Passengers taking the strain of transport costs

 

Passenger groups claim commuters will be paying more for a worse service.

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On Monday Ken Livingstone announced he would be dropping fares by 5% in October 2012 if elected.

And I'm told you can expect similar announcements about fares in the run-up to the mayoral election.

Immediately it means, as expected, fares are a key election battleground and places clear water between Boris Johnson and Mr Livingstone.

The mayor has said he'll stick to his formula of inflation (Retail Price Index) plus 2%; meaning at the moment an average fare rise of 7%.

He says money is needed for infrastructure investment such as Crossrail and the Tube upgrades.

It will be funded, according to Ken Livingstone, by an an operating surplus in the financial year just ended of £728m (.pdf).

However, Transport for London (TfL) was extremely quick to dismiss the idea and says the accounts are "obsolete" and the £728m itself has been spent on countering the cuts from the central government grant.

If this is the case, in an £8bn turnover operation there will be huge reserves that could be used. The question is: what else in terms of investment would go?

Is the question for voters: jam today or jam tomorrow?

Also, saying it has used the £728m fare surplus to counter the government grant, TfL is making a clear link between fare rises and the government cuts.

The commuter is paying for the cuts.

TfL said: "RPI+2% is the consequence of the cost of investment required to deliver these projects and the grant agreed with government through the CSR (Comprehensive Spending Review) to deliver them in the last CSR."

All of this is part of a wider picture of moving the burden from general taxpayer to the user.

My colleague, political editor Tim Donovan and his vast team of number crunchers, have unearthed some fascinating data from credit rating agency Fitch.

It shows how the farepayer is shouldering an ever increasing burden of the cost of public transport.

In TfL's case:

Fares as a percentage of total revenue (year ending 31 March):

  • 2006: 43.6
  • 2007: 45.4
  • 2008: 42.3
  • 2009: 54.2
  • 2010: 53.7

Also note the change in transfers and grants as a percentage of total revenue including grants in this same period:

  • 2006: 42.3
  • 2007: 40.7
  • 2008: 42.4
  • 2009: 27.5
  • 2010: 27.6

The bad news for passengers is the figures are only going one way.

 
Tom Edwards, Transport correspondent, London Article written by Tom Edwards Tom Edwards Transport correspondent, London

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Comments

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  • rate this
    -1

    Comment number 1.

    Ken Livingstone is obviously lying. There is no way that he can drastically cut fares like that. He is only saying this to try to win support, but will let everyone down if he is elected, which I hope he isn't. It is his fault for starting PPP, his fault for making false promises that the current Mayor couldn't deliver, and his fault for the lack of investment in LU during his 8 years as Mayor.

  • rate this
    0

    Comment number 2.

    Both have there faults and are as bad as each other, Ken brought in Bendy Buses and Boris has spent millions to get rid of them because he doesnt like them even though on the core sections of routes in central London they are great for hoovering up passengers, Now Boris and TFL will take £60m for the useless Greenwich Cable Car which no one will use after the Olympics

  • rate this
    +2

    Comment number 3.

    George: I like your blog but disagree with parts of your comment.

    Ken Livingstone isn't lying, yes he's trying to raise support, but remember 5% is a tiny drop. It'll be a 7p cut in the bus fare!

    Ken didn't start PPP, he opposed it and took Gordon Brown and the anti-London Labour government to court over it. Get your facts right.

    Boris that is wasting money on silly projects like cable cars.

  • rate this
    +1

    Comment number 4.

    It is clear government policy that for public transport the % of the costs met by the users should increase so the level of taxpaper support can be reduced.

    Yet these same ministers then complain about our high fares!

    In other countries the tax payer pays a greater % of costs so keeping fares low.

    Ministers say 'look at the low fares in Europe' yet the cuts in grant continue !

  • rate this
    +1

    Comment number 5.

    Tom: Good article. Would have been nice to have a bar chart illustrating those figured a little better. The other set of data that would be useful to see would be the size of TfL's payroll each year. I have to wonder how much of our fares increase is going to offset government pay reductions and how much is going to pay for the inflation busting rises that the RMT's members get each year

 

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