TfL to raise congestion charge by 30% as part of £1.6bn bailout deal

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  • May 15, 2020
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Transport for London is to raise the congestion charge by 30%, temporarily stop free travel for children and charge over-60s to travel at peak times after securing a £1.6bn bailout from the government.

TfL was forced to turn to the government after reporting a 90% fall in income as journeys on public transport in London have dried up during the nationwide lockdown.

The capital’s congestion charge of £11.50 will be reimposed from Monday, as will the separate £12.50 charge imposed on older and dirtier vehicles entering central London. They had been lifted during lockdown.

The congestion charge will then rise to £15 from 22 June, with enforcement extended from weekdays to the whole week and for longer hours.

Free travel for under-18s will also be temporarily suspended, so too for people over 60 or with a disability during peak hours.

The government has admitted that physical distancing may not be possible on public transport and urged people to use their cars to get to work instead. The transport secretary, Grant Shapps, said on Tuesday: “If people have access to a car, we urge them to use the car, before they consider public transport.”

Unveiling the TfL changes, the mayor of London, Sadiq Khan, said: “Public transport must now be the last resort.”

Travellers in the capital already face a fare increase in January, after a four-year freeze.

“This is not the deal I wanted,” said Khan said of the TfL bailout. “But it was the only deal the government put on the table and I had no choice but to accept it to keep the tubes and buses running. The government is, in effect, making ordinary Londoners pay the cost for doing the right thing on Covid-19.”

The Department for Transport said the government did not force Khan or TfL to raise the congestion charge as a condition of approving the bailout.

A spokesman for the Mayor of London said that the government and Khan agreed that the charge should be reviewed, but that it was the mayor’s decision to increase it.

The mayor urged Londoners to work from home and spend more of their leisure time in their local areas. Although using public transport should be a last resort, Khan added, journeys should not be replaced by cars “because our roads would immediately become unusably blocked and toxic air pollution would soar”.

He said two key Thames crossings – Waterloo and London bridges – may be restricted to people walking, cycling and buses only. Some streets will also be designated for walkers and cyclists only. Deliveries may have to be made overnight.

TfL said it was facing a £3bn finance gap this year owing to fare revenue lost during the coronavirus pandemic, suggesting it may still need more cash from the government as the agreed bail out will only keep the organisation going until October.

TfL said a financial forecast, assuming the prioritisation of essential services and activities, predicted a £1.9bn funding gap in the six months to the end of October that would widen to £3bn in the full-year to the end of March 2021.

Under the terms of the government funding package agreed with the Department for Transport, TfL will be able to draw down to £1.9bn. The funding requirement will be under review until 17 October and the government said passengers would face higher fares. The initial £1.6bn agreement comprises a £1.1bn cash grant and another £505m in loans.

TfL said on Friday: “In recognition that the current circumstances are likely to present ongoing financial challenges, a combination of future measures from TfL, Greater London Authority and the government will be implemented to enable TfL to maintain essential services and deliver a revised balanced budget over the remainder of the financial year.”

Lockdown measures have resulted in a 95% fall in journeys on the underground and an 85% fall in journeys on London buses, said TfL.

“It is expected that the recovery will take some time and that passenger income will continue to be severely impaired after the strict response measures are gradually eased,” it added.

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On Thursday, the transport minister, Grant Shapps, said passengers would eventually need to pay higher fares to help finance TfL.

He said the government did not want a situation whereby people outside London were “unfairly carrying the burden, by which I mean, sadly, fares do end having to rise with inflation”.

During negotiations Khan had warned that he might have to cut tube and bus services unless the government stepped in with a grant, after the capital’s transport authority burned through £1bn of its cash buffers.

Last month, bus companies in England received a £400m bailout to ensure that services needed by frontline workers such as NHS staff can keep running. As part of the rescue deal, the government will provide £167m over three months, as well as guaranteeing to honour a further £200m of planned investments that would otherwise have been at risk.

The terms of the bailout also made clear that concessions should be maintained if possible. The transport department said councils had been “encouraged” to maintain subsidies for concessionary fares to ensure that older and disabled people can still travel when they need to reach shops, hospitals and doctors’ surgeries.