Transport For London Government support package (8460D)

TIDM40CT

RNS Number : 8460D

Transport For London

01 November 2020

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.

Transport for London ("TfL")

1 November 2020

Government support package

TfL announces that a funding and financing support package (the "Funding Package") has been agreed between TfL and the Department for Transport ("DfT") to support transport services in London. The Funding Package will ensure funding is available to TfL to address its forecast funding shortfall, arising from the loss of passenger revenue as a result of the coronavirus pandemic.

The Funding Package will provide TfL with a core amount of GBP1bn for the period between 18 October 2020 and 31 March 2021 ("Support Period") and comprises the following:

1. An Extraordinary Support Grant of GBP905m payable under section 101 of the Greater London Authority (GLA) Act 1999; and

   2.   Incremental borrowing by TfL from the Public Works Loan Board of GBP95m.

The above funding amounts assume that the passenger demand over the Support Period will stay at approximately 65% of pre-coronavirus levels. This is higher than the ridership assumptions in TfL's revised budget, published in July 2020, which forecast the funding shortfall of approximately GBP2bn for the second half of 2020/21.

In recognition of the high level of uncertainty in predicting the future passenger revenue over the Support Period, the Funding Package permits modification of the total amount of support up or down depending on actual passenger revenues. It is expected to provide approximately GBP1.8bn of funding based on the amount of passenger revenue assumed in TfL's revised budget, but this could increase if actual revenues are lower than that.

As part of the Funding Package, TfL will commit to contribute approximately GBP160m to the forecast funding shortfall in the form of additional income or savings through a mixture of lower capital and operating expenditure supported by stronger financial control measures.

Over the course of the support period, TfL and DfT will continue to work on long-term funding plans to ensure TfL's financial sustainability over the medium to long term.

Discussions on funding the additional costs to complete the Crossrail project (which are not included as part of this Funding Package) remain constructive.

For further information, please contact:

Transport for London

5 Endeavour Square

London E20 1JN

Email: GroupTreasury@tfl.gov.uk

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