I think it’s time for Mayor Boris Johnson to scrap his latest fares hike after a new report from my office found that 76% of Londoners now believe fares are “too high”. The report, ‘The case for a Fare Freeze’ found that the 40% increase in fares under Boris Johnson has left many Londoners struggling to cope with the cost of commuting. The Mayor should use expected TfL underspends and additional income to reverse this year’s 2.5% fare increase and freeze fares at 2014 levels.
Londoners are returning to work after the holiday season face an average 2.5% increase in their commuting costs. After seven years of increases under Boris Johnson and with fare growth outstripping wages, the Mayor would be failing Londoners who are struggling to cope with the cost of commuting if he did not reverse the rise and cap fares at 2014 levels. The move could be funded by utilising £98m of the £309m in better-than-expected fare income and TfL underspends estimated to be accumulated in 2015/16. In the Mayor’s first five budgets, TfL underestimated fares income and overestimated operating costs; expenditure was £1,069m (3.69%) less than expected and income from fares £235m (1.36%) more than expected. Assuming this trend continues there would be more than enough unallocated funding in 2015/16 to freeze fares at 2014 levels.
Freezing Fares at 2014 levels would cost TfL £98 million in forgone revenue. This could be paid for by utilising £98m of the £309m expected to accumulate from better-than-expected fares income and TfL underspends in 2015/16. TfL consistently overestimates its operating expenditure and underestimates its income from fares. In the Mayor’s first five budgets, expenditure has been £1,069m (3.69%) less than expected & income from fares has been £235m (1.36%) more than expected. On this basis we calculate that TfL will underspend by up to 246m this year with additional fares income of up to £63m. This would leave up to £309m which could be used to pay for a year-long fare freeze that will help Londoners, particularly those on lower incomes, make ends meet in 2015, without hitting its capital expenditure or reserves.
A survey of 1,219 Londoners carried out for the report found that 76% of Londoners now think the cost of travel in the capital is too high. Whilst money is tight, I do not believe the answer is to take more from Londoners’ pockets – especially when TfL is expected to be sitting on millions in underspends and additional fares income.
Since 2008, when the current Mayor came to power, tube passengers have seen fares rise by 37%; bus passengers by 47%. On average fares are up 40% since 2008.
In 2016 London will elect a new Mayor who will have the opportunity to map out a four year plan for their fares strategy for their term of office. Until then a fares freeze this year would give Londoners some much needed respite from rising travel costs without harming the network’s upgrade and expansion plans.
The full report, The case for a Fares Freeze, is available here.