- passengers in and around the capital to benefit from further £250 million government funding
- investment in upgrades will bolster manufacturing jobs and suppliers around the country
- latest package brings total government support for TfL to more than £6.6 billion since 2020
Ministers and TfL have today agreed a new £250 million funding injection for 2024 to improve London's transport system.
The government has been clear that this investment is for Transport for London (TfL) to 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 more jobs in supply chains across the country.
Rail Minister Huw Merriman said:
We're investing in transport across the country, and today's 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 invested billions into the capital's transport system in recent years. This investment must be well managed in a way that doesn't unfairly burden the pockets of taxpayers and motorists.
Andy Lord, London's Transport Commissioner, said:
Through a huge effort to reduce costs and rebuild our ridership and revenue following the pandemic, TfL is 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 London's 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 London's 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 deliver for London.
With central government having already provided nearly £6.4 billion since 2020 to support transport in London, this latest package supports much needed capital investment. TfL is working to achieve operational financial sustainability this year and their draft business plan, considered by the board earlier this week, sets out their 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 of major projects, new road schemes and increased bus priority.
TfL now benefits from around £2 billion every year in retained business rates following a measure in the 2021 Spending Review, which saw government continue over £1 billion of enhanced retention for TfL's capital investment, on top of its fares and other income sources.
In providing this funding, the government sought to help TfL modernise, operate more efficiently, and reach a more stable financial footing. Today's agreement recognises TfL has made progress in this regard and that it is on track to reach financial sustainability by the end of the financial year. As part of the deal, TfL will set out in July its plan to maintain and strengthen its finances going forward, while continuing work to reform its pension scheme and seeking efficiencies in its investment programme.
The government and TfL agree that under this new agreement funding cannot be used to support TfL's day-to-day operations.
While delivering transport services in the capital is ultimately the Mayor's responsibility, the Department for Transport will continue to engage closely with TfL on its wider and future capital plans.
