Last week, the Government announced a short-term extension to the £200 million bailout provided to TfL in February, with negotiations over a longer-term deal reaching a stalemate.
In a letter sent last week, Transport Secretary Grant Shapps called on the Mayor of London to “reset” the relationship between City Hall and Whitehall and stressed that the Government is “open” to providing a longer-term deal.
Responding to Mr Shapps’ letter on Friday, Sadiq Khan said he agreed that “we must reset our relationship” and urged the Transport Secretary to sit down “so that we can finally agree a fair, sustainable, long-term funding deal that will protect London’s transport network”.
But despite the amicable tone, the Mayor of London went on to say that the Transport Secretary “fundamentally misunderstands the financial challenges facing TfL”.
In his letter last week, Mr Shapps said that cuts – such as the proposed four per cent cut to bus services in London – should be a “last resort” and that TfL should “try to cut costs and generate revenue”.
But in his response, Mr Khan said: “Contrary to your claims, the proposed bus cuts are related to capital funding. Without a longer-term capital funding deal, TfL is having to redirect its funding sources to pay for the new Piccadilly line and DLR trains, which were committed to before the pandemic. The only way TfL would be able to avoid further reductions to bus services is if the government provides sufficient capital funding so that this redirection is not necessary.”
The Mayor of London added that it is “fantasy” to suggest that the £35 million of savings expected to be delivered by the proposed bus cuts could be achieved by increasing priority bus lanes, as proposed by the Transport Secretary.
City Hall now has until July 13 to come to an agreement with the Department for Transport over a new funding deal following last week’s 11th hour extension.