Sadiq Khan says TfL bailout 'not deal he wanted' and says government is forcing fare rises
15 May 2020, 08:16 | Updated: 15 May 2020, 08:35
Sadiq Khan has said the Government's £1.6 billion bailout for Transport for London was "not the deal he wanted" but that it was the "only deal they put on the table."
The Mayor of London said Thursday’s £1.6 billion bailout will make "ordinary Londoners pay the cost for doing the right thing on Covid-19," with the Government calling for fares to rise in January for the first time in four years as a result.
He said Covid-19 has had a "catastrophic impact" on TfL's finances and he was forced to accept the deal to keep services running.
The Tube will also be required to return to a full service - the same level of operation as before the coronavirus lockdown.
The bailout came hours after Mr Khan told LBC that TfL would run out of cash by the end of Thursday as passenger numbers and revenue plummet because of the Covid-19 lockdown.
In a statement, the Mayor said: “We have just reached agreement with the Government on a funding package to allow TfL to run public transport safely in London for the next four and a half months. This was necessary because Covid-19 has had a catastrophic impact on TfL’s finances – as it has on every transport provider in the UK.
“I want to be completely honest and upfront with Londoners – this is not the deal I wanted. But it was the only deal the Government put on the table and I had no choice but to accept it to keep the Tubes and buses running.”
Sadiq Khan warns TfL will run out of money today without government grant
There was a ten per cent increase in journeys this week after the government recommended people in England go back to work if they cannot work from home.
But over the past two months, fares income has fallen by 90 per cent, leading to the Mayor’s claim that TfL would have run out of money on Thursday without Government help.
He added: “In the last few years, London has been the only major city in western Europe that hasn’t received direct Government funding to run day to day transport services since it was cut by the last Government. This means we rely very heavily on passenger fares to pay for the services we run. Fares income has fallen by 90 per cent in the last two months because Londoners have done the right thing and stayed at home – so there simply isn’t enough money coming in to pay for our services.
“We are running as many services as humanly possible given the number of staff off sick, shielding or self-isolating. As staff are returning to work we are increasing services as fast as possible to get back to 100 per cent. From Monday we aim to run around 85 per cent of buses, 75 per cent of Tubes, restore the Circle line and re-open some of the 37 closed stations.”
The Mayor said the deal is a “sticking plaster” and TfL will need to negotiate a “new funding model” to ensure its long-term future.
He said as part of the deal, the Government also called for free travel to be suspended for Freedom Pass and 60-plus card holders at peak times.
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Mr Khan continued: “The Government is, in effect, making ordinary Londoners pay the cost for doing the right thing on Covid-19. They want fares to go up next January – ending the four years fares freeze I delivered after the last election. They have insisted that free travel is temporarily suspended for Freedom Pass and 60-plus card holders at peak times. We agreed it was the right thing to review the Congestion Charge.
“The Government has also insisted that, unlike the deals done elsewhere in the country, TfL takes on £505 million of additional debt. This will undo the hard work we’ve put in to fix TfL’s finances over the last four years – when TfL’s operating deficit has reduced by 71 per cent.
“This deal is a sticking plaster. The old model for funding public transport in London simply does not work in this new reality – fares income will not cover the cost of running services while so few people can safely use public transport.
“Over the next few months we will have to negotiate a new funding model with Government – which will involve either permanent funding from Government or giving London more control over key taxes so we can pay for it ourselves - or a combination of both.
“TfL and City Hall will do all that we can to enable London’s recovery. We will run as many trains and buses as possible. But we need Londoners’ help. We must not use public transport unless absolutely necessary. People who can work from home must do so. Everyone must walk and cycle more. People should wear a face covering throughout their journeys.
“I promise to continue being as upfront and clear as possible with Londoners about the challenges facing our city. This is not the deal I wanted for our city, but together we can overcome the challenges we face.”
London's Transport Commissioner Mike Brown MVO said: "I welcome this support from Government which will help us continue to get London moving and working again, safely and sustainably.
"London’s transport network is absolutely fundamental to the economic, social and environmental health of the Capital. Throughout the pandemic, transport workers have played a heroic role in the response to the virus –ensuring NHS and care staff have been able to get to work and save lives.
"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 per cent.
"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.
"We have been operating up to 70 per cent of peak Tube services and over 80 percent of bus services with many of our staff ill, shielding or in self isolation. From next week we will further increase services beyond this as we progressively build towards restoring services to pre-covid levels.
"To maintain social distancing wherever possible, the transport network needs to operate differently during this extraordinary period. In line with advice from the Government and Mayor we are encouraging people who can work from home to continue to do so to enable the people who must travel to do so safely.
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“We are asking everyone to try and avoid the busiest times to support social distancing wherever possible, to wear non-medical face coverings when they do need to use public transport, and to walk and cycle whenever possible. We are providing extensive new cycling and walking facilities to support journeys by these means.
"Enormous challenges remain, including agreeing longer term sustainable funding for transport in the Capital. In the meantime, we will continue to do everything in our power to help deliver a successful recovery for our great city."
