Transport for London (TfL) has secured a £3.6bn government bailout that will help secure the long-term future of London’s transport network.

The settlement will help secure the long-term future of London’s transport network

The settlement, which follows four previous emergency deals after its revenues were hit in the pandemic lockdowns, includes just under £1.2bn of upfront funding and brings the Government’s total funding to over £6bn. This matches the Mayor’s own pre-pandemic spending plans. It also guarantees passenger revenue until March 2024.

The Department for Transport (DfT) said the funding deal would ensure the network is not only protected against potential lost revenue caused by uncertainty of post-pandemic demand but will also enable the delivery of a number of projects set to revolutionise travel across London.

This will include brand-new Piccadilly line trains, as well as modernisations and upgrades across the District, Metropolitan, Hammersmith and City and Circle lines. Greenlit projects include the long-awaited repair of Hammersmith Bridge, the extension of the Northern Line and vital improvements to Elephant and Castle station.

The deal will also secure £80m every year for active travel schemes, restoring the Healthy Streets programme and expanding walking and cycling infrastructure, and will establish an independent property company that will start on 20,000 homes on TfL’s land within 10 years.

The settlement also includes a commitment from the Mayor to continue work on the introduction of driverless trains on London Underground – which Transport Secretary Grant Shapps said was key to London maintaining its position as Europe’s greatest transport network.

Shapps added: “This deal more than delivers for Londoners and even matches the Mayor’s own pre-pandemic spending plans but for this to work, the Mayor must follow through on his promises to get TfL back on a steady financial footing, stop relying on government bailouts and take responsibility for his actions. Now is the time to put politics to one side and get on with the job – Londoners depend on it.”

Transport for London said the “hard-won” deal means it can now get on with the job of supporting London’s recovery from the pandemic.

TfL Commissioner Andy Byford said: “There is no UK recovery without a London recovery, and no London recovery without a properly funded transport network.

He added: “We will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network. We are grateful for the support of both the Mayor and the Government as we now set out to continue serving the Capital and investing in safe and reliable services for the millions of people who need them.”

But TSSA – the biggest union for Transport for London staff – has reacted with “concern and anger” to the funding deal, which it says forces TfL to make hundreds of millions of pounds of new cuts over the next 19 months. It says the terms of the deal include an attack on staff pensions and real-term pay cuts for staff, many of whom have seen the value of their salaries cut by 20% over the last seven years.  The union has said any changes to pensions would lead to “industrial unrest”.

It also warns that funding for capital projects is extremely limited, over 600 customer service roles are under threat and cuts to bus services seem inevitable as a result of the funding settlement. There are also concerns about fares increases at ‘unprecedented levels’ hitting passengers during a cost-of-living crisis and in turn impacting travel habits and emissions despite the desperate need to tackle the climate crisis.

Manuel Cortes, TSSA general secretary, said: “Our members at TfL are understandably concerned and angry at this funding settlement. They’ve been treated with disdain by this Conservative government despite their heroic efforts in keeping London’s transport moving and years of pay restraint. Any attacks on their pensions will lead to industrial unrest.

“Let’s be clear, TfL’s precarious financial situation is a direct result of a dodgy deal made by Boris Johnson when he was Mayor of London which cut Government funding to TfL by £700m per year. This leaves London as the only major city in the world that does not receive public funding to cover running costs. Covid exacerbated this situation.

“Ultimately, London and Londoners are being punished for voting Labour and it will be they who pay the price, with cuts to services and investment, and higher fares. Already they have been warned of ‘unprecedented’ increases next year, which will impact most upon the poorest in the capital.”