'Stop gap deal'

Londoners can breathe a sigh of relief after London mayor Sadiq Khan successfully negotiated a Transport for London (TfL) funding deal with central government which will keep public transport in the capital running at a time of ongoing crisis as the UK faces a second national lockdown.  

The deal, which agrees funding until March 2021, is worth about £1.8bn, with Khan successfully seeing off government threats to institute above inflation fare rises, expand the congestion charge and scrap free fares for children and adults over 60 as conditions of the bailout.

Unite, which represents thousands of workers in the public transport sector in London, has given a cautious welcome to the six-month deal – but the union believes there must be a long-term sustainable funding plan to protect the interests of both the travelling public as well as transport workers.

Khan said the agreement was ‘not ideal’ but he said he was successful in “killing off the very worst government proposals”.

Among these proposals that have now been dropped by the government is an expansion of the area that the £15-a-day London congestion charge covers from the 8 miles within the city’s centre to the North and South Circular roads, which are used by hundreds of thousands of drivers every single day and would hit an additional 4m Londoners.

When the congestion charge expansion was first proposed, Unite slammed the plan, noting that it would punish the poorest Londoners.

“Not only are these increases vindictive, they are dangerous,” said Unite regional secretary for London and Eastern Pete Kavanagh last month. “We do not know when the pandemic will end and by massively expanding the congestion charge people will be forced onto public transport at the same time as they are being told to socially distance.

“Even when and if Covid-19 is brought under control it will take time for people to regain the confidence to use public transport, which is often crowded. The increased congestion charge is punishing Londoners who have been trying to stay safe and reduce their risk of exposure.”

Under-18s and over-60s will get to keep free travel, and the government has also dropped plans to increase fares by more than the already-agreed rate of inflation plus one percent.

It has been confirmed that under the new deal, the terms and conditions of TfL staff will not be reduced, nor will their pensions be cut.

Under the new deal, TfL will need to contribute £160m to the funding shortfall, by raising additional income or savings through cost control and less spending.

The latest agreement was struck in the eleventh hour just minutes before a deadline which would have forced TfL to issue a section 114 notice – essentially declaring itself insolvent and in the process severely curtailing services.

Khan and others criticised the government for playing political games and holding Londoners to ransom with the threat of draconian conditions imposed as part of the deal.

“These negotiations with Government have been an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs,” Khan said.

“The pandemic has had the same impact on the finances of the privatised rail companies as it has had on TfL and the Government immediately bailed them out for 18 months with no strings attached,” he added. “There is simply no reason why the same easy solution could not have been applied to London, which would have allowed us all to focus on the issues that matter most to Londoners, which are tackling the virus and protecting jobs.”

Khan warned that Londoners may still face a higher council tax bill because of government stipulations on the deal.  

Asked at the weekend whether Londoners should prepare for a council tax hike, Khan told Sky News, “They should be as a consequence of the conditions imposed by the government.”

While Unite’s Pete Kavanagh cautiously welcomed the latest deal, he said that it was vital that a more long-term funding settlement is agreed in the months to come.

“This is a short term deal which is fair for Londoners and fair for the employees of TfL,” he said, responding to the latest agreement.

 “However this is a stop gap deal and further funding will be required to see London’s public transport through the full effects of the pandemic which has devastated revenues,” he added.

 “With this funding deal agreed it is essential that the focus is now entirely on ensuring that all TfL workers and passengers are kept safe during this second wave of the pandemic, while keeping London running,” Kavanagh continued.

 “It is essential that the government stops playing political games with TfL’s funding, while the private rail companies have received no strings bailouts, Londoners still have the threat of being punished for the pandemic hanging over them.

 “It is to be hoped that when the next funding deal is discussed early next year, proposals which would punish Londoners such as massively extending the congestion charge or huge fare increases are not revisited,” he went on to say.

  “Unite has already received assurances that the latest funding deal will not result in the terms and conditions of TfL’s employees being reduced or their pensions being cut. Such assurances are needed for the long-term.

 “Going forward, it is vital that trust and confidence in public transport is rebuilt as quickly as possible, this cannot be achieved if services are cut or fares increased.”

By Hajera Blagg