TfL’s financial blackhole hits £3.5bn as commuters stay home
Transport for London (TfL) this morning said it would need £3.5bn in funding over the full year due to uncertainty over commuter demand due to the coronavirus.
The figure is £300m higher than that laid out in the transport operator’s emergency coronavirus budget in May.
It also said that it would require an additional £2.9bn in the next financial year in order to “stabilise” its financial position.
In a statement, TfL warned it had faced “very difficult choices” over which of its development projects could be “funded and completed” given the new budget.
It warned that some projects would require “further certainty over Government support before they could be progressed”.
Among the projects mentioned were the Crossrail 2 rail link, the Bakerloo Line extension, and the DLR extension to Thamesmead, which have a combined cost of £28.8bn.
“Without the revised funding model that London needs, which would give long-term certainty of sustainable funding, some projects will be unable to progress”, it said.
TfL is currently in the process of negotiating a new funding deal from the government, with the current bailout package set to cover costs until 17 October.
Of the £1.6bn rescue package provided by ministers in May, TfL said it expected to spend £1.5bn.
For the second half of the financial year, it said it would need £2bn more, taking the overrall figure to £3.5bn.
As a result of the pandemic and uncertainty over social distancing, TfL said passenger revenue, which accounts for 70 per cent of its funding, could vary between £500m and minus £235m.
At the peak of the virus, TfL’s passenger income fell 90 per cent compared to the previous year, paving the way for the bailout.
Under the revised budget, TfL will put £1.4bn into infrastructure projects such as the Northern Line and Barking Riverside extensions.
However, due to the economic fallout from the pandemic, a number of schemes will be paused, including the Rotherhithe to Canary Wharf ferry and the transformation of Croydon Fiveways junction.
The revised draft budget will be considered at the TfL Board meeting on 29 July.