Transport for London (TfL) has secured a £1.6bn government bailout after the coronavirus pandemic caused its income to fall by 90%.
London Mayor Sadiq Khan had been warning that services on Tubes and buses would have to be cut if a financial injection wasn’t agreed by the end of the day.
A source close to his office told Sky News that fares would have to rise under the terms of the deal, which would also see government officials join TfL’s board.
The settlement – £505m of which is in the form of a loan – emerged days after Sky News revealed TfL was facing the prospect of a £4bn loss.
Stay-at-home orders have seen TfL passenger numbers collapse during the COVID-19 outbreak.
The transport authority has furloughed 7,000 staff in order to access government money to subsidise their wages and save cash – and despite halting 300 construction projects, its costs have still been running at £600m a month.
Any cuts to Tube or bus services would have threatened efforts to get key sectors of the economy back to work following seven weeks of coronavirus hibernation.
The mayoral source said: “The government has belatedly agreed financial support for TfL to deal with COVID-19 – as they have for every other train and bus operator in the country.
“But they have forced ordinary Londoners to pay a very heavy price for doing the right thing on COVID-19 by hiking TfL fares, temporarily suspending the Freedom Pass at busy times and loading TfL with debt that Londoners will pay for in the long run.”
The source said a further condition was a guarantee that full services would return to London’s transport network in future.
Another related to the visibility of government information advertisements on the coronavirus crisis.
It is unclear whether any fare increases would be above or below the rate of inflation.
Full details are expected to be confirmed to the City on Friday morning.
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