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Congestion Charge expansion scrapped in TfL bailout

Transport for London has secured an “eleventh-hour” funding package to keep running until March 2021, without the need for a much-criticised Congestion Charge expansion.

Although the c.£1.8bn funding requires the current temporary changes to the Congestion Charge to be maintained as a “continuing response”, ministers back-tracked on calls for the zone to be extended to the North and South Circular.

The conditions of the latest bailout also ensure that free travel for the under-18s and over-60s is protected and avert higher increases in TfL fares. The Government had wanted TfL fares to rise by more than the previously agreed RPI+1 per cent.

Commenting on the deal, Mayor of London Sadiq Khan said TfL had “succeeded in killing off the very worst Government proposals”.

Speaking last month, Khan urged the Government to reconsider its “ill-advised and draconian” proposal on Congestion Charge expansion and warned its plan would “punish Londoners for doing the right thing to tackle Covid-19” by having found alternatives to public transport during the pandemic.

The Congestion Charge had already gone up to £15 in June, while the hours of operation were increased and the residents’ discount was later closed to new applicants.

The funding, which comes on the back of a two-week emergency bailout, will allow the capital’s transport body to continue operating for the remainder of the financial year – without a bailout, it would have been forced to issue a Section 114 order, the equivalent of bankruptcy for a public company. However, measures on longer-term “sustainable” funding are still needed.

Andy Byford, London’s Transport Commissioner, said: “Reaching this agreement with the Government allows us to help London through this next phase of the pandemic. We will continue to work with the Mayor and the Government on our longer-term funding needs. As always, our staff are working tirelessly to serve London’s people and businesses; supporting the city’s economy and providing an excellent, safe and reliable service to our customers every day.”

Sadiq Khan said the deal was “not ideal” but added: “We fought hard against this Government which is so determined to punish our city for doing the right thing to tackle Covid-19. The only reason TfL needs government support is because its fares income has almost dried up since March.”

The actual funding package for TfL is expected to provide approximately £1.8bn of funding based on the amount of passenger revenue assumed in TfL’s revised budget, but this could increase if actual revenues are lower than that. TfL will need to contribute around £160m through cost savings.

Written by Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

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