2020-05-10 08:06:27 UTC
Big upgrades to the London transport system could be delayed or ditched in
return for a £2bn bailout to keep the Tube and buses running.
Transport for London (TfL) is locked in increasingly desperate talks with
the government over a cash lifeline for the capital’s network after the
Covid-19 lockdown wiped out revenues.
TfL is down to its last £1bn, which is being burnt at a rate of £21m a day
— leaving it less than two months from emptying its coffers and
illustrating the intense pressure on local authority finances.
The capital’s network, which reports to Labour mayor Sadiq Khan, has been
crippled by the pandemic. The Tube normally carries up to five million
passengers a day, but has lost 95% of them. Bus use is down 85%.
A bailout for TfL is likely to come with strict conditions, clipping its
wings on ambitious projects such as a multibillionpound extension to the
Bakerloo line. Khan, 49, has already been forced to ditch his controversial
However, the Treasury and Department for Transport (DfT) have little choice
but to continue to pump in funds because of the risk of the capital
grinding to a complete halt. TfL has debts of about £12bn and spends more
than £400m a year on interest charges. Its debt rating was downgraded by
ratings agency Fitch last month.
TfL will remain under intense financial pressure even when the lockdown is
eased. It faces a revenue gap of £5bn to £7bn over 18 months. If social
distancing of two metres remains in place, Tube trains would be able to
carry only about 15% of their normal capacity, meaning a Victoria line
carriage could carry just 21 people rather than 125. Instead of 325,000
people boarding the Tube every 15 minutes, 50,000 would be allowed.
TfL was already in financial trouble before the pandemic as delays and
overspends on the new Crossrail line and falling bus use blew a hole in its
budget. It has been weaned off a government grant in recent years, erasing
about £800m of funds and leaving it largely reliant on commercial income
Sources said the prospect of heightened Westminster scrutiny in return for
a bailout had caused tension between City Hall and the government. Khan was
controversially refused admittance to the government’s emergency Cobra
committee in the weeks before the lockdown.
TfL declined to comment on specific details, but said that it was facing a
“substantial reduction in income over a period of months”.