Richard Tracey: Slash over-generous perks and pensions to cut fares further for years to come

Posted Posted by in Opinion   shareShare2013
Dec
3

Richard-opinion

A real terms public transport fares freeze in January is very welcome news; lower tube and bus fares not only benefit passengers but the growth of the city overall. However by further addressing waste and improving efficiency across the organisation, TfL could continue to freeze fares at inflation in future years.

TfL is a behemoth of an organisation with an annual turnover just shy of £10bn and a capital investment programme running into the tens of billions. Yet when defending fare rises, transport bosses shout from the rooftops about the damaging effect of not putting up fares by more than inflation. Freezing fares at inflation for one year costs TfL £34 million in lost revenue. Freezing fares indefinitely clearly quickly multiplies this cost, but even so, it doesn’t seem like an impossible amount to find given the size of TfL’s budget. The tricky part is finding this money without harming TfL’s vast investment programme.

An organisation employing as many staff as TfL is bound to have significant employee overheads. However, TfL’s pension costs are astronomical. Part of the reason for this is that their staff, supported by the Unions, still cling on to unaffordable gold plated pensions at a time when the rest of the public sector is cutting back. Unlike other parts of local government, TfL has no plan to make changes to their over-generous final salary pension scheme. Bringing TfL’s employer pension contributions in line with the average paid by local government could have saved £144 million in 2011 alone.

Thanks to constant pressure from my London Assembly colleagues, TfL have committed to introducing driverless train technology on the underground and will buy no more trains that require a traditional driver. However, money could be saved now, with savings passed onto the fare payer by accelerating this programme. A tube driver recruitment freeze on the Jubilee, Victoria and Central lines by fast tracking driverless trains would bear down on the massive £141 million annual wage bill. Another area where significant savings can be made without hurting investment is by scrapping the free travel passes gifted to friends, family or lodgers of TfL staff. This out-dated and overgenerous perk costs TfL at least £17 million a year.

It’s not just saving money that could help prevent further fare rises: TfL should also be boosting the commercial revenue that it generates. Selling the naming rights to tube stations, as has been demonstrated already in London by the Emirates Cable Car, and on other underground systems around the world, could generate tens of millions of pounds for TfL. By making these realistic changes, the Mayor and TfL can cut needless waste and bear down on fares further for years to come.”

Latest Tweets