London’s transport authority has set out demands for a £15.8bn multiyear capital funding package from central government, far beyond the current Covid-19 crisis, to allow the body to maintain the city’s creaking infrastructure.
Transport for London, which is chaired by Labour mayor Sadiq Khan, called for the new funding agreement — of £1.6bn a year from 2023 to 2030 — in a submission to ministers unveiled on Friday.
It also argued that the government should agree a £3.1bn funding package for 2021/22 and £1.5bn for 2022/23.
TfL operates without any annual funding from central government, relying instead on income from fares, along with short-term funding agreements for specific projects such as Crossrail, the west-east line under the city.
TfL’s finances, which were shaky before the start of 2020, have been ravaged by the coronavirus pandemic, with the body warning that it could take years for passenger numbers to return to pre-crisis levels.
“TfL faces an extremely serious finance challenge given the long-term projected impact on operating income,” it said.
At the same time its debt burden has reached the “limits of affordability”, meaning it will not be able to borrow significant sums in future, according to the document.
It argued that a more long-term financial agreement, similar to those provided to Network Rail or Highways England, would allow for “further efficiencies” and put the group on a more stable financial footing.
This would fund projects including new trains and signalling for the Piccadilly Line, station upgrades, step-free access schemes and bus electrification.
The group received government bailouts worth £1.6bn in May and £1.8bn in November last year, in return for Mr Khan agreeing to cut fare concessions.
The two sides will shortly enter talks to thrash out a fresh agreement, to be finalised by the spring, for 2021/22 while separate discussions will be held over TfL’s request for £12.7bn for the later years
Meanwhile the mayor has told the government that he wants London to be able to retain the £500m in vehicle excise duty receipts generated by the city’s drivers, to help repair TfL’s finances.
The submission warns ministers that, unless this happens, TfL would have to bring in a £3.50 charge for cars entering Greater London if they are not registered in the capital. The charge would increase to £5.50 for some of the dirtiest cars.
The 112-page document also says that the Underground zone map could be redrawn, with Canary Wharf moved into zone 1, to raise more money. Changing the designation of the east London cluster of skyscrapers would raise £25m a year because incoming commuters would have to pay higher fares.
TfL said these ideas would be the subject of consultation over the next nine months.
Mr Khan has set out fare rises from March 1, including a 5p increase for each bus journey to £1.55 and a 2.6 per cent rise in travelcard season tickets.
Paul Scully, the Conservative minister for London, said the Greater London boundary charge was an “extraordinary notion” that would damage trade in the suburbs.
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