London needs emergency bailout to keep Tube and bus services running, Sadiq Khan warns

London’s Underground, bus and train services will have to be cut back unless the government provides an emergency bailout by the end of Thursday, mayor Sadiq Khan has warned.

Mr Khan said that Transport for London’s £2.1 billion cash reserve was “running out” as a result of massively reduced income from fares, advertising and the congestion charge on motorists.

And he warned that “today is the last day”, with “quite severe” cutbacks to public transport required if no grant is provided by central government to tide the organisation over.

Speaking on LBC radio, the mayor said: “Over the last two months we’ve lost more than 90 per cent of our fares and advertising is down and so is the congestion charge.

“So we’ve been spending £600 million a month, paying for services and getting nothing back from our customers, or very little. Although we had at the start of this crisis a cash reserve of north of £2.1 billion, that’s running out and we’re required by law to keep two month’s worth of money in reserve to pay for services.”

Mr Khan said he had been involved in weeks of negotiations with government, but added: “It’s really hard getting support from them.

“Being blunt, today is the last day. Unless the government today gives us confirmation of the grant that we need then the consequences could be quite severe and ramifications for all of us will be huge.

“So I’m hoping the government today agrees a grant for TfL to help us with us doing our bit to helping the virus but if they don’t I’m very concerned about the consequences going forward.”

Asked what will happen if no bailout funds are made available, Mr Khan said: “The only way to balance the books is to cut services. So ironically at a time when the government’s wanting us to increase services, ramp up services to get into the recovery phrase, we may be required to cut services because the government is failing to give us the grant support we desperately need.”

He added: We’d have to reduce the buses we provide, reduce the Tube service we provide to save money. That’s how we save money – by reducing the service we provide.

“We provide London Overground, the trams, the Tubes, the buses and to reduce the money we spend, we reduce the service we provide.”

Mr Khan said: “It beggars belief that we have been negotiating for five, six, seven weeks now and the government is still delaying agreeing the grant. There’s no other way that we can pay for public transport, with there being so few passengers using public transport.

“So I’m unclear why the government is waiting until the eleventh hour to reach a deal and if we don’t reach a deal today then it is really bad not just for people who want to use public transport, but the businesses the government claims they’re so desperate to support will suffer hugely if we don’t get this deal today.”

The chief financial officer of Transport for London has a legal duty if the organisation is unable to produce a balanced budget to issue a Section 114 Notice which bars it from committing to any spending beyond statutory obligations.

This would reduce the capital’s public transport network to a bare-bones service. But it is not expected to happen overnight, as the TFL board would meet first to decide next steps.

A Government spokesperson said: “We are in advanced negotiations to agree a funding and financing package which will support Transport for London. Clearly, we will not prejudice those discussions by providing details of those negotiations at this time.

“It is absolutely vital that the priority is reaching an agreement that keeps critical services running for those passengers who must use public transport to get to work, ensuring we keep London moving safely. That means protecting key routes, rapidly increasing the number of services available and protecting the interests of taxpayers in the long-term.”

Source: UK Politics - www.independent.co.uk