will have a tangible, positive impact not just for people travelling in and around the capital but also the millions who visit every year.

It is fair for Londoners and taxpayers, underpinning projects that will support hundreds of skilled manufacturing jobs in our vital rail sector.

We have investedbillions into the capitals transport system in recent years. This investment must be well managedin a way that doesnt unfairlyburdenthe pockets of taxpayers and motorists.

Andy Lord, Londons Transport Commissioner, said:

Through a huge effort to reduce costs and rebuild our ridership and revenue following the pandemic,TfLis now on track to be financially sustainable in terms of its day-to-day operations. We are also able to cover the cost of the majority of our capital investment.

We, alongside Londons business stakeholders and others, have consistently made the case that additional government support for capital investment in transport is needed if we are to be able to continue to deliver vital improvements to Londons transport network, unlock new homes and support growth across London and the UK.

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 deliverforLondon.

With central government having already providednearly 6.4 billion since 2020 to support transport in London, this latest package?supports?much-needed?capital? investment. TfLis working to achieve operational financial sustainability this year and its draft business plan, considered by the board earlier this week, sets out its plans to ensure this continues.

Under the last settlement, 1.2 billion of government funding supported almost 3.6 billion of major transport projects in the capital, including the completion of a number ofmajor projects, new road schemes and increased bus priority.

TfLnow?benefitsfrom around 2 billion every year in retainedbusiness rates following a measure in the 2021 Spending Review,?which saw government continue over 1 billion of enhanced retention forTfLs?capital investment, on top of its fares and other income sources.?

In providing this funding, the government soughtto helpTfLmodernise, operatemore efficiently and reach a more stable financial footing. Todays agreement recognisesTfLhas made progress in this regard and that it is on track to reachfinancial sustainability by the end of the financial year. As part of the deal,TfLwillset out in July its plan to maintainand strengthen its financesgoing forward while continuing work to reform its pension schemeand seeking efficiencies in its investment programme.

The government and TfL agree that under this new agreement funding?cannot be used to supportTfLs day-to-day operations.

While delivering transport services in the capital is ultimately theMayorsresponsibility, the Department for Transport will continue to engage closely withTfLon its wider and future?capital?plans.

Read the Secretary of State for Transports letter to the Mayor of London.