Transport for London granted £1bn after 90% income loss in lockdown

Transport for London (TfL) reported today that it has been granted more than £1bn to help keep essential services running.

The organisation, which manages London buses and the London Underground, has seen a 90 per cent loss of income since the beginning of the lockdown, with a 95 per cent reduction in Underground journeys and an 85% reduction in bus journeys.

It announced today that it expects a funding gap of up to £1.9bn in the first half of 2020 and more than £3bn over the full year.

To combat this, it has secured a £1.095bn grant from the Department for Transport, as well as incremental borrowing from the Public Works Loan Board of £505m.

In the statement today, TfL said: “It is expected that the recovery will take some time and that passenger income will continue to be severely impaired after the strict response measures are gradually eased.

“Whilst TfL has taken actions to reduce its costs during this period, through measures such as implementing the government’s Coronavirus Job Retention Scheme and a safe stop of non-essential construction projects, the severity of the impact is such that it will not be able to fully mitigate the loss without external support.

“TfL announces that, after a period of discussions, an extraordinary funding and financing support package has been agreed between TfL and the Department for Transport to contribute towards TfL’s forecast funding shortfall.

“The funding package is based on the assumption that the funding shortfall will be £1.6bn for the period 1 April 2020 to 17 October 2020.

“In recognition that the current circumstances are likely to present ongoing financial challenges, a combination of future measures from TfL, Greater London Authority and the government will be implemented to enable TfL to maintain essential services and deliver a revised balanced budget over the remainder of the financial year.

“During the period in which the funding package is being provided to TfL, appropriate governance and oversight arrangements will be put in place, allowing the parties to work closely together.”