Barclays 'fails to fund' London cycle hire expansion

Barclays signed a deal to sponsor the cycle hire scheme in 2010

London's cycle hire scheme underwent a major expansion last year without funding from its sponsor Barclays, it has been revealed.

A document from August 2011, released via a Freedom of Information request, showed Transport for London (TfL) had expected £10m from the bank towards phase three of the scheme.

The roll out to south-west London was partly funded by local councils.

TfL said they still "expect to receive a contribution" from Barclays.

Barclays said they were were in discussions to finalise a "legal amendment" to the existing contract.

'Free advertising'

The document obtained by the website MayorWatch, showed Barclays had pledged a further £10m towards the expansion, but the deal was never formalised by TfL.

The deal signed by Barclays in 2010 secured £25m in funding for the first two stages of the scheme.

London Assembly members have asked the Mayor of London, Boris Johnson, why Barclays' logo appears on the scheme's livery in Wandsworth, Hammersmith and Fulham, Lambeth and Kensington and Chelsea.

Labour member Val Shawcross said the company had been handed "at least £10m of free advertising".

She said: "Not only does this undermine the whole point of bringing in sponsors to part-fund public transport projects, but it appears London boroughs - and their council tax payers - have had to stump up the missing money."

'Expected contribution'

Hammersmith and Fulham Council, Lambeth and Wandsworth councils collectively paid around £4m to the expansion, which took place in December.

BBC London's political correspondent Tim Donovan said the rest of the money came out of TfL's budget.

Boris Johnson launched the extension of the cycle hire scheme in December

Martin Hoscik, from MayorWatch, said: "The new document makes it clear that Barclays was expected to provide £10m for the third phase expansion and actually they provided... nothing. It looks like they benefitted from taxpayers PR."

In December, it was announced that Barclays would not be renewing its sponsorship when their current deal ends next year.

Graeme Craig, director of commercial development at TfL, said: "The heads of terms document was agreed and signed by TfL and Barclays in 2011 and set out the initial proposal for the additional £25m extension of the cycle hire sponsorship, subject to the agreement of a formal contract.

"They do, however, remain the sponsor of the Barclays Cycle Hire scheme until 2015 and we expect to receive a contribution from them for the phase three extension."

Following its decision not renew its sponsorship, Barclays agreed that the initial £25m could be used for phases one, two and three of the project until August 2015, if a new sponsor was not found before that date, this deal included a written commitment to pay on a pro-rata basis for the phase three expansion.

"This commitment was made in writing ahead of the Phase 3 launch and Barclays and TfL are in discussions to finalise a legal amendment to the existing contract accordingly," a representative of the bank said.

"Barclays has offered to exit early from the sponsorship agreement to enable TfL to secure a new sponsor at the earliest opportunity."