Yahoo Finance Sadiq Khan fears defeat in crisis talks to stop the Tube going bankrupt
Sadiq Khan is locked in last-ditch talks to prevent London’s transport network going bankrupt, with government officials digging in their heels over a multi-billion pound bailout.
The London mayor’s hopes of securing taxpayer cash are fading despite the opening of formal discussions, according to City Hall insiders.
Transport for London (TfL), chaired by Mr Khan, has until Dec 11 to agree a new funding deal with the Government.
Failure to reach an agreement will leave the authority in default, which could lead to the Government taking control of the body.
TfL confirmed that discussions had begun at an official level on Wednesday.
However, it is understood that negotiations will be limited to the mechanism by which any money from the Government is delivered, rather than the size of the bailout.
Mr Khan and Boris Johnson have repeatedly clashed since the start of the pandemic as TfL struggled to stay afloat.
The Prime Minister has blamed his successor as mayor for the parlous state of the authority’s finances.
Mr Khan, meanwhile, has said that TfL has suffered from legacy debts and being more exposed to a decline in passenger demand than large cities abroad.
However, the London mayor has toned down his criticism since the summer in the hope that he can convince Mr Johnson’s administration to agree to a long-term funding deal.
Mr Khan wants £1.7bn of state aid to keep TfL afloat until March 2023, with billions of pounds set aside for capital expenditure so that trains and stations do not fall into a state of disrepair.
City Hall officials had hoped that a more conciliatory approach would lead to funding being included in Rishi Sunak’s spending review in October. The Chancellor failed to mention the issue, however.
On Tuesday Mr Khan warned that bus services would need to be cut by a fifth and Tube services by a tenth “if the Government continues to starve TfL of funding”.
“A failure to provide enough operational and capital funding for TfL means that it won’t be long before London itself will no longer have ‘London-style’ transport services,” he said.
“Instead, we’ll be forced to move into managed decline – leading to run-down services reminiscent of the 1970s and 80s.”
The government has been contacted for comment.
