Talks over a funding settlement for Transport for London will continue until Friday after the government extended emergency finances to allow time for discussion of a new deal.
The latest short-term extension comes as ministers and the mayor of London remain at loggerheads over financing the capital’s transport system after the drop in tube journeys hammered revenues.
The transport secretary, Grant Shapps, told the Commons that the government had supported TfL with more than £4.5bn in extraordinary funding settlements and had now offered a fourth agreement, which the mayor, Sadiq Khan, had until Friday to consider.
In a written statement, Shapps said: “We have recognised that demand and, therefore, passenger revenue has been volatile, and have responded accordingly, compensating TfL for that revenue loss to ensure services can be maintained.
“The government is committed to supporting London and the transport network on which it depends, balancing that with supporting the national transport network.”
However, TfL and Khan have been seeking a long-term settlement, which they say is needed to avert decline and keep investment in transport infrastructure, with passenger numbers on the tube still only about 60% of pre-pandemic levels on weekdays.
Khan, who has proposed to extend road charges to make up the shortfall, said: “The pandemic is the only reason TfL is facing a financial crisis. I urge the government to engage with TfL and City Hall in good faith so that we can finally agree a fair, long-term funding deal that will protect London’s transport network – for the sake of the capital and the whole country.
“London’s economy plays a huge role in the national economy, and around 43,000 jobs outside London depend on TfL’s investment.”
A TfL spokesperson said talks would continue, adding: “It is essential London receives the sustained long-term government funding that is vital for the coming years if a period of ‘managed decline’ of London’s transport network is to be avoided.”
Government sources have indicated they wish Khan to further raise fares and abolish some concessionary tickets for older passengers and children.
TfL is looking for guaranteed capital grants for the next three years but has said it will aim for day-to-day sustainability by April 2023.
London’s annual £700m operating grant was abolished under an agreement by the previous mayor, Boris Johnson, and the Conservative government.
The TSSA union accused the government of “playing politics” and treating London with contempt.
