Fare rises threat as Tube faces a £1.7bn shortfall
Katharine Barney and Dick Murray10.07.09
Passengers face massive hikes in fares and cuts in services on the Tube and London buses.
The recession has left transport bosses facing a £1.7billion funding gap, according to a report from the London Assembly.
And Boris Johnson may have to introduce well above inflation price increases or cancel much-need improvements on the Tube to meet the shortfall.
The report says fewer people use public transport, especially the Tube, during recessions as workers lose jobs.
Negative inflation means there will be an initial drop in fares near July which will also affect TfL's income.
The assembly's budget and performance committee estimates the loss of income could range from £400million to as much as £1.7billion by 2018.
It said a range of actions would be needed including cutting services, raising fares or deferring or cancelling planned upgrades and expansions. Two new stations on the East London line could be under threat along with a reduction in the number of night buses.
The project to find a way of cooling the Tube during the summer could also be delayed and the scheme to lay miles of new track on the Victoria, Metropolitan and District lines by 2011 may be scrapped.
And even the project for the new Routemaster bus has been thrown into doubt along with plans to install step-free access at stations in time for 2012.
The funding crisis adds to the problem of a £2billion shortfall involving Tube Lines, the private sector consortium responsible for the Jubilee, Piccadilly and Northern lines and the £2.4billion worth of cuts already ordered by the Mayor.
The committee estimates the total fares shortfall will be between £3.2billion and £3.5billion but any gap will be partially offset by lower inflation cost for the transport network's construction programme with savings of £1.8billion to £2.8billion. Mr Johnson has said he will not change the formula of retail price inflation plus one per cent so negative inflation this month will lead to fares being frozen or reduced.
TfL today tried to play down the crisis saying the scale of cuts is not yet known.
Steve Allen, TfL's managing director for finance, said: "We do not recognise the assembly's range of numbers.
"We continue to seek further savings and efficiences over and above the £2.4billion we are already delivering."
The assembly report states: "Finding further savings that do not impact on the services to London will be difficult."
John Biggs, chairman of the committee, said: "Depending on the severity of the recession, the next few years will be very challenging. Londoners need to know what the options are, especially since they will have to bear the burden of any increase."
Reader views (36)
It would be perfectly possible for TfL to balance their budget without increasing fares if Boris would simply order them to stop spending millions and millions of punds, via the Borough, on never ending wildly extravagent anti car schemes.
TfL remains a highly politicised, in a left wing way, organisation that, despite a Tory Mayor, is still dedicated to spending our money on various manifestations of the politics of envy masquerading as a thought through transport policy.
Come on Boris, get a grip and clear out the Augean stables at TfL!
- Matt, London, UK
All that people who wrote before me: you are Londoners, so, you also have the right to complain about public transports, but you have never meet the Italian one! Buses are never on time, fees are very expensives (I have to spend about 7 euros to reach Palermo that is at about ten Km from my town)and we always prefere to take the car, because when you use public trasnport, you'll never know when you'll arrive....Please,love what you have!!! you are very lucky. I've been in London and i've never seen a public transport as good as yours... W LONDON FOREVER
- Daniela, , Ficarazzi Italy
WHY DO PEOPLE USE THIS AWFUL DISGUSTING MEANS OF TRANSPORT IT IS FILTHY DIRTY NOTHING SHORT OF A CATTLE TRUCK AND THEY CALL IT A TRAIN SERVICE,AS THEY SAY FOOLS AND THIER MONEY EASILY PARTED.
- Sara, london
If you want to reduce Traffic in London, if you want to improve the Tube, if you want to stop people commuting by Car then you have to move the jobs out of London to where people actually live. So the solution is to offer Firms Tax Incentives to move out of London. That would solve much of your Transport, Global Warming. Tube Crowding ect in one go.
The Congestion Charge is Probably a 'pot' = to the MP's Expenses !
As for funding, one asks the question where does al the Current money go ?.....bet you could have no increases if you stopped the Banker type wages, Bonus's and Commissions and went through every contract with a fine toothcomb and expense claim !.
- Clif, London
The buses have improved beyond recognition. They are reliable and still cheap using the oyster. In fact still the roughly same price of over 15 yrs ago (70p £1 then).
TFL have taken over the Silverlink franchise and we have the start of an orbital railway - allbeit over crowded and unreliable now - there are more trains per hour and safer stations.
Still with new trains and track work next year - should be much better. (The service is cheap as it accepts oyster)
London is unique in Europe for having so many commuters and such an ancient system. In recent years with new arrivals its under more stress.
LT has its work cut out its got to rennovate a tube system that was built on the cheap by private investors, and has not been touched for 40yrs! The cheapest solution of using power from the track to save tunnel size - means we cannot have air conditioning and also is dangerous.
The fares are so high to encourage you to use Oyster and hence do away with staff at ticket offices.
Boris' idea to scrap bendies and design and devlop a new routemaster will cost v.much more and will not be able to achieve same passenger numbers as bendies.
The real Scandel is the Jubilee line originally planned for SE london it was diverted to help Canary Wharf. The Extension was Bodged and hence the weekend closures on a line that is barely 10yrs old in places.
- Bob, wandsworth, london
For all of you who complain about London's public transport and its cost, you should try living in the southwest.
At peak times, the buses where I live run hourly to the town where I work. The bus company is maximising profit by running buses together at the same hour. After the peak period, they run every 30 minutes.
Fares work out at 1 gbp per kilometre. A Day ticket costs 7 gbp. It's slightly less off-peak. There's no oyster or electronic card. People take ages getting on and off, usually as they have no idea where buses go or how much it costs. A journey of 10km can take an hour as the bus will spend half its time at stops. There are hardly any bus lanes or priorities.
There are little or no rail options. If a bus doesn't turn up, it's a 2 hour walk or 20 gbp taxi fare. Most last buses leave at 22:45 so you have to build-in the cost of a taxi to most nights out.
As a former SW Londoner, I've seen unbelievable improvements in London's transport over the past 2 decades. Areas where I used to live had sparse bus and rail services. Now buses run every few minutes on several new routes, including some that run 24 hours. Add to that, better rail and a 'new' tram service.
Yes, the next spare day you have, come to the southwest and try travelling by public transport. Then you'll appreciate what you have.
- Anil, south glos
Mark Lee - do you actually believe Transport for London figures? Those I've seen are 'estimates' and I'm not imprssed by their track record. They claimed a massive 'estimated accident reduction' of 33% because of the congestion charge, when the zone only covered 1% of the capital and I think 7% of traffic. No substantiation was given.
The Congestion Charge revenue was hyped so much that central government docked London £200 million on the strength of it.
The extension zone profit is thought to be something approaching £15 million p.a. - and that is before recent events.
- Brian, London
Steve Doggett do you work for London Transport?
- Ls, Twickenham
Where does all the money raised by the congestion charge go? There have virtually no improvements to our transport system for many years despite very high fares, the congestion charge and high council taxes.
- David Summers, London
As Mark Lee says, scrap the ridiculous plans to replace the bendy buses. They're all new and work very reliably, why bother wasting money replacing them for no reason. They should also expand the congestion zone and start charging a lot more to enter it. Stopping cars coming into the centre of London needlessly would empty the roads and make public transport more reliable. Charge £20 a day for a car and more for tourist buses and lorries and they can start plugging some of the funding gap.
- Steve Doggett, London
Well,just wait for the Olympics when transport is free thanks to the wisdom of that idiot Livingston.No increase for tube or buss staff and a 25% reduction for the so called management of this poor service provider.We the public have not had an increase in our wages so where do they think we will get the money to pay even more than we have to at this time.
- Dave, london
What the Ken haters seem to forget is that he had several new policies which would have seen a steep RISE in revenues for TfL and therefore could have been spent on tube improvements. These include, the CO2 charge, the London Low Emmission zone, whcih would have charged those who pollute the most more. Boris did away with these and decided to WASTE millions to try and bring back the routemaster. Lovely idea, but the guy needs to sort his priorities. Ken would have done more for Londoners in this recession (being that he starts from a left-wing perspective) and would have taxed the rich more to pay for it. That's waht we need during a reccession, someone who will rock the boat, not some tv quiz bufoon!
- Terry, Shepherds Bush
Fewer people are travelling during the recession, because more are unemployed. This reduces income. It should not reduce expenditure. Rather, the service should be improved now, so it works well when the recovery comes. It should be possible to get better prices from contractors now, when they really do need the work.
There is one thing that they should cut back on - cosmetic station refurbishments. Tired old tiles and stained paintwork should be put firmly last in the queue, until after the new lines are built and the trains on the old lines are running reliably. Track, signals, trains are what matters. Far too much money has been spent on "cosmetic surgery" already (mostly by Metronet, because it was a cheap way to create the illusion that they were doing something other than ripping us off).
- Nigel, London
Fare increases!? It costs a fortune already and the tubes are rubbish. Although much more pleasant than the filthy Paris R & metro. Right size the staff - I swear there are 100's of them standing around (not that I begrudge that at night when its scary!)
Spend the money, get them upgraded. Cars in central London are a nightmare for walkers and cyclists so congestion-charge them out of existence, (using the brief but substantial revenue stream to offset tube capital costs), charge the hell out of the taxis too - I mean if you cant walk a few hundred yards or take a tube move into a nursing home far away from London!
The benefit of the tube is far more than the revenue it collects, imagine if us millions turned to cars or buses - what streat level quality of life would we all have then?
- Steve, London, England
lets see now7 pounds for a journey into London from outer zones
New york 2.25 dollars for the same journey
about time London grasped the fact that the transport service is over priced , dirty and unpleasant
- Robbie, London
Fare Rises?????? its already £4 just to go one stop!!!!! it was much much cheaper before labour got in. This is disgusting. We have the most expensive public transport system on the planet and now its going to get more expensive.
- Andre, sidcup
"It said a range of actions would be needed including cutting services, raising fares or deferring or cancelling planned upgrades and expansions. Two new stations on the East London line could be under threat along with a reduction in the number of night buses."
I'm somewhat confused by this paragraph, which appears to state (or at least strongly imply) that the report has identified night buses and the East London line as areas for cuts. I use night buses a lot, and would be quite concerned about this - so I actually went to the report to work out what was said. As far as I can tell, there's no mention of either service. What the report says is that actions will be needed to plug the funding gap including potentially "deferring or cancelling planned upgrades and expansions".
This is a serious issue which affects the vast majority of Londoners and deserves better reporting than this.
- Sidney, London
TfL = Theft from Londoners...
- James, Spain
Hence, tube workers and management should not be given over inflated pay rises.
- David, London
Sad to see the usual batch number of comments complaining about the high prices already. Do some of the readers not grasp the issue here? We are going to have to cut back a lot of services just to keep our heads above the water if we keep fares the way they are, let alone cut them.
People always complain about prices; I pay £3.20 return to get to work, using my Oyster (£1.60 each way). That compares quite favourably with quite a few western European cities, with €2.10 (£1.78) each way in Berlin, and 20 SEK (£1.56) in Stockholm.
I travel on the Victoria and Central lines, neither of which are famed for their reliability and to be honest, and to be honest I still have pretty reliable journey times.
The roots of this can demonstrably lie in mayor Johnston's policies. TfL will lost £70 million a year as a result of the abolition of the Western Extension, which, in the 8 years from abolition in 2010 to 2018, could have plugged £560m of the funding gap. The replacement of bendy buses is resulting in huge extra costs in staffing and vehicle maintenance, resulting in an estimated £60m in extra costs per annum for all the routes - totalling approx £400m up to 2018.
Scrapping just these two policies would save almost £1bn up to 2018 - and plug a significant part of the gap.
- Mark Lee, Vauxhall
Unbelievable! They will be even worse off cause no-one will be able to afford public transport! Scooter shop here I come!
- Annoyed, London
Sarah of London. Haven't you heard of 'global warming', and actually many people drive to work because public transport is too expensive, not that they use public transport because it is reliable and cheap! not because they 'cannot' afford a car, which you so arrogantly put, a car really should not be necessary in a city like London. Public transport should not be privatized and profit making, it should be reliable and inexpensive, as it is in the rest of europe. And by the way, I think Londoners work hard enough, you much be from the Banking world you sound very selfish and arrogant / ignorant!
- Lynda, London
Public transport has always been priced at a level to control usage. - Adam, Harrow, UK
What utter rubbish! Your comment is obviously based on something you have made-up in your head. Public transport is actually priced to cover the cost of running it and to also to make a profit. This profit is then supposed to be used for reinvestment. Unfortunately as everything has been privatised these companies are more interested in profits for themselves. They then crawl back to the government who give them tax payer’s money to help them out. So we end up paying twice. All this because the links between government and businesses are so entwined and corrupt that our politicians would rather line some top executive’s pockets than bother improving our vital transport system.
- Paul, London
I think this has more to do with the result of the Metronet disaster, Ken Livingstone and the RMT than the congestion charge. - Jim, the commercial model for the congestion charge was flawed from the start. The capital costs were very, very high as was the "service" charge to Capita. The "profit" for the system relied on penalty charges. Paul B, the PPP was a Labour party acountancy trick to keep big projects off the UK's balance sheet. Designed by Gordon Brown (Lab) and Blair (Lab) and yes, imposed on Ken (Lab).
- Jeremy E, Home Counties
When will Boris and co get the message - we, the travelling public are being priced off of public transport. Soon no one will be able to afford to travel anywhere, the French have got their transport policy right, why can't we follow suit?. This current madness can't go on.
- Mark Burton, St Ives. Cambs
Jim, the Kengestion charge extension revenue would only be a tiny drop in the ocean compared with £1.7Bn. And the extension is unfair and unpopular with Londoners who have to suffer its consequences - aggravated congestion AND higher bills from visiting tradesmen.
London contributes more than its fair share to UK GDP, so Boris should ask for more of our money back. Aided by the votes of London Labour MPs, Gordon Brown has given an extra Billion pounds a year to the EU - that money should have been invested in our capital.
- Jools, London
When doesn't the good British public not pay through the nose for everything! This is just rip off Britain. Go anywhere in Europe and the price of tubes, buses and trains are rediculously cheap (and reliable) compared to ours.
- Sue, Orpington, Kent
Sarah.. what world are you living in? Ha.. I'm just hoping for the sake of London that you are being ironic. This is only down to Boris Johnson's pro car/ pro pollution agenda for London, this and the 100Million Pretend Routemaster.. roll on the next Mayoral Election.. the honeymoon period is officially over.
- Adam, Soho London
The PPP chicken is finally coming home to roost, yet still the mandarins of the dying New Labour government and the Tory 'opposition' (sic) STILL insist that private is the way forward ?
Private management of public services isn't and never will be anything other than a means to take increasing amounts of revenue for a decrease quality and quantity of service in return.
When these half brained politicians accept this now indubitable fact, then perhaps the country can move forward again
- John, Twickennham
Public transport has always been priced at a level to control usage. Set it too low and too many people use it and overcrowding rises and it can't cope. Set it too high and revenues fall along with passenger numbers.
- Adam, Harrow, UK
Compared to EU metro (Berlin, Prague,Stockholm... ): it's expensive, it's old, it's dangerous, it's overcrowded, it's oven, it's not reliable....We should demolish that monster and start again and this time let's think. Shame we can't do it.
- Victor, London
London Underground should take on the status of a Bank, therefore would be nationalised. All required work would be undertaken so that the Olympics can be showcased to the World in 2012.
- William, Hay~Heath UK
This comes as no surprise - Mayor Boris Johnson's cancelling of the congestion charge extension has left him with a massive hole in his transport budget.
Amusing to hear that the 'Routemaster' project will probably be shelved - it always was a complete load of nonsense anyway. Johnson had to pretend he was interested as it was an election pledge.
For all those who complained about Livingstone - just wait to see how bad it gets as the blonde buffoon kills all investment in public transport as London prepares for the 2012 Olympics.
- Jim, London, UK
Sarah, please refer to the history books. PPP was forced on Ken Livingston ( who was very opposed to it ) by Tony Blair. All tube users are going to have to pay for Tony's PPP disaster.
- Paul B, London
This is all Ken Livingstone's fault with his preposterous anti-car propaganda which has resulted in too many people using the Tube so now it is falling apart and dangerous to use. If people are unhappy having to pay more for public transport under Boris, work a bit harder so you can afford a car.
- Sarah, London
The report says fewer people use public transport?
Because of the cost and now even less will use it LOL. So as they price people off public transport the cost will keep rising, good plan. Why we cant have one set price for any tube journey is beyond me, in france you can buy a book of tickets to use for any lenght of journey at any time works like a dream.
- Gary, Brentwood
Afternoon:
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