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Transport for London secures £1.8 billion government bailout
1 November 2020, 09:50 | Updated: 1 November 2020, 09:58
Transport for London has secured a last minute government bailout, worth around £1.8 billion, after the coronavirus pandemic significantly impacted its finances.
This is the second bailout TfL have received from the Government, after £1.6 billion was provided in March to support it through the first lockdown period. The initial bailout ran out on Saturday evening.
Longer operating hours and a 30 percent increase in the Congestion Charge, introduced in June as part of the previous bailout, will remain in place under the new deal.
There had been fears the new package would include an expansion of the Congestion Charge and a cut to free travel for the young and over-60s, however London Mayor Sadiq Khan said these proposals had now been scrapped.
Mr Khan said the deal was not perfect, but that he was “pleased that we have succeeded in killing off the very worst Government proposals”.
He continued: "These proposals from the Government would have hammered Londoners by massively expanding the Congestion Charge zone, scrapping free travel for older and younger Londoners and increasing TfL fares by more than RPI+1. I am determined that none of this will now happen.
"This is not a perfect deal, but we fought hard to get to the best possible place.”
NEW: We've now reached a TfL deal with the Government. Here's what it means for Londoners:— Sadiq Khan (@SadiqKhan) November 1, 2020
✅ Free travel for under-18s & over-60s is protected
✅ Congestion Charge Zone will not be extended
✅ TfL fares won’t increase by more than what’s already agreedhttps://t.co/GMKAnSOeKy pic.twitter.com/dRFUZmdVQv
Last month Boris Johnson claimed TfL was "effectively bankrupted" before coronavirus, and proposals to hike charges were "entirely the responsibility" of Mr Khan.
However, commenting on the new bailout, the Mayor countered: "The only reason TfL needs Government support is because almost all our fares income has dried up since March, as Londoners have done the right thing."
The capital's transport body said the agreement will enable it to continue operating services until the end of March 2021, with longer-term funding discussions ongoing.
The bailout will include a "core amount of £1 billion", consisting of a £905 million grant and £95 million of borrowing.
The exact amount of money involved is subject to passenger revenue in the coming months.
I can announce that the Govt has agreed up to £1.7bn for #TfL to make up lost fare revenue from #COVID19.— Rt Hon Grant Shapps MP (@grantshapps) November 1, 2020
This six month funding deal will ensure tubes & buses are available for Londoners to make essential journeys. pic.twitter.com/gg7Ah46Jup
Responding to the Transport for London bailout, Transport Secretary Grant Shapps said: "This deal is proof of our commitment to supporting London and the transport network on which it depends.
"Just as we've done for the national rail operators, we'll make up the fare income which TfL is losing due to Covid.
Mr Shapps added: "Over the coming months, as we look to move beyond the pandemic, I look forward to working with London's representatives to achieve a long-term settlement, with London given more control over key taxes so it can pay more costs of the transport network itself.
Andy Byford, London’s Transport Commissioner, said: “Reaching this agreement with the government allows us to help London through this next phase of the pandemic.
“As always, our staff are working tirelessly to serve London’s people and businesses; supporting the city’s economy and providing an excellent, safe and reliable service to our customers every day.”