London news: TfL set for £1bn bailout as Boris Johnson rescues London Mayor AGAIN | UK | News
London was thrown into crisis earlier this year amid the coronavirus pandemic.
And according to Sky News, the government has offered Transport for London a new £1billion bailout.
The Government is understood to be demanding the extension of London’s congestion charge zone and further fare hikes as part of a £1billion proposal.
Ministers have warned TfL it must introduce the reforms if it is to secure the huge bailout package ahead of a funding deadline over the coming days.
These conditions are reported to include broader fare increases and the removal of remaining free travel entitlements for children and pensioners.
A source close to the Department for Transport has revealed TfL has been offered additional funding of around £1billion – but that is only equal to two months- running costs of London’s huge transport network.
The insider claimed TfL is in fact holding out for a new rescue package that would be worth double that sum.
London Mayor Mr Khan has continued to warn of the funding problems faced by TfL, and said the body would run out of money by Saturday without a new deal in place.
He is seeking a huge package worth £5.7billion that would secure the transport network’s future for the next 18 months.
An emergency meeting of TfL’s finance committee is due to be held imminently.
But a person close to the Mayor’s office told Sky News: “Conditions such as extending a £15 congestion charge to the North and South Circular and taking free travel away from children and older people would be totally unacceptable to the mayor and he would not ask Londoners to accept them in these exceptionally difficult times.”
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“Discussions are underway, and it would be inappropriate to disclose further details at this stage.”
The dire financial situation leaves TfL hypothetically just days away from being forced to file a Section 114 notice – which would effectively declare the transport body insolvent.
In May, TfL secured a last-minute £1.6billion bailout, which gave the government the right to nominate two board representatives, with a path cleared for a more detailed review of the body’s finances being conducted.
The Government’s special board representatives were Andrew Gilligan, who worked with the Prime Minister during his tenure as Mayor of London, and Claire Moriarty, a former DfT civil servant.
Accountancy firm KPMG were also appointed by the DfT to begin the review of TfL’s business plan and funding requirements.
TfL, which is expected to lose around £4billion this year, has made several bids to save money, including putting 7,000 of its staff across the network on furlough at the height of the coronavirus pandemic, and suspending hundreds of construction projects.
Earlier this week, dozens of business leaders wrote to Chancellor Rishi Sunak asking for a rapid resolution to TfL’s funding problems,
The leaders, which included the chief executives of British Land and the New West End Company wrote: “Beyond the immediate need, TfL needs to have a more diverse and robust funding arrangement over at least a 5-year period, which make it less reliant on uncertain fare income.
“We hope that the agreement you reach with TfL this autumn will reflect this.”