Mayor halves transport funding request from Budget

Sadiq Khan says the reduced amount is due to a "black hole" in public finances

London mayor Sadiq Khan has halved - compared to last year - the minimum amount of money he is asking from the government to fund major transport projects.

The Labour mayor had asked the last Tory government in 2023 for a minimum of £569m to pay for a range of infrastructure upgrades, and complained after receiving only £250m.

Khan told the Local Democracy Reporting Service he now believes it would count as “a win” to receive “anything more than £250m” from the Labour government.

City Hall Tories said the mayor was “watering down” what they claim were “exaggerated financial demands”.

Khan said the reduced funding demand was due to the “£22bn black hole” in public finances cited by the chancellor.

Ahead of the last government’s autumn statement in November last year, Khan had said in a letter to then-Chancellor Jeremy Hunt that Transport for London (TfL) “needs £569m in capital support for 2024/25 to support critical network upgrades and investment in critical road assets”.

He added: “Failure to secure this funding would put vital upgrades at risk and be detrimental to long-term infrastructure investment in the capital’s transport network, with consequential negative impacts on the wider UK economy.”

Rachel Reeves is set to deliver her first Budget on Wednesday

However, asked earlier this week what he will be requesting from the new government, Khan said: “I’ll be asking for north of £250m. The £250m we got last year was before the £22bn black hole in the government’s year-to-year expenditure.”

The chancellor’s claim that she had inherited a £22bn gap in the public finances was met with ridicule by her Conservative opponents.

Her predecessor, Hunt, said she would “fool absolutely no one” and accused her of a “shameless attempt” to lay the groundwork for tax rises in her upcoming Budget.

But Khan insisted Reeves had been forced to find ways to “make ends meet”, and said, in that context: “I’ll ask for as much as I can get. But what I’m saying is, a win is getting anything more than £250m.”

He said the "real prize" will be at the spring spending review where he hoped to secure a multi-year deal for funding after the 2025/26 financial year.

Neil Garratt, leader of City Hall Conservatives said: “Last year the mayor said that £500m was the absolute minimum to stop TfL collapsing, but this year he claims that anything ‘north of £250m’ is a win.”

“Consistently under Khan’s mayoralty he made exaggerated financial demands, which made it impossible for a Conservative government to work constructively with him.

“Now that he has a Labour government he can’t get away with that; he’s forced to be honest. What other demands are going to be watered down in the next few years?”