TfL funding settlement confirms LEZ will tighten in March 2021

Introducing Euro VI standards for coaches and buses entering London’s Low Emission Zone (LEZ) from 1 March 2021 forms a condition of the government’s latest funding settlement with Transport for London (TfL), which is worth around £1.8bn.

Daily charges for non-Euro VI coaches and buses to enter the LEZ were originally scheduled to begin on 26 October, but TfL postponed them during the early stages of the coronavirus COVID-19 pandemic.

TfL later announced that the change to LEZ standards would be made from 1 March 2021. A letter sent by Secretary of State for Transport Grant Shapps to Mayor of London Sadiq Khan on 31 October outlines that doing so is a condition of the extraordinary funding being given to TfL.

After confirming the 1 March 2021 change to the LEZ, TfL subsequently announced a funding stream to help affected businesses comply. It is believed that the competitive retrofit and scrappage scheme was quickly over-subscribed.

For coaches, buses and minibuses with a GVW of over 5,000kg that satisfy Euro IV or Euro V standards, a £100 daily charge to enter the LEZ will be levied from that date. Vehicles in those classes that do not meet Euro IV standards will be subject to a daily charge of £300. In both cases, no further payment will be required to drive into the Ultra Low Emission Zone.

£1.8bn has been awarded to TfL by the government. It is to enable the continuation of services in the face of a major reduction in fares income brought about by the pandemic. Mr Shapps’ letter states that the two parties aim “to be in a position where a longer-term settlement is possible from March 2021.”

Beyond that, the government continues to work with TfL towards a plan for it to reach a financially sustainable position, with a target date for implementation of April 2023. The Department for Transport defines that as TfL’s ability to cover the following from sources available to it, excluding government grant:

  • Operating expenditure
  • Capital renewals
  • Servicing and repaying debt
  • Capital enhancements.