Following my statement to the House on 13 July (2022), I am writing to inform the House that we have today agreed a new longer term funding settlement between Transport for London (TfL) and the Government. The last extraordinary funding settlement expired on August 3 and I have agreed with the Mayor of London on a new settlement until March 31, 2024 or until Transport for London achieves financial sustainability, whichever comes first .
This longer-term settlement includes more than £1.1 billion (billion) additional grants until March 2024 for London transport, which will unlock nearly £3.6bn of investment in critical infrastructure, with a number of projects set to revolutionize travel in the capital.
As a result of our longer-term settlement, there will be major improvements for Londoners, including new trains on the Piccadilly line and upgrades to the District, Metropolitan, Hammersmith and City and Circle lines, which will maintain world-class status of the London Underground. Other benefits include: support for the long-awaited repair of the Hammersmith Bridge; a vital upgrade to Elephant and Castle station and an extension to London Overground between Gospel Oak and Barking Riverside to serve over 10,000 new homes in east London.
As part of the settlement, the mayor will have to continue work on introducing driverless trains to the London Underground, which have been used on the Dockland Light Railway for more than 35 years. At a time when strikes are paralyzing both the metro and national rail networks, never has this work been more important.
Alongside all this, the government is committed to mitigating TfL’s loss of passenger revenue due to continued demand uncertainty following changes in travel patterns since the COVID-19 pandemic. None of this would have been possible without government funding.
The letter of settlement requires Transport for London to modernize and control its operating costs, to make it a modern, effective, efficient and financially stable operator. This is a fair and proportionate settlement in London while taking into account the funding provided elsewhere in the country and the cost to the national taxpayer, at a time of great pressure on national finances.
It comes on top of the financial support of over £5bn the government has already provided to TfL since the start of the pandemic and the government’s commitment of over £1bn a year until 2025 for transport in London thanks to the maintenance of professional rates.
Through it all, the Government continues to work with the Mayor and TfL to ensure London’s transport system meets public and business needs and contributes to the country’s economy.