Transport for London (TfL) has been living on its cash reserves since its last government funding deal ran out earlier this month – and could be forced to cut services to the bone, agency bosses have warned.
TfL wants £900 million from the government for operational costs, like running Tube and bus services, to last until the end of the financial year next April, when it says it will be on a sustainable footing after finances were hit hard by the pandemic.
That is aside from the further billions it wants to invest in keeping up and improving the network itself – like building the Bakerloo Line Extension, for example.
But TfL is still locked in negotiations with the government, which most recently offered a deal lasting twenty months instead of nine months, which the transport agency said had lots of strings attached.
In the meantime, TfL has been getting revenue top-ups from the government since late June, but the last of these ran out on August 3, as negotiations continued.
Passenger numbers on some Southwark bus routes facing axe are above pre-pandemic levels
And in board papers published yesterday (Tuesday, August 9), the agency described section 114, a possible next step if negotiations with the government break down.
Patrick Doig, interim chief financial officer at TfL, said: “Careful consideration would need to be given to what services TfL is able to continue to run within available funds, taking into account our general financial obligations and our core statutory duty to provide safe and efficient public passenger transport services”.
Mr Doig said the section 114 notice was not being issued already because negotiations with the government were still going on.
The government has provided around £5.4 billion of support for TfL since the pandemic started, which the agency said it was grateful for. But this does not make up the shortfall TfL said has been caused by the pandemic. TfL expects to have lost £8.9 billion in projected revenue between April 2020 and March 2024.