TfL says as a result of coronavirus lockdown measures, there has been a 95% reduction in journeys on London Underground, and an 85% drop in bus travel. “This has caused an overall operating income loss of around 90% including non-passenger incomes, such as advertising revenue,” TfL says. “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.”
Despite actions to cut costs, TfL says the drop in revenue is so severe that it will not be able to fully mitigate the loss without external support, and TfL has a legal duty to maintain a balanced budget. TfL estimates a funding gap of up to £1.9bn in the first half of 2020-21 and in excess of £3bn for the full year.
The TfL funding package assumes a funding shortfall of £1.6bn for the period April 1- October 17 and comprises an extraordinary support grant of £1.1bn and incremental borrowing by TfL from the Public Works Loan Board of £505m. If the actual funding shortfall is greater or less than £1.6bn, then the amount of grant and loan will increase or decrease proportionately, up to a maximum of £1.9bn.
Future measures are envisaged by TfL, the Greater London Authority and the DfT to enable TfL to maintain essential services and achieve a revised balanced budget for the rest of the financial year.
There will be no change to the funding package agreed in December 2018 to complete the delayed and over-budget Crossrail project. TfL and DfT say they will “make all reasonable efforts to complete the project as soon as practicable and will continue to work on identifying the additional funding that will be needed for completion.”
“I welcome this support from government which will help us continue to get London moving and working again, safely and sustainably,” says London’s transport commissioner, Mr Mike Brown. “We have been operating up to 70% of peak Tube services and over 80% of bus services with many of our staff ill, shielding or in self-isolation. From next week we will further increase services beyond this as we progressively build towards restoring services to pre-Covid levels.
“We are asking everyone to try and avoid the busiest times to support social distancing wherever possible, to wear non-medical face coverings when they do need to use public transport, and to walk and cycle whenever possible. We are providing extensive new cycling and walking facilities to support journeys by these means.
“Enormous challenges remain, including agreeing longer term sustainable funding for transport in the capital. In the meantime, we will continue to do everything in our power to help deliver a successful recovery for our great city.”