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Transport for London given over £1bn in third government bailout
1 June 2021, 10:05 | Updated: 1 June 2021, 10:11
The Government has agreed to extend its bailout of Transport for London until December 11 in a deal worth over £1bn.
The Department for Transport said the latest agreement is worth "around £1.08 billion" and Transport Secretary Grant Shapps posted online: "I've agreed with TFL a third emergency funding deal of over £1bn to support London and its transport network - helping to ensure it's a modern, efficient and sustainable network for the future."
It is the third funding and financing package from central Government to TfL to keep London's transport network running after passenger numbers plummeted during the Covid-19 pandemic.
Two previous emergency support packages agreed in April and October last year mean the government has spent over £4 billion supporting London's transport network since March 2020.
London Mayor Sadiq Khan said: "After extremely tough negotiations, although we've successfully seen off the worst of the conditions Government wanted to impose on London: this is not the deal we wanted.
"This short-term deal has many strings attached - but means we can continue to run vital transport services."
London’s Transport Commissioner Andy Byford said: “The pandemic – during which our staff have worked so magnificently to keep London moving – has shown our financial model, with such a disproportionate reliance on fare revenue, to be not fit for purpose.
“We are working hard to rebuild revenue through attracting people back to our services with nearly 60 per cent of pre-pandemic ridership already travelling again.
"Today’s funding agreement with the Government provides £1.08bn in base funding and further support should our passenger revenue income be lower than forecast until 11 December 2021 to enable us to continue to run near full levels of service to stimulate London’s recovery and deliver a host of improvements like the Elizabeth line, Northern line extension and expansion of London Overground.
"It is vital that we also use this period to agree a longer-term settlement so that we can plan effectively for London’s future and deliver maximum value for money through our contracts and supply chain.
“The conditions placed on us by the Government agreement and the amount of funding we will receive means we need to find a further £900m of savings or new income this year compared to our approved Budget and on top of the £730m of savings already assumed in our Business Plan.
"We will work through this while protecting front line services to deliver what London needs and to play our full part in recovery, decarbonisation, improving air quality and promoting active travel."