London transport bosses have been given until lunchtime on Wednesday to accept or reject a multi-billion-pound bailout or face the capital’s transport network falling into “managed decline”.
However, TfL sources said there was still a lot be discussed before an agreement was met with the Department for Transport as they continued to thrash out the details ahead of the deadline.
A spokesman added that leaders at City Hall were “in active discussion with the Government” over multiple clauses in the draft proposal.
The deal is understood to include £3.6 billion for capital spending up to March 2024 and assurances that the Government will cover the difference between TfL’s revenue and costs, meaning that if fare income continues to be lower than pre-pandemic levels, the shortfall will be made up by taxpayers.
The proposal covers only 20 months of funding, far less that the three years sought by the transport body.
Ministers are believed to have put in a caveat stating that services must be maintained at broadly the same levels they are at now.
Mayor Sadiq Khan has warned that there could be a million fewer journeys a day by public transport in the capital due to the cuts – including an 18 per cent proposed reduction in the bus network – after passenger numbers failed to fully bounce back after Covid.
The network was also blighted by strikes in June and July with further industrial action set to grind public transport in the capital to a halt later this month.
The cash on offer is on top of the £5 billion already handed out to TfL to keep services running during the pandemic, Government sources said.
City Hall on Tuesday said that TfL’s priority was protecting services and that the government had insisted on effective service reductions as a condition of previous funding agreements.
TfL relies predominantly on fare revenue to maintain the running of trains and buses.
It requires capital funding for extra projects, such as replacing dilapidated Bakerloo line Tubes.
The Mayor’s office has said that insufficient grants mean TfL cannot balance its budget without severe cuts and this will lead to “managed decline”.
City Hall has been keeping Tubes and buses going under a day-to-day funding deal from central government.
It has been granted three short-term extensions since the original £200 million plan was agreed in February.
Mr Khan said: “TfL must consider if this draft proposal provides the funding needed in order to avoid having to make very painful cuts, and it’s in no one’s interest to have conditions attached to this funding deal that come at a cost — damaging TfL, unfairly punishing Londoners and our economic recovery.”
The Mayor’s spokesman added it was “not going to comment on leaks” about funding proposals because they are market sensitive.
Transport commissioner Andy Byford added that TfL was “determined to avoid” entering a scenario of managed decline, but “not at any cost”.
He said: “We would need an additional £927 million to tide us over, and we’re considering whether the proposal from Government meets that need and, if not, the very difficult choices we would have to make.”
Transport Secretary Grant Shapps has previously said: “This is our final offer which more than delivers for London while being fair to UK taxpayers.”