TfL funding: Business leaders urge help for London's transport

Further financial support is needed for London's transport to avoid a "cycle of decline that plagued the capital" last century, business leaders have warned.

In a letter to the chancellor, 80 companies, groups and organisations are calling for a fair settlement to be made with Transport for London (TfL).

TfL has secured more than £4bn of government funding in three bailouts since the start of the pandemic to keep Tube and bus services running.

The current deal ends on 11 December.

Under the terms of the current bailout, fare prices will increase by RPI+1% from next January, in line with TfL's business plans.

At the start of the pandemic, TfL's fare revenues fell by 90%. There has been a similar drop in advertising revenues, as companies cancelled contracts to advertise on the London Underground network.

A £1.6bn bailout was agreed in May 2020, followed by a £1.8bn deal in November, which was extended until the end of May. A third deal in June provided a further £1.08bn.

There were nearly 200m bus and Tube journeys during the four weeks to mid-October 2021 compared with 271m journeys taken in the same period at the end of February 2020.

By Tom Edwards, BBC London transport correspondent

This is a diverse group of public and private organisations, from hotel companies to cycling groups.

Their message is London will have to play a big part in any UK-wide recovery and, without a good transport system, business will move elsewhere.

TfL needs £500m from government to keep services running this year - much more for longer-term investment - as passengers haven't returned in usual numbers and it relies on those fares.

If TfL doesn't get the funding, the mayor says services - even a whole Tube line - could have to close.

But if the previous deals are anything to go by, the government will attach conditions in exchange for funding.

The letter to Chancellor Rishi Sunak states: "As leaders of a diverse range of businesses and organisations, we are writing to express our serious concern about the future of London's transport.

"The decisions taken regarding TfL's funding in the coming days will have profound and long-term impacts for the UK's economy, the achievability of the capital's environmental targets, and the lives of individuals across the wider South East - particularly those who are most disadvantaged and whose communities are amongst those most in need of levelling up.

"London's economic success - and the substantial and tangible benefits it delivers for the wider UK - cannot be taken for granted."

The letter echoes previous warnings from mayor of London Sadiq Khan and TfL that a funding shortfall could force a "managed decline" of services.

A government spokesperson said: "We have repeatedly shown our commitment to supporting London's transport network through the pandemic, providing more than £4bn in emergency funding to Transport for London.

"We will continue to discuss any further funding requirements with TfL and the mayor, and any support provided will focus on getting TfL back on to a sustainable financial footing in a way that is fair to taxpayers across the country."