The government has threatened to remove Mayor Sadiq Khan from control of Transport for London unless he cuts costs and raises fares in exchange for a bailout.
The mayor of London needs a £ 4.9 billion settlement to bail out TfL for the next 18 months after passenger numbers collapsed and revenues collapsed in the wake of the pandemic.
The government granted an initial six-month support package worth £ 1.6bn to the broad transport authority in May.
Grant Shapps, the transport secretary, wrote to Mr Khan with a series of demands in return for any financial bailout.
The government has threatened to remove Mayor Sadiq Khan’s control from Transport for London unless he cuts costs and raises fares in exchange for a bailout
Mayor of London needs £ 4.9bn settlement to bail out TfL for the next 18 months after passenger numbers collapse and revenue collapse following pandemic
According to Financial Times letter urged Khan to increasee city-wide housing tax, widen congestion charge zone, and introduce higher metro and bus fares.
It also raised the controversial topic of promoting driverless trains.
In return, Mr Shapps proposed a six-month funding deal until March 2021, dubbed the “H2 deal,” which would be replaced by a longer-term settlement.
But the Transport Secretary warned that government support for London “would take a different form” if the two sides failed to strike an H2 deal or if its terms were not met.
TfL’s board is due to hold a critical meeting on the settlement on Wednesday.
“We will take back up legislative powers allowing us to run TfL if necessary,” Shapps said in the letter.
According to the Financial Times, the letter called on Mr Khan to increase the city-wide council tax, expand the congestion charge zone, and introduce higher metro and bus fares (pictured on the metro in 2016)
“This would be combined with a new set of short-term funding regulations. “
In an October 6 response, Mr Khan rejected all of the demands and insisted that a council tax increase for Londoners “would put even more faith in an already broken form of taxation and be regressive ”.
On the expansion of the congestion zone, he added: “This brutal approach would have a catastrophic effect on the economy of central London and beyond. “
The government has since been accused of requiring “punitive” terms to accept the funding deal.
Mick Cash, general secretary of the Rail, Maritime and Transport Union, said: “The speculation that the government is threatening to take direct control of TfL looks like further intimidation from this administration designed to impose their will on the Londoners and flout local democracy. .
“Pending official confirmation of future transport financing agreements in the capital, RMT reiterates our position that we will not tolerate any attack on jobs and terms in any quarter as part of an agreement.
Grant Shapps, the transport secretary, wrote to Mr Khan with a series of demands in return for any financial bailout
The government’s battle with the mayor of London comes at a difficult time for decentralization, as Wales, Scotland and Northern Ireland impose their own lockdown restrictions and Boris Johnson has dropped negotiations for support of Greater Manchester.
In his letter, Mr Shapps said he expected Londoners to pay more with a supplement to their council tax to help improve TfL’s finances.
He also made it clear that he expected the mayor to initiate “pension and workplace reform” at TfL, accelerate “insufficient” progress in the implementation of driverless trains, reduce fare concessions for children and retirees and applies a rate increase above the “RPI + Inflation + 1 percent model approved in May.”
The mayor has imposed a rate freeze for the past four years. The transport secretary also urged the mayor to expand the central London congestion charge zone to cover the same areas as the “very low emission zone” from October 2021.
He compared the imposition of strict conditions on London with the government’s “continuous blank check” for the rail industry with minimum conditions.
A spokesman for the mayor of London said negotiations with the government were continuing, but added: ‘Suffice it to say there is simply no way a mayor could agree to terms of this nature. , which would make it harder to fight the virus and suffocate London. economic recovery at the worst possible time ”.
A spokeswoman for the Department of Transport said: ‘We have agreed to an extension of the support period and to roll over unspent funds from the extraordinary transport financing agreement for London, which leaves more time for negotiations for a new settlement.
“These discussions will ensure a secure and reliable network for London. It would be inappropriate to disclose more details at this point.