Ministers and Transport for London (TfL) have reached an agreement for a substantial £250 million government funding injection in 2024 to enhance London’s transportation infrastructure.
The investment, part of TfL’s ongoing program, includes the procurement of new Piccadilly line trains, creating approximately 700 skilled rail manufacturing jobs in Yorkshire and generating up to 2,000 additional jobs in national supply chains. This funding marks the latest commitment from the government, bringing the total support for TfL to over £6.6 billion since 2020.
Rail Minister Huw Merriman said: “We’re investing in transport across the country, and today’s agreement will have a tangible, positive impact not just for people travelling in and around the capital but also the millions who visit every year.
“It is fair for Londoners and taxpayers, underpinning projects that will support hundreds of skilled manufacturing jobs in our vital rail sector.
“We have invested billions into the capital’s transport system in recent years. This investment must be well managed in a way that doesn’t unfairly burden the pockets of taxpayers and motorists.”
Andy Lord, London’s Transport Commissioner, said: “Through a huge effort to reduce costs and rebuild our ridership and revenue following the pandemic, TfL is now on track to be financially sustainable in terms of its day-to-day operations. We are also able to cover the cost of the majority of our capital investment.
“We, alongside London’s business stakeholders and others, have consistently made the case that additional Government support for capital investment in transport is needed if we are to be able to continue to deliver vital improvements to London’s transport network, unlock new homes and support growth across London and the UK.
“It is good news that we have now reached an agreement with the Government on the capital support that they will provide over the next year, and we are grateful for the support. However, we will now need to reassess our recent draft business plan and address the impact of the continuing shortfall in funding. That work is underway so that we can confirm as soon as possible what we will deliver for London.”
Transport for London (TfL) now benefits from an annual sum of approximately £2 billion in retained business rates, a measure introduced in the 2021 Spending Review. This includes over £1 billion specifically allocated for enhanced retention to support TfL’s capital investment, in addition to its fares and other income sources.
The government’s funding aims to assist TfL in modernising, improving operational efficiency, and achieving a stable financial position. The latest agreement acknowledges TfL’s progress in these areas, projecting financial sustainability by the end of the fiscal year. As part of the deal, TfL will unveil its plan in July to bolster and maintain its finances, alongside ongoing efforts to reform its pension scheme and identify efficiencies in its investment program.
The agreement specifies that the funding cannot be utilised for TfL’s day-to-day operations. While the Mayor holds ultimate responsibility for delivering transport services in the capital, the Department for Transport will maintain close engagement with TfL regarding its broader and future capital plans.