The organisation’s vice-chair, Louise Gittins, has written to Transport Secretary Grant Shapps calling for an urgent meeting about the situation that would also involve the organisation’s new chairman Patrick McLoughlin and chief executive Martin Tugwell.
The Department for Transport said in response that a funding settlement will be announced in "due course" and a meeting between Mr Shapps and Lord McLoughlin is planned.
A report discussed at a Transport for the North (TfN) board meeting on Tuesday said a reduced core funding settlement may result in a “downsizing programme” that could ultimately lead to compulsory redundancies. A recruitment freeze is currently in place as a result of the situation.
The organisation, which is the only statutory sub-national transport body in England, employs around 120 staff and has offices in Leeds and Manchester.
Coun Gittins, Leader of Cheshire West and Chester Council and Vice Chairman of Transport for the North, said: “The TfN Board expressed its grave concern at the continued lack of certainty with regards to its core funding.
“The board was concerned to note the implications this is having on TfN’s ability to deliver its agreed programme of work, and the consequential implications the continued uncertainty has for the health and well-being of staff.”
TfN has a legal obligation to set a funded budget by the end of March 2022.
But a report to the board meeting on Tuesday said: “TfN currently has no basis upon which to make meaningful planning assumptions that wouldn’t be likely to create significant issues within the organisation.
“As virtually all TfN expenditure is funded by Department of Transport grant, producing a meaningful business plan and associated budget in the absence of a funding settlement is not possible. Whilst every effort will be made to produce a fully worked up and robust business plan and budget for approval at March 30 board meeting, it may be necessary to produce an interim plan and budget that can then be refined in due course.”
It added: “Should TfN receive a reduced core budget allocation, there may be a need to review its corporate objectives, priorities and organisational design, and to undertake a downsizing programme which may require workforce reductions/compulsory redundancies.”
Core funding for the organisation was £6m in 2021/22, down from £10m in 2020/21.
This week’s report the Government has already indicated the mitigations which allowed TfN to manage the 40 per cent cut to its core funding allocation for this year’s budget “are no longer available”.
It added: “As a consequence, holding our core funding at the reduced 2021/22 level would result in the need for TfN to reduce its current operational expenditure by about a third.
“This would have direct consequences for TfN’s ability to undertake its programme of activity and discharge its functions on behalf of the North.”
Mr Tugwell told Tuesday’s board meeting that he hoped a three-year funding settlement could be agreed with Government to provide greater certainty for future years.
Coun Gittins said the lack of current clarity was “really quite disturbing” and warned the Government they are “playing with people’s lives” by failing to take a decision.
A DfT spokesperson said: “TfN’s funding will be announced in due course. The Secretary of State has requested an introductory meeting with Lord McLoughlin to discuss a broad range of topics.”
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