London Mayor's office warns potential loss of jobs and contracts in East Midlands

Above: London's tube train infrastructure relies on production in the East Midlands.

Future Cities Forum will be looking at the economy of the Midlands at its third levelling up event, being held at The Exchange, Centenary Square, Birmingham in July.

How far is the Midlands economy affected by links with London and how does the success of the relationship between the two regions, affect levelling up?

The Deputy Mayor for Transport, Seb Dance, has called on the Government to provide a long-term funding deal for Transport for London (TfL) to help protect jobs and contracts across the country. Trains for TfL are built in the Midlands city of Derby and there has been a warning that if TfL funding drops, this would affect the future purchase of trains and therefore jobs in the city.

Following a meeting with the Department of Transport on Friday, the Mayor of London, Sadiq Khan said:

'The Government has only given TfL another short-term extension - of just a matter of weeks - to the current emergency funding deal....if the Government continues to refuse to properly fund TfL as we desperately need, TfL will have no choice but to put our transport network into managed decline.'

The Deputy Mayor travelled to Derby last month to see the Alstom purpose-built train factory where the Class 345 trains running on the new Elizabeth line were built. Employing 6,000 people across the UK and Ireland, Alstom design and build trains at Derby, the UK’s largest train factory. Alstom is one of TfL’s leading suppliers, having also built the new Tube trains on the Circle and District line, as well as the new trains on the London Overground. TfL’s contract with Alstom to build the Elizabeth line trains supported 760 UK manufacturing jobs and 80 apprenticeships.

In Derby, Seb also visited Tidyco, an SME with around 70 employees, which is a supplier of hydraulic and pneumatic products to the UK rail industry. Tidyco is key supplier of Tube train parts to TfL, with TfL’s million-pound contracts making it a key driver in the business’ success. This is a prime example of how TfL’s supply chain stretches around the country, creating jobs, capacity and certainty for both small and large manufacturing businesses.

TfL contracts support tens of thousands of jobs outside London and contribute around £7bn to the UK economy, with 55 pence of every pound spent on London Underground investment going outside of London – indicating how essential sustained funding for TfL is to the wider UK economy. 

London’s transport network has seen modernisation this year with both the opening of the Elizabeth line and the re-opening of the Bank branch of the Northern line, and the new southbound Northern line platform and concourse at Bank station.

The Mayor has ambitions to rapidly expand the order book to suppliers across the country, such as ordering new trains and parts that will be built outside of London for Crossrail 2 and the Bakerloo line extension, and new trains for the Piccadilly, Central and Bakerloo lines, which would create more highly skilled manufacturing jobs. But to continue projects like this, TfL needs a sustainable long-term capital funding deal from government.

Although before the Coronavirus pandemic, TfL said it significantly improved its financial resilience, but due to TfL's reliance on passenger fares for the majority of its income, the effect of the pandemic on its finances has been devastating, requiring Government support to keep public transport in London operating.

In Derby, Seb Dance highlighted that TfL contracts provide ongoing work for this important East Midlands manufacturing base, and that funding uncertainty puts jobs and future contracts at risk.

The Deputy Mayor for Transport, Seb Dance, said: “Visiting the factory where the state-of-the-art Elizabeth line trains were built, and local companies where TfL contracts create hundreds of jobs, I’ve seen first-hand how strong London’s relationship with our regional suppliers is. This highlights once again how investment in TfL is vital to jobs and a UK wide recovery.

“Major infrastructure projects such as the new Elizabeth line are not just for London – they play an important part in powering the national recovery from the pandemic. Crossrail has already supported tens of thousands of jobs across the country, with more than 60 per cent of contracts for the project awarded to firms outside London and it is estimated that it will add up to £42 billion to the UK economy. This is levelling up in action – an investment that supports employment, growth and supply chains nationwide.

“This is why I am asking the Government to urgently work with us to agree a fair, long-term funding deal that will protect London’s transport network and its economic wellbeing, and that of the whole country.”

Amanda Solloway MP for Derby North said: “I am delighted that the Deputy Mayor for Transport, Seb Dance, and his colleagues from Transport for London, have seen first-hand the remarkable engineering expertise in our city. Both perfect examples of the city’s manufacturing prowess, Tidyco has been supporting the rail industry for more than 45 years while Alstom is busy fulfilling a £2bn Government order.

“Derby has a strong and proud history within the railway industry and continues to play a central role within it in the 21st century. It is for this reason that I have been actively supporting the campaign to make Derby the home of the new Great British Railways - we sit in the heart of the UK rail network and will become one of the best-connected cities in the country.

“This visit has highlighted how investment in London can benefit our county, creating and sustaining highly skilled manufacturing jobs. It has also shown Transport for London how experienced and efficient our workforce is here in Derby.”