Transport for London (TfL) may have to declare bankruptcy if the government does not say whether it will cough up new funds in the coming days, the mayor’s office has warned.
A spokesman for the Mayor of London today said the mayor was still engaged in negotiations with the government over a new funding deal and that it was ‘vital’ the government agreed to provide funding term for transport in the capital.
“Some 43,000 jobs outside of London depend on investment from TfL,” the spokesperson said in a statement.
“If the government refuses to provide the funding TfL needs, it could impact TfL’s UK-wide supply chain, affect jobs and growth and stall economic recovery in London and throughout the UK,
TfL is currently unsure whether it will be able to balance its books and chief financial officer Simon Kilonback is believed to be preparing a number of measures in case the government does not indicate it will provide funding in the coming days.
One of the measures being considered is the publication of a report under section 114 of the Local Government Finances Act 1988, which would effectively declare TfL bankrupt.
TfL’s warnings come after its current funding deal expired last night, having been extended for a second time on February 4.
The London Assembly lobbied the government this week and warned TfL was ‘crippled’ by a lack of funding.
In a letter to Transport Secretary Grant Shapps on Thursday, the London Assembly warned that TfL could not invest in new rolling stock and that many bus routes could not be returned, leaving vehicles very pollutants on the road.
TfL bosses refused to accept a draft funding deal on February 4 due to what were seen as “unacceptable” conditions attached to it.