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TfL will reduce Tube upgrade funding gap by £2.5bn

Transport for London is set to reduce the tube upgrade funding gap by £2.5 billion after deferring work, cutting 1,000 jobs and altering engineering contracts.

According to a report in The Guardian the cost saving will be revealed at a TfL board meeting on Wednesday.

Under the new budget plan, which covers three-quarters of the tube network, £800 million will be saved by postponing improvements to 50 stations and deferring the launch more frequent services on the Bakerloo Line until 2020.

Around £1 billion will be saved by 1,000 previously announced redundancies, £500 million will be saved by renegotiated terms with suppliers and there will be a further £200 million cost reduction by increasing efficiency.

The cost savings should tackle the legacy of the failed London Underground contractor, Metronet, which left behind a potential funding gap of more than £2 billion when it collapsed two years ago.

This new budget fails to address the supposed multibillion-pound funding dispute between TfL and the last remaining PPP contractor, Tube Lines - responsible for the Northern, Piccadilly and Jubilee lines.

Tube Lines and TfL are haggling over the cost of a maintenance programme from 2010-17 that includes an upgrade of the Piccadilly line. TfL argues that the work should cost £4.1 billion, while Tube Lines has put an initial estimate of £7.2 billion on the programme.