How we are funded

We're one of the only transport authorities in the world which is able to cover our day-to-day operating costs ourselves, as well as most of our more than £2bn annual capital investment programme. However, we cannot fund our capital projects entirely ourselves.

In the 2024 Autumn Budget the Government announced a one-year settlement of £485m for 2025/26. This will ensure that London's transport network can continue to support new homes, economic growth, jobs and productivity in London and the UK.

Securing long-term funding certainty would allow us to continue the vital improvements to London's transport network, supporting the Government's programme of growth and opportunities across the UK.

More information is in the Department for Transport's TfL capital funding settlement letter.

Funding sources

Fares income

Fares are the single largest source of our income and help to cover the costs of operating and improving our transport services. Around 60% of our total income is generated by fares.

Decisions on whether to change fare levels are made each year by the Mayor, after consultation with TfL.

Other operating income

We generate income from the Congestion Charge, Ultra Low Emission Zone and other road network compliance charges. These charges support policies around London's roads, including reducing harmful emissions and congestion.

Commercial activities that generate income include advertising, brand licensing and film office activity, as well as dividends from Places for London where income is generated through property rentals and property sales. We also generate income through third-party sponsorship for Santander Cycles and the IFS Cloud Cable Car.

Collectively, these sources of income are around one third the amount we raise from fares.

Grants

Grants are received from central and local government. The main sources are:

• Business Rates Retention - funded from a proportion of local business rates and paid to us from the GLA. This is the largest source of grant income to TfL
• GLA precept - funded from Council Tax receipts and set annually by the Mayor
• Other capital grants, for example from the Housing Infrastructure Fund. These grants fund specific projects where we have agreements with other funding bodies, including central government
• Funding of £485 million for 2025/26 from the Department for Transport to support our ongoing capital projects and investment in our capital programme. This amount includes funding for the procurement of additional Elizabeth line trains as stated in the capital funding settlement letter of 14 June 2024

A copy of the latest funding agreement letter is on the Funding letters page.

Borrowing

We have historically used borrowing to help finance investment in London's transport network. All of our borrowing is conducted in line with the provisions of the Prudential Code for Capital Finance in Local Authorities issued by the Chartered Institute of Public Finance and Accountancy.

Our total value of borrowing and other long-term liabilities will stay within our authorised limit for external debt at all times, ensuring that any borrowing is prudent and affordable.

Included in our borrowing portfolio is debt largely from the Public Works Loan Board (PWLB), a readily available source of liquidity, as well as borrowing from European Investment Bank, Export Development Canada and amounts outstanding under our Commercial Paper and Medium Term Note programmes.

Also included are loans from other financial institutions and/or public bodies, such as the Greater London Authority's Green Finance Fund and The National Wealth Fund.

Find out more about our borrowing programme.