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Sadiq Khan gives government 'last day' ultimatum for TfL bailout, warns of cutting services

SADIQ KHAN has warned the government that Transport for London will be forced to cut services if it did not receive a bailout by the end of the day.

“Being blunt, today is the last day,” the London mayor told LBC. “Unless the government gives us confirmation of the grant we need, then the consequences could be quite severe and the ramifications for all of us will be huge.


“Because we are required to keep two months’ money to pay for services, we’ll have to start reducing services”.

As per law, TfL will issue a Section 114 notice – similar to a public company going bankrupt -- if its cash reserves fall under £1.2bn, which would happen today, Khan explained.

TfL had been forced to use its £1.2 billion cash reserve fund at the beginning of May, reports noted.

The next step, Khan said, would be implementing strict spending curbs.

A TfL source added: “Every hour that goes by, we get closer to the point of having to issue a 114.”

Recent reports said TfL had been seeking a £2-billion package from the government.

Said Khan: “Over the last two months we’ve lost more than 90 per cent of our fares and advertising’s down, so is the congestion charge.

“We’ve been spending £600 million a month paying for services and getting nothing back for our customers or very little. At the start of this crisis we had a cash reserve of north of £2.1 billion, but that’s running out”.

Khan said TfL’s Chief Finance Officer Simon Kilonback “has a legal duty under local government finance laws to put an immediate brake on spending if no deal emerges”.

“Ironically at a time when the government’s wanting us to increase services, ramp up services to get into the recovery phase, we may be required to cut services because the government is failing to give us the grant support we desperately need,” he added.

Keith Prince, the Conservative Transport spokesman in the London Assembly, said the mayor’s comments were “unhelpful and alarmist”.

He accused Khan of engaging in a “political gameplay that no Londoner wants to see from their Mayor during a crisis”.

While agreeing that TfL will “inevitably need a bailout to continue operating during this crisis”, Prince argued that it had “£1.2 billion in reserves which is enough to run the network for two months”.

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