MSE News: London tube and bus fares to rise

Premier_2

Some interesting financial figures were being banded about yesterday on the TV over this fiasco.

As I previously posted, BJ alleged last year there was a £80m black hole in TfL accounts he inherited from the previous administration (hence why fares rose 6% last year)

Yesterday, the blackhole in BJ's finances was apparently £1.7bn, of which his own tansport advisor, Kulveer Ranger, apportions £0.5bn to the failure of the Metrolink/PPI plan. How did that rise from £80m to £500m???

Whatever the reason, that £0.5bn has already been covered by declared savings of that amount every year for the next 10 years! That's a whopping £5bn saving over 10 years. Hmmm... remind me, why are prices increasing? Oh yeah, beacuise of a £1.7bn shortfall ... which includes £0.5bn which they say they have already saved.

Kulveer Ranger also suggested in one interview that the cost of developing a new RouteMaster would be about £1m this year and possibly another £1m each year over the next 2 years. But how much in total? You wont get a new RouteMaster for anything like £3m.

Finally, it was stated that if BJ had got his sums right this year, then fares will not increase by more than RPI plus 2% in the years to come ... but he couldn't commit to having got his sums right this year either.

Whilst Boris still tries to do some "jiggery pokery" (his words) of his own, I wonder if Ken reads MSE? He seems to have answered some of the questions I posed yesterday in this thread.

But former mayor Ken Livingstone said: "Johnson has blamed his second year of inflation busting fare increases on 'past mistakes' and the 'current economic climate'. That is patently untrue.

"They are the result of his own policies.

"His plan to abolish the western extension of the congestion charge to Kensington will cost £50m-70m a year.

"His decision to scrap the £25 charge on the worst polluting gas guzzlers, like Chelsea tractors, has cost another £50m a year.

"He is throwing away millions of pounds a year more with his stupid plan to get rid of bendy buses and turn the clock back with a costly new Routemaster bus."

http://news.bbc.co.uk/1/hi/england/london/8307698.stm


Ignore the bit in that report about a final decision still to be made on the abolition of the western extention to the congestion zone:

TfL said that Mr Johnson was still "minded" to scrap the western extension to the congestion charge zone and that he would be making a final decision next spring.

According to BJ's own blog, that decision has been made. It's going (according to BJ).

The axe will fall on the Western Extension Zone
You may have heard the scurrilous rumour that I have reneged on my promise to remove the Western Extension of the congestion charge.
I am blogging about this now to tell you that is emphatically not true.
When I was elected, I promised to give Londoners the consultation they never got. Londoners expressed the overwhelming view that it should be removed, and I promised to honour that judgement. I maintain that promise today, and to make it absolutely crystal clear; we will be removing the Western Extension next year.
We have to jump through a number of tedious bureaucratic hoops before the axe can fall, but fall it will. The extended zone will be no more. It will be an ex-zone, the area formerly known as. It will be a dead zone!

http://www.boris-johnson.com/2009/09/23/congestion-charge-extension-to-be-removed/

RichyRich

movilogo wrote: »

What is the source of this info?

Anyway, I don't have children but I pay for schools via council tax in my local town. I think those whose children go to schools should pay for fees directly. In same way, Firebrigade should be paid by only whose houses are on fire, isn't it?

The Transport Act 1985 effectively deregulated local bus services in all parts of England, Wales, and Scotland apart from in Greater London. Outside of London, operators are free to set their routes, timetables, schedules, and fares at a commercial rate, i.e. a rate that covers the cost of operation, investment in new vehicles and, of course, profit. Clearly, this might mean that some areas are excluded from the bus network. This happens most often in rural areas where the population is sparse, and the bus company would make a loss operating here. In these circumstances, the Transport Act 2000 places a positive obligation on local authorities to identify whether enough "social value" exists attached to a bus service to secure it, in which case they must put out an invitation to tender. The service will be awarded to the company with the lowest tender price, and all revenue taken aboard the service belongs to the local authority and not the bus company.

In London, the flat fare of £1 (or £1.20) is far lower than fares in the majority of England. It has little to do with the costs of operation, because all services are in effect tendered services - TfL pays bus companies to operate routes, and all revenue taken aboard those routes belongs to TfL and not the bus company. At the end of the year, TfL counts up the fares taken on buses and the money it has paid out to operators and hopefully the former is greater than the latter.

Whether buses should be seen as a public service or merely a service used by the public is, of course, a political one. Council Tax is used to fund a variety of services that residents (and, indeed, in some cases, non-residents) may choose or choose not to use, such as refuse collection and the maintenance of parks and gardens. Public Transport is not, however, analagous to Education or Fire and Rescue. Education is compulsory for children under a certain age, and you don't have much choice as to whether to use the Fire and Rescue service or not. You do have a choice whether to use public transport, rather than walk or drive, etc., and surely it is far more fair that it is paid for by the people who choose to use it than by everyone.

Sol00

flyingscotno1 wrote: »

Define 'large amount' and 'newish'. They are crapped out (ex-London!) buses on the major route near me.

I haven't never seen any 'ex-London' buses in Glasgow. The older buses were owned by publicly owned Strathclyde Buses and sold to First when they took over in 1996.

Do you live in the Dumbartonshire area? I have a friend who works at First who complains that they have all the 1995/96 buses, compared to the city.

henmania

These fare increases are grossly unfair for people on low incomes - if everyone under the age of 60 had to pay fares in the first place, they could be reasonable for everyone and perhaps actually having to pay a fare might encourage better behaviour on public transport.

Sol00

henmania wrote: »

These fare increases are grossly unfair for people on low incomes - if everyone under the age of 60 had to pay fares in the first place, they could be reasonable for everyone and perhaps actually having to pay a fare might encourage better behaviour on public transport.

Does everyone under 60 not pay a fair anyway?

I don't think that by having to pay a fair would improve anyone's behaviour.

flyingscotno1

Sol00 wrote: »

I haven't never seen any 'ex-London' buses in Glasgow. The older buses were owned by publicly owned Strathclyde Buses and sold to First when they took over in 1996.

Do you live in the Dumbartonshire area? I have a friend who works at First who complains that they have all the 1995/96 buses, compared to the city.

If you haven't seen any ex-London buses you haven't been looking hard enough! They are the modern looking ones, crawling about because they are wrecked. Seriously the drivers all hate the ex-London stuff- think the constant stop start hard driving down there takes it's toll and they aren't kept in top nick here.

Dumbartonshire isn't where I am but that area has ex London single deck buses - they are getting more modern vehicles because someone else had the cheek to stand up to their terrible buses and run newer ones. The bendy buses on the 9 were initially in Bristol (some started in Glasgow too) before being run on the 207 in London then were sent up here. Equally all the double decks with the staircase akwardly in the centre are ex-London and the stairs are there because that is where the exit door is. Parkhead and Cumbernauld garages have a lot of them, and a lot of drivers who don't like them! First apparently is zoning the day ticket in Glasgow so it could be £4 a day. :eek: I'm sure it was £1.50 only 5 years ago! See my comment on Lothian.

RichyRich wrote: »

Whether buses should be seen as a public service or merely a service used by the public is, of course, a political one. You do have a choice whether to use public transport, rather than walk or drive, etc., and surely it is far more fair that it is paid for by the people who choose to use it than by everyone.

I'd agree with that to a point, but that assumes that people do have the option to make other journey choices. Do students/people going for a drink/low income/tourists/young people/elderly have an affordable choice? Is it fair the private sector could price them out of making journeys? Equally can a government be environmentally friendly when in the name of competition 2 bus companies run buses 2 mins apart half empty-worsening pollution- yet punish them if they colluded to run with same fares and 15 mins apart? Is it sensible I need several different tickets to travel across town. The fact is that the people that use buses now, are not paying for use and getting rest invested in service, they are paying for shareholders. I think buses could be run well by private companies but their needs an element of control and we do not have that. Similarly in 1980's busy city centre routes used to 'cross subsidise' quiet but essential sub-urban or rural links. In private days those quiet routes get dumped, forcing the council to shell out your money again on keeping them going, whilst the private company keeps all the profit from the essential services.

In my view all metropolitan areas should have buses where the routes are competitively contracted, and the local authorities take fare box income to cover the costs and make any profit for transport.

In any case your council tax does go to transport. All bus infrastructure, bus lanes, bus stops, shelters are all paid out of transport budget. The advertising in shelters makes a bit back but the private companies keep income bar tax they pay and don't shell out for that. Equally every concession ticket sold is paid for by tax- I call it indirect subsidy!

If you want an example of how to run a bus service look at Lothian in Edinburgh- still owned by the councils, newest fleet in Scotland and £1.20 single. The councils demand a low dividend for transport related projects, the rest goes straight back to new buses. We meanwhile get ripped off in Glasgow to pay for shareholders of First, and occasionally get new buses topped up with stuff that has 7 years of London behind it- fabulous!

henmania

Sol00 wrote: »

Does everyone under 60 not pay a fair anyway?
No

I don't think that by having to pay a fair would improve anyone's behaviour.
Behaviour on London transport deteriorated significantly after the introduction of free travel by Red Ken so have to disagree.

RichyRich

Lothian Buses runs at a loss. I have no objection to local authorities taking control of bus service IFF it can be conclusively demonstrated that local authorities are the best judges of the needs of the transport patterns of the people.

I grew up in Bradford, so perhaps I am more cynical than some about local councils' ability to accurately predict what people want and need (Google "Bradford Odeon Rescue Group" for more info). The private sector has to model customer behaviour effectively, else risk losing profitability. If the council fails to effectively predict what passengers want, it will lose fare box revenue (assuming we operate under a model where revenue is retained by the council) but there is less need to do something about it - they can just "top it up" with council tax, innit.

Of course the private sector cannot have an interest in operating loss making routes (and competition law makes cross-subsidisation unlawful), but if it is possible to run at a profit they would prefer to operate it commercially than a tendered service. This admittedly takes the profit away from the local authority, but it takes away the risk, too.

Concessionary fares are paid for by taxes (local and national), but only because the Government has decreed that people in certain groups should be able to travel by bus for free. Operators do not get 100% of the revenue foregone, though. Even if buses were nationalised, the free travel (if desirable) would still have to be paid for somehow.

flyingscotno1

RichyRich wrote: »

Lothian Buses runs at a loss. I have no objection to local authorities taking control of bus service IFF it can be conclusively demonstrated that local authorities are the best judges of the needs of the transport patterns of the people.

I grew up in Bradford, so perhaps I am more cynical than some about local councils' ability to accurately predict what people want and need (Google "Bradford Odeon Rescue Group" for more info). The private sector has to model customer behaviour effectively, else risk losing profitability. If the council fails to effectively predict what passengers want, it will lose fare box revenue (assuming we operate under a model where revenue is retained by the council) but there is less need to do something about it - they can just "top it up" with council tax, innit.

Of course the private sector cannot have an interest in operating loss making routes (and competition law makes cross-subsidisation unlawful), but if it is possible to run at a profit they would prefer to operate it commercially than a tendered service. This admittedly takes the profit away from the local authority, but it takes away the risk, too.

Concessionary fares are paid for by taxes (local and national), but only because the Government has decreed that people in certain groups should be able to travel by bus for free. Operators do not get 100% of the revenue foregone, though. Even if buses were nationalised, the free travel (if desirable) would still have to be paid for somehow.

Lothian Buses does not normally run at a loss. It runs at a loss this year because of significant investment but mainly because of the tram works in Edinburgh. The tram works have seen bus journeys made longer, more vehicles to keep the same schedule and a reduction in shoppers travelling into the centre. That is a short term measure. I actually think Lothian are probably the best bus company in the U.K and certainly the best run. One criticism is that they stop when there are people waiting but not for that bus it would be better- speed wise.

The council receives a dividend from Lothian every year so it aims for profit and that is how it should be done- the network should be run commercial in a sort of 'not for profit way'- ie all money resulting from bus network is returned into local bus network. Sadly we do not have that and we have a disjointed system. Cross subsidy is illegal in the private network, but then when a total public network is run- that problem decreases somewhat- if the 3 makes £5k but the 3a loses £1K then it is absorbed in total income.

Equally the public sector has far more interest in developing routes. Private companies are notorious for not wanting risk nor wanting to run break even routes. They chop and change routes with little consistency, which undermines passenger confidence. We have routes here where the local authority had to offer money to start running it as no company would do it. Once running it was so rammed it had to be doubled in frequency. Equally we lost our local route to the shopping centre- it broke even, but sadly as there were other commercial services on the route but not linking the area to the shopping centre we couldn't get a subsidised service despite the councillors lobbying for it.

I cannot say that anyone bar bus company shareholders can really believe that the private sector is offering the best service and that the private sector is meeting the needs of the public. It is meeting the needs of the bottom line first, passengers second- no way to be if we are at all serious about reducing private vehicle usage.