Yahoo Finance Coronavirus: Mayor warns London running out of cash for Tube and bus services
London’s mayor is warning Transport for London (TfL) can only afford to keep current services running until the end of the month, with the coronavirus hammering its income from fares.
Sadiq Khan is calling for an urgent injection of UK central government cash for the capital’s transport body, warning staff may not be paid and services could be slashed without new funds.
TfL has been “eating into” reserves to maintain day-to-day operations, Khan told BBC Radio London on Tuesday night. He said he was in talks with central government about an emergency grant, and said they “get the point.”
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Khan said TfL needed support like any other business, with Tube passenger numbers down 95% and bus passenger numbers down 85%.
Khan was asked how long TfL could “go on for,” and replied: “Probably until the end of this month.”
“What we can’t afford to do is have to make the decision to cut more services because we can’t pay people,” he added.
The city’s transport network has seen passenger numbers collapse in recent weeks under the coronavirus lockdown, hitting its income.
It has reduced Tube services but has come under fire for doing so, with critics warning it is worsening over-crowding and putting those who have to work at risk of the coronavirus. But transport services have been hit hard by absences among sick and self-isolating staff, and Khan says services cannot be increased.
The @MayorofLondon @SadiqKhan has told @BBCRadioLondon @EddieNestorMBE that @TfL will run out of money by the end of this month to pay staff and it may have to cut services, unless the government steps in. This is because of fall in fares income with fewer passengers #COVIDー19 pic.twitter.com/pfbuHNdeT1
— BBC Radio London (@BBCRadioLondon) April 21, 2020
As mayor Khan is chair of TfL, which oversees public transport in the capital including the Underground network, buses, the Docklands Light Railway (DLR) and London Overground services. It also licences taxis and runs free Dial-a-Ride services for disabled people.
A spokesperson for the mayor on Wednesday 22 April appeared to play down the idea the capital’s transport body would actually soon run out of cash. He said the mayor had been referring to TfL breaching prudent cash reserve levels by the end of the month.
But the spokesperson told Yahoo Finance UK that would still leave TfL with £1.2bn ($1.5bn) in reserves. “This is sufficient for TfL to keep operating the city’s core transport and paying its staff while it is in constructive discussions with the government on its financial future.”
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Other transport services facing similar revenue problems have already received government support.
A new ‘bus services support grant’ will see private bus operators including Stagecoach and FirstGroup receive £167m in new funding. Demand for buses is reported to be down around 90%, but the deal requires firms to maintain up to 50% of normal services.
Meanwhile the government has offered to effectively nationalise losses on Britain’s railways, giving firms the chance to transfer all revenue and cost risks to the taxpayer. Franchise holders will be paid a fee to run services.
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