Mayor secures ‘unprecedented’ transport settlement for London to support long-term economic growth

26 June 2013

 Unprecedented 6 year capital & borrowing package for Transport for London secures long-term transport investment until the end of the decade;
• Secure capital funding of around a billion pounds a year, indexed linked, from 2015-2021;
• In addition guaranteed borrowing set at £600million+ annually from 2015-2021;

The Mayor of London, Boris Johnson, has welcomed a long-term funding settlement to support investment until the end of the decade into major transport infrastructure across the capital that will deliver economic growth, homes and jobs.

Responding to the Mayor’s call in his 2020 Vision for a secure and continuous investment in transport, the Chancellor today confirmed an unprecedented 6 year settlement for Transport for London from 2015-2021. The capital funding commitment begins with an investment grant of £925m in 2015/16 rising to £1,007m in 2020/21, alongside annual borrowing limits of £600m+ to finance capital investment into transport infrastructure.

This funding package will enable the continuation of Tube upgrades, investment into roads and cycling as well as improvements to bus, DLR, London Overground and Tramlink networks. It will also critically enable the delivery of a series of vital transport projects which the Mayor has called for to support regeneration and jobs as well as greater devolved rail powers.

In addition to the long-term revenue settlement the Mayor has secured the following commitments from the Chancellor and the Secretary of State for Transport:

• West Anglia suburban rail services to be devolved to the Mayor and Transport for London;
• A £500m borrowing guarantee to support housing and transport infrastructure in Tottenham;
• A £90m commitment to carry out electrification of the Gospel Oak to Barking overground line, as a first step towards the extension of the line to Barking Riverside, unlocking thousands of homes;
• An initial commitment from Government to Crossrail 2 of £2m for feasibility studies into the vital north south rail link.

The Mayor has welcomed the Chancellor’s commitment to examine the findings of the London Finance Commission which has outlined the case for greater revenue raising powers for the capital.

The Mayor of London, Boris Johnson, said: ‘Today’s announcement shows that the Government recognises the vital importance of continued investment into London, representing good news not just for Londoners, but for the wider UK economy, the capital’s being a key driver of growth across the country. As I have outlined in my 2020 Vision, to cope with expected population expansion, London needs sustained investment to keep the city moving and to build its economy. This settlement gives us a far greater level of financial certainty in line with measures we have lobbied for and to deliver vital infrastructure. I am pleased to also welcome specific commitments to a series of projects set to trigger significant development and regeneration in areas that need it most, helping to unleash the delivery of homes and jobs.

‘Transport for London will continue to drive its major programme of efficiencies and savings to demonstrate value for the taxpayer. We are confident that this can be achieved without compromising the priority projects London so urgently needs.’

The Mayor has already committed to Transport for London efficiencies totalling £9.8bn to 2017/18. Savings are being achieved through a variety of ways including more efficient ways of working, better maintenance practices, competitive tendering of the bus network, the re-let of the congestion charge contract, cuts in marketing spend and the disposal of property assets. Today’s confirmed Government grant settlement for 2015-16, when all funding streams for this period are taken into account, represents a reduction of support for Transport for London of 8.5 per cent. The Government reduction to TfL’s transport grant by £222m works out as 2.2 per cent less in TfL’s total capital and revenue budget based on 2013/14, and is the result of successful negotiation by the Mayor to protect the best possible transport settlement for Londoners in terms of value for money.

Today’s announcement will give the Mayor the ability to progress his ambitious regeneration plans in Tottenham with the aim of delivering around 10,000 new homes and 5,000 new jobs in the area. Working with Haringey Council, the Mayor will now develop proposals to bring forward an ambitious programme of housing delivery and regeneration, job creation initiatives, transport infrastructure and public realm projects amounting to investment in the region of £500m thanks to today’s ‘guarantee’. This would include improvements to train services and stations between Stansted, Liverpool Street and Stratford.

The settlement supports the Mayor’s aims of creating jobs and growth as London’s population is set to expand more rapidly than previously anticipated, reaching 9 million by 2020.

Ends

Notes to editors:

• To read the Mayor’s 2020 Vision, follow this link: http://www.london.gov.uk/mayor-assembly/mayor/vision-2020

• To read the London Finance Commission report ‘Raising the Capital’, follow this link: http://www.london.gov.uk/priorities/business-economy/publications/raising-the-capital