Home > Uncategorized > Who decided the travel fare increase?

Who decided the travel fare increase?

London Mayor Boris Johnson said on Thursday that the city’s bus and tube fares would be raised by 12.7% and 3.9% respectively starting January next year.

Travel for London commissioner Peter Handy admitted yesterday in BBC news program The Politics Show London that he provided Boris with these increase figures after discussion with a group of people.

A decision that literaly affects nearly ten million people was just made by a group  of people? That’s hardly imaginable, especially in such a democratic country.

Even back in China when the governent plans to raise certain fees, i.e., water fee, certain procedures have to be followed including public hearing, though which in effect is most likely to be just formality. Just days ago, Shanghai taxi fare was raised from 11 yuan to 12 yuan for the first 3 km, and from 2.10 yuan to 2.40 yuan per km after that. This time there was no public hearing because such raise was based on a fare-oil price linkage bill passed in 2006. Now people are challenging the legal validity of this bill.

London’s buses and tubes are operated by Transport for London, the city’s transportation agency, as a public service. I did some background research, and found that a huge percentage of the corprate’s funds came from the government.

  • Government grant direct to TfL
  • Revenue from fares and other sources (eg Congestion Charge)
  • Secondary income (eg advertising)
  • TfL ‘prudential borrowing’ against future revenue, which is capped until 2018 under TfL’s ‘spending review 2007’ funding settlement with Government
  • Asset financing and property disposal receipts (although this is unlikely to be a significant source of further funds post 2018)
  • Other forms of Government grant to parts of the transport network not controlled by TfL, eg Network Rail, the DfT HLOS process, borough highway maintenance
  • Contributions from the private sector, eg developer funding for associated transport investments
  • Direct borough funding
  • Other Government funding sources including specific allocations to support regeneration, health and education, etc

The government money comes from the tax paid by london residents. Therefore the logic here is very simple: who pays the money, who gets a word on the issue. That’s why I’m curious why there was no public hearing on public travel fare increase.

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