Transport for London was forced to ask the Government for another major bailout today as the network stricken by the Covid crisis faces a potential funding black hole of up to £5 billion.
The deepening black hole means a number of projects have been put on hold, placed question marks over the future of other developments and raised the prospect of higher fares.
The Government has already provided a £1.6 billion injection — most of which has been used. However, continuing low passenger numbers means TfL needs further government support.
TfL is anticipating a further £2.9 billion will be required during 2021-22, according to its revised budget published today.
This may change depending on whether there is a second spike or a coronavirus vaccine arrives and some of the gap can be plugged through business rates.
Transport bosses gave a stark warning that the pandemic is having a serious impact on projects with “very difficult choices” expected to be made.
They added: “Without the revised funding model that London needs, which would give long-term certainty of sustainable funding, some projects will be unable to progress.”
Projects being paused include the Rotherhithe to Canary Wharf ferry and the transformation of Croydon Fiveways junction.
TfL also warned they needed to be “realistic” about what major future projects will be affordable over the next decade including the proposed DLR extension to Thamesmead, the Bakerloo extension and Crossrail 2.
TfL’s latest modelling shows that public transport usage is likely to remain “significantly down” for the foreseeable future. At the peak of lockdown, TfL’s passenger income was reduced by more than 90 per cent compared with 2019.
Mayor Sadiq Khan and TfL point the finger at their funding model which means they rely on passenger fares for 70 per cent of their revenue. This, they say, is unlike other major cities such as New York and Madrid.
But ministers and critics have accused City Hall of mismanagement and losing control of TfL’s finances.
Mr Khan said: “Prior to the pandemic TfL were on course to reduce their operating deficit by 86 per cent and increase their cash balances by 31 per cent. TfL’s revised budget, should sufficient funding be provided by the Government in the months ahead, will keep services running safely and support London’s recovery from the pandemic.”
Andy Byford, London’s Transport Commissioner, said: “Inevitably, very difficult choices have had to be made about the pace at which projects can be funded and completed. In the current climate, some projects will have to be paused.
“We have a real chance, through our supply chain, to support jobs across the UK and help the country recover from the pandemic through a wide range of ‘shovel ready’ projects.”
It was announced overnight that the heavily delayed Crossrail line is going to be postponed again, as predicted by the Standard earlier this week.
The central section of the line from Berkshire to Essex via central London was expected to open in summer 2021 but Crossrail said Covid-19 had made the existing pressures “more acute”.
A Department for Transport spokesperson said: “We are undertaking a comprehensive review of TfL’s finances to ensure it is put on a sustainable footing for the future.
“We are also introducing special representatives to attend the TfL board which will strengthen oversight and challenge on behalf of the taxpayer alongside offering expertise.
“This will protect vital transport services across London, creating a sustainable TfL legacy and delivering on our ambitions for cycling and walking.”