Source: Mayor of London
- Data reveals TfL contracts are worth £6.4bn to the UK economy, with over £2bn spent outside the capital
- TfL services are currently earning around £5.2m per day – down from around £13m in normal times
- Mayor calls on ministers to give the capital a new long-term transport funding settlement to support economic recovery
The Mayor of London, Sadiq Khan, has today urged the Government to help safeguard the future of thousands of businesses after new data revealed the extent to which investment in the capital’s transport system is driving the wider economy.
Figures show that TfL’s supply chain currently supports around 4,000 UK firms nationwide, spanning from Yeovil in the South West to Inverness in the North. The data highlights that, during the last financial year, TfL has had contracts with businesses of all sizes and contributes around £6.4bn to the economy – with around a third of this investment being spent outside of the capital.
Across the UK, TfL directly supports around 43,000 jobs through its investment programme on the Tube, which is delivering projects such as the Northern Line Extension, step-free stations and station capacity improvements which are central to London’s economic recovery and to social distancing. This is in addition to hundreds of thousands of other jobs which indirectly support TfL through its supply chain, as well as the 55,000 full-time jobs that building Crossrail has helped support across the country throughout the project’s construction, which is now in its final phase.
Pre-pandemic, TfL services would normally bring in revenues of around £13m a day – but due to continuing low levels of ridership, it is still only earning around £5.2m per day. The Mayor has issued a stark warning that the regional jobs supported by TfL – and economic recovery from the pandemic more widely – are at risk if London’s transport network is not given the appropriate long-term government funding settlement it needs.
Examples of companies TfL has contracts with include:
- Siemens Mobility Ltd – which designs, manufactures and maintains traffic signals and infrastructure across London, is also manufacturing the new cameras for the expansion of the Ultra Low Emission Zone at its facility in Poole
- Holbro Engineering Ltd – an SME engineering firm based in Fleetwood, Lancashire who provide TfL with precision-machined refurbished components for S-Stock trains which run on the Metropolitan, Circle, District and Hammersmith and City line
- Hille Seating – a company based in Gwent who have provided benches as part of station improvement works in preparation for the Elizabeth line
- Emico – a engineering firm, with a head office in Hemel Hempstead, who are providing mechanical and electrical fit-out on a number of major projects such as installing new cabling, lighting and tunnel ventilation as part of the Northern Line extension
- Pashley bikes – who build the new design of Cycle Hire bikes at their factory in Stratford upon Avon
By securing work in TfL’s supply chain, businesses also have confidence to expand and invest in their facilities. For example, Siemens Mobility committed to a new train factory in Goole, Yorkshire, after securing the contract to deliver new trains for the Piccadilly line. Construction of this factory has begun and the first apprenticeships associated with this contract are now underway.
Unlike most transport authorities around the world, the vast majority of TfL’s income is made up of fares. Despite this, TfL’s finances were in a healthy position before the coronavirus pandemic. Before the crisis, TfL was on track to reduce its operating deficit by 86 per cent compared to 2016 and boost its cash balances by 31 per cent.
Londoners did what the Government asked and stayed away from public transport during lockdown – which meant TfL’s income from fares fell by 90%. Since then, TfL has returned service frequency to pre-lockdown levels, but ridership is still at levels much lower than before the pandemic.
Mayor of London Sadiq Khan said: “It’s clear that London’s transport network has huge economic benefits for the rest of the UK – from the new factory set to be built in Yorkshire to fulfil the order for new Piccadilly line trains, to Crossrail and its supply chain.
“Because of the pandemic, TfL’s fares and other revenue fell by 90 per cent at the height of the crisis, and ridership is still nowhere near normal levels. Fares income does not cover the cost of running services while social distancing is in place and fewer people can safely use public transport.
“With TfL much more reliant on fares income than almost any other transport authority, it’s clear the old model for funding public transport in London is broken. The Government must urgently agree a new long-term funding settlement for TfL to support economic recovery and protect jobs across the country.”
Andy Lord, Managing Director of London Underground at TfL, said: “Throughout the pandemic, we have worked hard with our extensive supply chain to help them weather the economic impact and ensure their staff could remain safe – while supporting our investment programme and the safe and reliable running of our services. By having long-term committed funding, we can start work on further improvements to London’s public transport network, which will provide further boosts to companies across the whole of the UK.”