Stephen Greenhalgh is the Deputy Mayor for Policing and Crime and is seeking the nomination to stand as the Conservative candidate for Mayor of London in May next year.
One of the great success stories of the last seven years has been the long-overdue investment into London’s public transport system. Boris got the necessary backing for Crossrail, has expanded suburban rail and even reinvented the Routemaster bus. There has also been huge investment in the underground, with new rolling stock for key lines and upgrades across the network. All of this required tough decisions, like closing ticket offices and the annual increases in fares.
We are now in a position not just to press on with vital investment, but to undertake a series of reforms so we can start cutting fares, not raising them. I want London to have the best public transport in the world. At the moment, however, we also have the most expensive.
Notwithstanding the different pricing models in other cities, the plain fact is that London has higher fares than New York, Paris or Tokyo.
That is why, if I become Mayor of London, I have pledged to cut London’s Travelcard, rail and tube fares by three per cent every year. Ordinary Londoners, particularly those who keep the city running – like nurses, teachers and shift workers — should not have to pay more as they strive to get to work.
This policy means people would pay 55p less each time they get on the tube in Zone 1 and £14 less for a monthly Zone 1-2 Travelcard by the end of my first term. Compared to current RPI+1% rises, the savings increase to £1.14 and £30 respectively, with a Zone 1-3 commuter saving a total of £905 over the four-year period.
Now, I realise that many people will be sceptical about whether this can be done. They were sceptical when I said I could cut the Metropolitan Police budget by 20 per cent, while increasing officer numbers and cutting crime. As Deputy Mayor, I have done it. And they were sceptical back in 2006, when I said I could cut a London borough’s Council Tax. As leader of Hammersmith and Fulham Council, I did it five times in six years. I know how to deliver savings while improving services.
I also know that it involves listening to those who have first-hand experience of the organisations and services involved, like TfL board members and former transport ministers. They think it can be done too. They are even prepared to say so publicly, as you can see in this video:
Delivering a three per cent cut in fares, each year, means finding £90 million of ongoing savings from an organisation that spends and invests billions. To give just one example of its scale, TfL is the largest landowner in London with total holdings of around 5,700 acres, which is greater than the size of some boroughs. It has over 500 major sites awaiting redevelopment across the capital and hundreds of smaller sites in individual boroughs alone.
Putting it simply, there are three R’s that can deliver the change we need:
REDUCE overheads, with a 25% reduction in non-operating costs and far smarter procurement.
RELEASE assets that are not needed to deliver the service and sweat the retained, core assets.
REFORM operating models, including contracts and rolling out new technology more quickly.
Buses are good example of how models can change to provide a better service at lower cost. Under Ken Livingstone, bus subsidies rose from a relatively low level to a staggering £800 million a year. Thanks to Boris, this subsidy has been halved to £400 million, while retaining the same quality of service. We can now reduce this subsidy level further by changing the way bus routes and bus contracts work.
There are a lot of empty buses trundling around London at times when there is little passenger demand, yet buses are often overcrowded in peak hours, or when people are coming back from a night out. Infuriatingly, it is often exactly when someone is trying to get to work that their bus loiters at the side of the road to “regulate the service”. This does not need to happen if we change the model.
Right now, the most profitable service for an operator is an empty one. Bus operators are rewarded for their regularity, but have no incentive to pick up any passengers, because they don’t keep a share of their fares. Passengers actually cost operators time and fuel. I would switch the network to net-cost contracts, allowing operators to bid for routes and rewarding both passenger growth and faster arrival times.
As part of this switch, TfL should use its Oyster data to rebalance the schedules so there are more buses in the times and places they are needed. A better, 24/7 service will help to reduce the financial burden on London’s commuters. London’s economy depends on our public transport system. It’s essential to continue improvements to the network and expand capacity, building on the great work under our present Mayor. Boris has also laid the foundations for helping Londoners who spend a large proportion of their income getting to work, which could start to restrict employment opportunities and economic growth.
The challenge for a future Mayor is to make London less expensive and the most practical way that a Mayor can achieve this is by cutting fares. Thankfully, this is not a zero-sum game. We can improve services while cutting their cost – I know, because I have done it before.