A fares freeze is the worst thing that could happen to London’s transport

London's Oyster card: this is probably going to get more expensive. Image: Getty.

At about 7:30pm on Wednesday 18 November, 1987, a cigarette end was discarded on a moving escalator at London’s King’s Cross St Pancras Underground station. The cigarette landed in a pile of grease-laden clothing and cleaning fibres that had built up under the unmodernised wooden escalator; fifteen minutes later, they burst into flames. The resulting flashover killed 31 people.

The immediate cause of the disaster was the 1980s’ relaxed attitude to public smoking. But the thing which allowed a single cigarette to create one of London’s worst ever peacetime disasters was simple: London Underground didn’t have enough money to safely maintain or modernise its network.

The disaster report, by Desmond Fennell QC, was scathing about London Underground’s management. Senior managers at London Underground and its parent, London Regional Transport, resigned. Fire regulations and practices were improved. Wooden escalators were replaced in major underground stations as a top investment priority.

The dark years

The wider cause of the disaster, though, was a stagnation that had lasted since the 1940s.

For most of the post-WWII period, London’s transport’s budget was set directly in Westminster, by national politicians – who generally took little interest in either trains or the declining metropolis. Even during the 1970-1984 period, when transport was in the hands of the ill-fated Greater London Council, it remained dependent on fluctuating grants from the Treasury.

Worse than the lack of funding over this period was its variability: you can’t plan and contract long-terms investment programmes when capital budgets are set annually. Investment set aside by a rare, generous chancellor would turn out to have been wasted when funding was slashed again next year and the schemes were cancelled.

King’s Cross brought home how badly this strategy had failed, and led to steps towards more consistent investment plans. The creation of Transport for London in 1999, under the authority of London’s newly created elected mayor and assembly, advanced this process further.

The LU to TfL handover was inauspicious, with widespread opposition to the Private-Public Partnership the Treasury had demanded as a condition. Yet the period since 1999 has seen a step change in total spending on London’s transport network and in its consistency. Even the collapse of PPP partner Metronet in 2007 was not allowed to delay upgrade funding.

This consistent investment has brought improvements in capacity, reliability and safety. Passenger numbers across the TfL network are now rising at 5 per cent a year.


The savings that don’t exist

Unfortunately, this is now under threat. If Labour’s candidate for London Mayor, Sadiq Khan, is elected, then he will prevent TfL from increasing fares over his four-year term. His team peg the cost of this at £450m in total (TfL disagree, and say it will cost £1.9bn). Khan says that he will fund by cutting costs and growing revenue without hurting services.

Some of the savings are reasonable: the current mayor has used TfL’s budget for vanity projects like the Emirates Air Line cable car and the “New Routemaster” bus. However, the cable car costs less than £5m per year, while everyone involved agrees the New Routemaster is over and TfL’s forward budget doesn’t include its cost.

The rest of the list makes less sense. It includes a “crackdown” on the £61m notional cost of fare evasion, without considering the cost of new anti-fare-evasion measures (which are seldom financially worthwhile).

It also plans to “cut in half” the money TfL spends on consultants, while merging the Underground and surface transport engineering departments to cut costs. This is bold: even when such major restructurings are successful, four years is rarely long enough for returns to outstrip costs; and doing this without hiring consultants seems even riskier.

To raise revenue, Khan plans to let TfL tender to run trains overseas. This has worked well for Deutsche Bahn and Hong Kong’s MTR, and less well for France’s SNCF. If successful, which isn’t guaranteed, it will take several years to build this business: the fare cuts mean a cash shortage now.

The other plan to generate revenue will also bring in less immediate revenue than under an alternative plan. Khan says, “Tories want a fire sale of [TfL] land to developers… under my plan, we’ll retain ownership of the land but build… homes Londoners need”. This isn’t a bad idea – but it means less cash for TfL than if the land were sold.

A return to the old days?

In short, if Khan wins the mayoral election, he’ll be stuck with a commitment to impossible savings, and the Conservative Treasury won’t bail him out. This will leave him with three options.

The first is to drop the freeze and carry on as usual. The second is to maintain the freeze, but close services or even whole lines to make the books balance. The third is to maintain the freeze, keep services intact, but skimp on everything behind the scenes and hope the cracks don’t show before the next election.

As a politician, I’d choose option three. But as a transport writer, I’d note that it’s option three that led to the events in King’s Cross 30 years ago.

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Podcast: Global Britain and local Liverpool

Liverpool. Image: Getty.

This week, two disparate segments linked by the idea of trading with the world. Well, vaguely. It’s there, but you have to squint.

First up: I make my regular visit to the Centre for Cities office for the Ask the Experts slot with head of policy Paul Swinney. This week, he teaches me why cities need businesses that export internationally to truly thrive.

After that, we’re off to Liverpool, with New Statesman politics correspondent Patrick Maguire. He tells me why the local Labour party tried to oust mayor Joe Anderson; how the city became the party’s heartlands; and how it ended up with quite so many mayors.

The episode itself is below. You can subscribe to the podcast on AcastiTunes, or RSS. Enjoy.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

Skylines is produced by Nick Hilton.

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