TfL: More funding for Tube or let Sadiq Khan raise taxes for upgrades, government told

TfL is facing an estimated funding gap of £20 billion, according to a new report, putting upgrades at risk, including on the Bakerloo and Piccadilly lines.
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Ministers must guarantee longer-term funding or let the mayor of London raise taxes to enable vital upgrades to London’s ageing Tube trains and outdated signalling systems, government advisors have warned.

In a new report, the National Infrastructure Commission (NIC) said longer-term government funding settlements of five years are needed to give Transport for London (TfL) the certainty it needs to improve its network.

The NIC said TfL is facing an estimated funding gap of £20 billion over the next 20 years.

The Commission said: “Passenger numbers on public transport in London have not yet recovered to pre-pandemic levels – monthly journeys on London buses and the London Underground in 2023 have been on average around 84% and 82% cent of 2019 levels respectively.

“Given the corresponding reduction in revenue, TfL has received a number of emergency, short term funding deals from [the] government…The latest deal [agreed in August 2022] runs to March 2024. A new longer term model for capital investment should be agreed at this point, as is the case for other major cities, to enable the continued enhancement and expansion of London’s public transport network, which will unlock growth opportunities and additional housing.”

The report referred specifically to required improvements to TfL’s stock of trains and its signalling infrastructure.

Mayor Sadiq Khan has previously said there is “a strong business case” for the replacement of the Bakerloo line’s trains, which – dating from 1972 – are the oldest on the network. In answer to a written question on the topic last month, he wrote: “New trains will enable TfL to continue to maintain a reliable service, avoid the increasing cost of maintaining obsolete trains and increase passenger demand.”

But the mayor said that providing a new fleet of trains on the line requires “long-term funding certainty”.

A Bakerloo Line carriage at Stonebridge Park Depot in 2021. (Photo by Leon Neal/Getty Images)A Bakerloo Line carriage at Stonebridge Park Depot in 2021. (Photo by Leon Neal/Getty Images)
A Bakerloo Line carriage at Stonebridge Park Depot in 2021. (Photo by Leon Neal/Getty Images)

He has similarly said that certainty is needed in order to upgrade the Piccadilly line’s signalling system – aspects of which date from the 1950s, and which is holding back the potential frequency of trains along its route.

In its official recommendation to the government, the NIC said ministers “should replace short term funding deals for TfL with five year funding settlements, sufficient to enable both the renewal and enhancement of London transport”.

They added that the government “should work with the mayor of London to establish the priorities for public transport enhancements over the next 10-20 years and reach agreement on the appropriate combination of grant support, retained business rates and local mechanisms that can be used to finance and fund them”.

If the government is unable to provide enough money in the form of grants, the commission suggested that new powers could be devolved to City Hall, to enable London to raise more of its own money through taxes.

Approached for a response to the NIC’s recommendations, a spokesman at the Department for Transport said: “It is for the mayor to ensure TfL can deliver transport services in the capital.

“To support this, we have provided more than £6bn since 2020, on top of TfL also receiving around a billion pounds every year in retained business rates.”