'Make London pay' to boost Transport for London's flagging finances, mayor told

A Northern line platform at Waterloo London Underground station in central London

Mayor Sadiq Khan was today given an ultimatum by government to adopt a series of 'politically unpalatable' measures to boost Transport for London's finances.

Hiking council taxes, extending the Congestion charge zone, and charging motorists by the mile are among the ideas which ministers might accept, according to a government source.

Mr Khan was set a deadline of 'close of play' Wednesday to put forward solutions to TfL's funding crisis.

The latest in a series of bailout agreements totalling more than £4bn is due to expire at midnight on Saturday.

TfL wants £1.7m to keep it afloat for the next 18 months and a further £1.3bn every year to fund improvements.

But talks to secure a long-term funding package have stalled with both sides accusing the other of failing to engage.

Minister for London Paul Scully - writing in the Evening Standard - said the mayor's behaviour was blocking efforts to secure a long-term funding deal.

He accused him of 'scouring the dictionary of doom' by repeatedly warning of huge cuts to Tube and bus services.

The minister said the government was committed to making-up any Covid-related shortfall in TfL's income.

"Just in case anyone is worried, I'll say this: In the next deal we will commit, as we have before, to making up TfL's loss of fare revenue from Covid. TfL's main source of income is therefore guaranteed by state - at a cost so far of £4bn," said Mr Scully.

The government is calling on TfL to revise its ambitious spending plans to take account of hybrid working with many Londoners opting to work from home on some days.Earlier this year the mayor proposed a Greater London boundary charge to raise £500m annually but that was rejected by ministers.

"We have been trying to talk to them for months. The idea we haven't engaged with them is completely wrong. We gave them a whole list of options in the summer", said a City Hall source.The source suggested the government would be happy for the mayor to take the blame for money-raising schemes which might anger some voters.