Businesses including Mace and Arcadis urge chancellor to commit to long-term TfL capital funding | New Civil Engineer

The London transport operator’s capital funding is needed for asset renewals, upgrades and major projects to move forward as planned.

Central government removed TfL’s revenue grant in 2018 and left the transport operator to subsist on its own income, which it was managing to do until the pandemic significantly slashed its income and put it into a situation where capital funds were minimal. It then entered a protracted negotiation with the Department for Transport (DfT) for a long-term capital funding settlement that ultimately resulted in a £3.6bn settlement that would see it through until the end of the 2023-24 financial year.

With the end of that settlement now approaching, TfL and London mayor Sadiq Khan have already warned that there could be as much as a £475M shortfall in capital funds for 2024-25 and have renewed calls for a long-term settlement.

Chiefs at London-based businesses including Arcadis, Mace, Heathrow, HS1, Landsec, Gatwick Airport, Stansted Airport, Siemens Mobility and more have now co-authored an open letter to chancellor Jeremy Hunt urging him to commit to a capital funding deal in his upcoming Autumn Statement, which is due to be delivered on 22 November.

“With passenger levels recovering [post-pandemic], TfL is now on track to be self-sufficient by March 2024 when it comes to day-to-day operations as required by the terms of its current funding deal,” the letter states. “While this is welcome, TfL cannot alone be expected to cover the capital investment needed to fund major renewals and enhancements through its own operating incomes.”

It continues: “The current uncertainty on capital funding is undermining the ability to plan and deliver projects needed to ensure London’s transport network remains fit for purpose. It is also unhelpful for the network’s wider supply chain across the country.”

The coalition mentions that TfL’s investment in its UK supply chain was worth £5.9bn in gross value added to the UK economy in the last year, supporting more than 100,000 jobs – with 8,870 being in the North West and 5,160 in the North East.

The letter continues: “All other major transport authorities around the world receive government support for capital investment so we urge you to agree a capital funding deal for Transport for London beyond March 2024. In the short-term TfL needs £500M of capital funding to see it through 2024-25, but in equal measure, it must receive a multi-year capital funding deal – similar to those the government already has with Network Rail, National Highways and eight city regions across the UK – to ensure it delivers projects in the most cost-effective way. The alternative is slow decline and greater costs in the future.

“If the government’s promise to take long-term decisions for a brighter future is to be borne out, capital funding to keep the capital city moving is essential.”

The letter cites the success of the Docklands redevelopment via Jubilee line extension and creation of the Doclands Light Railway as a success story, as well as that of the Elizabeth line. “The promise of Docklands 2.0 is only plausible with additional sustained transport investment,” it states.

The letter continues: “Without a multi-year capital funding deal, London risks grinding to a halt. As assets age they become less reliable. To maintain the safety of the network, that will inevitably result in more frequent disruption for passengers. And we know that when the quality of transport services deteriorates passengers leaving the network, taking revenue with them, and making future investment even harder to find. This spiral of decline must be avoided at all costs.

“A long-term capital funding deal for TfL – as recommended by the recent National Infrastructure Assessment – would provide the certainty needed for London to support economic growth, encourage and enable greater use of public transport to support decarbonisation targets, and boost a supply chain that touches every corner of the UK.”

The full list of signatories is below.

HM Treasury has been contacted for comment.

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