TfL and the new Government

[Thirteen]

Assuming Labour gets into power on 5th July, it'll be mean that the relationship between City Hall and Westminster will improve tenfold, and thus there will be less or none of the difficulties getting funding for TfL projects.

But at the same time, Sadiq Khan has said he doesn't expect a blank cheque from the Treasury, so I wonder what will happen.

I'm guessing a £500m-1bn a year funding deal, which could help projects currently mothballed, such as new Bakerloo Line trains and maybe a commitment to funding certain big ticket projects such as Crossrail 2

 

[JonathanH]

I'm guessing a £500-1bn a year funding deal which could help projects currently mothballed such as new Bakerloo Line trains and maybe a commitment to funding certain big ticket projects such as Crossrail 2

Where is the new money going to come from given the comments from the Labour Party on a fully costed plan for government? Is there any evidence for this sort of increase in TfL funding in Labour's manifesto? I don't think it includes the sort of spending commitments you are alluding to. Crossrail 2 is surely dead for a generation or two.

 

[Thirteen]

Where is the new money going to come from given the comments from the Labour Party on a fully costed plan for government? Is there any evidence for this sort of increase in TfL funding in Labour's manifesto? I don't think it includes the sort of spending commitments you are alluding to. Crossrail 2 is surely dead for a generation or two.

The Bakerloo Line trains can't fully be funded by TfL so Government funding is needed. A Labour Treasury isn't going to let London have rickety tube stock for the next decade or so.

 

[ScotGG]

Im not sure Labour will fund directly via the Treasury but perhaps devolve tax raising powers in certain areas.

 

[Thirteen]

Im not sure Labour will fund directly via the Treasury but perhaps devolve tax raising powers in certain areas.

Restoring the subsidy that was in place before 2016 would help massively.

 

[JamesT]

Restoring the subsidy that was in place before 2016 would help massively.

Isn’t the business rates retention that was put in place then a larger amount than the previous direct grant?

 

[SynthD]

If the economy improves, the tax income will rise and the gov could divert some to TfL. The debt rating may also rise, permitting cheap loans. The home builders will be helped/pushed into greater activity, which includes funding transport projects.

Can debt be moved around? Relieve TfL of its debt by moving it to the national debt, and TfL can build it up again with new projects.

 

[HullRailMan]

Labour are committed to the same spending plans as the current government, so there won’t be a pot of cash from the treasury. I’d expect them to create wriggle room for TfL to finance themselves through greater tax raising powers in London, borrowing or PFI. Even if a pot of money does appear through the miraculous growth they predict, there will be huge political pressure to spend any additional resources away from London, assuming it goes on transport at all.

 

[Bevan Price]

Labour are committed to the same spending plans as the current government, so there won’t be a pot of cash from the treasury. I’d expect them to create wriggle room for TfL to finance themselves through greater tax raising powers in London, borrowing or PFI. Even if a pot of money does appear through the miraculous growth they predict, there will be huge political pressure to spend any additional resources away from London, assuming it goes on transport at all.

The first thing to benefit from additional funding for transport is more likely to go to roads - filling potholes, followed by new by-passes......
And the Treasury will be looking for ways to replace the long-term decline in revenue from fuel tax.....

 

[miklcct]

There was a piece of news saying that the future Labour Government will block further TfL takeover of the suburban rail, which makes it as bad as the Tories.

Labour officials told the FT that it had no plans to proceed with Khan’s proposal, and that the lines would be renationalised and run by the new Great British Railways instead.

In my opinion, a national body will not prioritise Londoners' interest on local rail transport, as what the current nationalised Southeastern has demonstrated. Only local administration can improve local transport and serve local residents' needs.

 

[Mikey C]

Whoever wins, the Bakerloo Line trains have to be replaced before they completely flake out, leaving a major London line crippled for years.

Plus, there is a factory and assembly line especially set up to build them.

 

[Thirteen]

Isn’t the business rates retention that was put in place then a larger amount than the previous direct grant?

Not sure TBH. I think for the short term, we might see the more urgent capital projects get Government funding as it's a win win for both London and Yorkshire since the cost of building the 2024 stock for the Bakerloo means jobs and a boost in the local economy for both regions.

 

[Mikey C]

Not sure TBH. I think for the short term, we might see the more urgent capital projects get Government funding as it's a win win for both London and Yorkshire since the cost of building the 2024 stock for the Bakerloo means jobs and a boost in the local economy for both regions.

And even the most grumpy "anti-London getting all the money" types would admit that replacing trains that are over 50 years old isn't favouritism to London!

 

[Thirteen]

And even the most grumpy "anti-London getting all the money" types would admit that replacing trains that are over 50 years old isn't favouritism to London!

It's a necessity rather than a nice to have at this point. We saw what happened with the Island Line where the rolling stock was in single figures.

 

[JamesT]

And even the most grumpy "anti-London getting all the money" types would admit that replacing trains that are over 50 years old isn't favouritism to London!

TfL has managed to finance acquiring rolling stock itself in the past without grants from central government. The question would be why this procurement is different?

 

[sjoh]

TfL has managed to finance acquiring rolling stock itself in the past without grants from central government. The question would be why this procurement is different?

TfL's operating costs back then were partially met by government grants which gave a lot more wiggle room for capital expenditure.

 

[JamesT]

TfL's operating costs back then were partially met by government grants which gave a lot more wiggle room for capital expenditure.

But those government grants were replaced by an equal amount of business rates retention.

 

[sjoh]

But those government grants were replaced by an equal amount of business rates retention.

£700m per year? Really?

 

[JamesT]

£700m per year? Really?

https://board.tfl.gov.uk/documents/s22122/fc-20240313-item06b-budget-part1-appx1.pdf on page 16 has £1,914m of business rates retention for 2023/24.

 

[Snow1964]

If you want to know what TfL are investing in, and the projects in progress and coming up, then worth reading the most recent TfL Board Investment programme quarterly report

(long pdf document, including charts, timeline boxes, and pictures, so not practical to quote)

https://board.tfl.gov.uk/documents/s22505/pic-20240626-Item06b-Part1-Investment%20-%20Programme%20-%20Report%20-Appendix%201.pdf

 

[Thirteen]

Just reviving this to wonder if the BLE might end up being greenlit during the new Government's tenure, it's the sort of project that would be seen as a regeneration of parts of South London.

Also could the mods change the title from future to new.

 

[ScotGG]

If the government are serious about house building, a Bakerloo extension seems an obvious contender. Great chance to recoup some investment costs too in inner London.

Also frees up paths to London Bridge for new towns and expansion around South Eastern stations.

 

[Meerkat]

There’s no money. Any spare money Labour can find for such things will go to propping up the northern mayors‘ schemes.

 

[Highview]

It's not as if there has not been significant private sector housebuilding in the last few years - just take a look at Colindale, many stations along the Elizabeth line west of Paddington, Stratford, Dagenham and now Barking Riverside.

 

[Meerkat]

It's not as if there has not been significant private sector housebuilding in the last few years - just take a look at Colindale, many stations along the Elizabeth line west of Paddington, Stratford, Dagenham and now Barking Riverside.

Exactly - anywhere on Crossrail, and many other rail linked commuter towns is becoming a mini city of towers of rabbit hutch flats.
The rest of the country needs to chip in.

 

[Thirteen]

In terms of win wins for the new Labour Government, helping TfL fund the replacement of the 1972 stock with 2024 stock not only ensures jobs at Goole but boost London as well.

 

[Route115?]

Could LUL lease new rolling stock? Lots to discuss there.

 

[Snow1964]

Could LUL lease new rolling stock? Lots to discuss there.

TfL took opportunity to buy the Overground trains at a lease break point, as it was cheaper in long term.

The recently published TfL settlement letter for the 10 extra Elizabeth line trains has specific clause (8) that says if there is a sale a leaseback, got to repay the £202.5m to Government.

All rather suggests that for specialist stock, leasing is more expensive in long term (which makes sense because LeaseCo is going to take a profit margin, so would be paying that to).

 

[JonathanH]

Could LUL lease new rolling stock? Lots to discuss there.

The difficulty with leasing LUL-style rolling stock is that there is nowhere else it can really be used, so the leasing simply becomes a method of financing.

Leasing 345s, for example, is different because they could be rebuilt for use elsewhere.

There is a very interesting article from the London Reconnections blog written in 2018 on the subject.

Leasing Lizzie: Finding the Funds for Deep Tube - London Reconnections

Despite recent suggestions TfL aren't about to sell off the Underground. To fund the Piccadilly though, they are going to have to get creative on Crosrsrail

www.londonreconnections.com

On 3 January 2018, the London Assembly Budget and Performance Committee sat down with TfL to go through their current budget. Discussion largely focused on the various pressures on TfL’s finances – from the removal of TfL’s government grant, to fare freezes and falling advertising revenues.

About two and a half hours in, however, Assembly Member Caroline Pidgeon asked a question: “In here, there’s a line… £850m capital receipt… what exactly is this?”

The reply, from Simon Kilonback, TfL’s Chief Finance Officer, sent eyebrows at LR Towers skyward:

“So this capital receipt relates to how we finance our rolling stock… we have decided in this business plan to press ahead with the procurement of the new Piccadilly line rolling stock and we will be looking to award that contract in the first half of 2018.”

“We’ve therefore made a decision about taking some of our existing rolling stock and doing a sale and leaseback of that, to finance the Piccadilly line rolling stock.”

 

[Thirteen]

The leasing of the 345s is slightly different from the TOCs leasing of rolling stock as TfL owned them but sold them to release capital.