The Mayor of London, Sadiq Khan, has outlined the dire threat against tens of thousands of jobs across the country if the Government fails to provide the long-term and capital funding TfL needs.
TfL is dealing with an unprecedented financial crisis caused by the pandemic and with less than a month until the current TfL funding deal from the Government expires, the Mayor has warned that if Ministers do not fund TfL properly, the repercussions will be felt all around the country.
London is the motor of the UK economy and its transport system will be of huge importance if the capital is to drive the national recovery from the pandemic. London’s net contribution to the Treasury was £36 billion in the year before the pandemic, and TfL contracts contribute around £7bn to the UK economy while supporting 43,000 jobs around the country, with 55p of every pound spent on London Underground by TfL going outside of London.
If such projects cannot continue due to a lack of funding from the Government, tens of thousands of jobs will be at risk, many of which are likely to be outside of London. London’s bus manufacturing supports 3,000 jobs across the UK alone, including in Scarborough, Falkirk, Leeds and Ballymena, Northern Ireland, making up a third to half of all new bus orders in the UK in any given year.
TfL has paused awarding new bus contracts since early November, and London bus operators only place vehicle orders when new contracts have been awarded, meaning the lack of a long-term funding deal is having an immediate impact on the order books for UK bus manufacturers.
1,000 New Routemaster buses, brought in by the previous Mayor – now Prime Minister – and owned by TfL, are also currently due their mid-life refurbishment. If the Government fails to provide the funding required, TfL may be unable to refurbish these buses and, along with potential bus service cuts under a managed decline scenario, may need to be removed from the roads, impacting the order pipeline for a range of bus manufacturers and specialists around the country.
In addition, the continued electrification of the capital’s bus fleet would be under threat, with the date for a full zero-emission fleet likely to slip until at least 2037, from 2034. Bus electrification in London is encouraging other areas around the country to follow – so if orders for electric buses stop in London, not only will jobs be at risk, but progress towards electrification will slow nationally, increasing costs and losing the benefit for the entire country.
As well as key suppliers, TfL awards support work for around 3,000 Small and Medium sized enterprises (SMEs) in the UK. Many of these have very niche products and services and TfL can be a significant proportion of their turnover. SMEs account for three fifths of the employment and around half of turnover in the UK private sector, and their recovery and growth is essential.
London Underground renewal projects also account for a significant number of jobs across the country. 100 per cent of track labour is UK-based, with an estimated 20 per cent (£16m) supplied from North West England and Wales. The Central Line Improvement Programme, (CLIP) has already begun investing millions into rolling stock, infrastructure and equipment for the Central Line fleet.
Following TfL’s order for 94 new Piccadilly Line trains, Siemens is building a manufacturing facility at Goole in Yorkshire, representing an investment of £200m into the area, creating 700 direct jobs and 1,700 indirect jobs once the factory is in operation. Half of the new Piccadilly line trains will be assembled there in the coming years. TfL also has options built into its contract with Siemens to build new Bakerloo and Central line trains in the future, so if TfL has sufficient funding to activate these options that could provide ongoing work for this important Yorkshire manufacturing base and its supply chain.
The Mayor of London, Sadiq Khan, said: “London’s transport system is not only fundamental to the success of the capital, but to driving economic prosperity right across the length and breadth of the country.
“That is why it is so important that the Government urgently comes forward with the long-term funding TfL desperately needs so we can keep services running and deliver much-needed improvements to our transport infrastructure.
“It is no exaggeration to say that tens of thousands of highly skilled jobs – many of which would be from outside the capital – will be at risk if Ministers fail to properly fund TfL. In addition, our strides towards bus electrification will be halted, and the capital will suffer with fewer buses on the roads and an unreliable Tube service with aging trains.
“The Government needs to realise that a properly-funded transport network in London is an issue of great national importance. Failure to provide sustainable funding will lead to less economic prosperity across the country, with fewer jobs created, fewer homes built – and, crucially, less revenue generated for the Treasury to invest around the country.”
Frances O’Grady, General Secretary Trade Union Congress, said: “A fair, long-term funding settlement [for TFL] is vital not only for the London economy but the national economy too. Another temporary deal would hold London back, and it would put jobs at risk in London’s transport system and in transport supply chains across the country, including high quality manufacturing jobs that we need more of.
“Government, employers and unions must work together to make sure working people do not pay a price for the impact of the pandemic. We need a settlement that protects good quality jobs and services, and that creates work upgrading transport infrastructure to reach zero transport emissions.”
The Government only provided a short-term funding deal that lasts until February 4 and without a clear commitment to provide sufficient long-term funding, or continued short-term deals, TfL is currently having to plan on the basis of a managed decline of the capital’s public transport network.
This could lead to run-down services reminiscent of the 1970s and 80s. In practice, this could mean more than 100 bus routes being withdrawn and less frequent Tube timetables on a number of lines and branches, with more overcrowding despite the ongoing importance of social distancing.
Such is the scale of savings that could be required, TfL is even having to look at going further and potentially closing a whole Tube line.
TfL has already had to make tough decisions on future projects due to the economic impact of the pandemic, including putting the Bakerloo line extension on pause. In a managed decline scenario, the Bakerloo line extension along the Old Kent Road towards Lewisham would become undeliverable for at least a decade.
Without proper funding from the Government for new transport infrastructure, there would be 155,000 fewer homes delivered by 2031, equating to a loss in potential land value uplift of between £6bn and £9bn.