Wednesday, 16 March 2016

Last week on LBC TfL Commissioner Mike Brown was asked about Sadiq Khan’s plan to freeze fares over four years, he explained that the discrepancy between Khan’s estimated cost of £450m and TfL’s estimate of £1.9bn was down to different “assumptions” about inflation along with the fact that TfL were working to a five year business plan whereas Khan was looking at the Mayor’s four year term of office.

Brown said that either set of calculations were "perfectly legitimate"  and when asked if he would be happy to work under Khan he said that he was excited at the prospect of working under whoever was elected as his new boss, all of which sounded to me like someone who has seen the writing on the wall and does not want to be part of the flab trimmed from TfL after 5th May.  Strangely this little bit of revisionism doesn't seem to have been as widely publicised as the original TfL statement that freezing fares would open up a £1.9bn black hole.  I wonder why........

Here’s the link for Adam Bienkov's article I came across yesterday

And here’s the link to the interview on YouTube, start watching from 13:00


  1. lol. I am not going to bother watching/listening to anything Ferrari has to say. Especially if Commissar Braun is involved too. Having read your description of the issue though, my thought is that BOTH Khan and Brown can't be right. The figure of approx. £500M cant possibly vary by 400% to take into account inflation! lol. However, I am more inclined to trust Khan's estimate, bearing in mind he was a lawyer and so very used to scrutinising the fine details. Unlike our esteemed Commissar Braun who will quite happily throw away £100M on contractors. Even if said contractors don't even do any work to earn said £100M. Bear in mind Khan could easily save approx. a million (£675,000) just by getting rid of Brown alone!!

  2. Has anyone else noticed how similar Mick Brown looks to the Stingray character "Agent X20"?? I think its something to do with the buggy/baggy eyes.

  3. The problem with calculating the long term cost of a fares freeze is that it has an effect every year afterwards for eternity, not just for a mayor's term or an X years business plan, as each year fares will be a bit less than they would have been unless they go up in a later year by more than usual. The cost really does depend on your viewpoint.

  4. The difference between £450,000 and £1.9 billion is not 400% – one figure is 42 times the other! Mr Khan's figure is actually £450 million.

    The figures to enable anyone to make an educated guess about the effect of a fares-freeze are actually in the public domain, it shouldn't depend on personalities.

    At TFL say that about 40% of their £11.5 billion annual income comes from fares, so that would be £4.6 billion.

    Their business plan optimistically assumes fares will rise by RPI +1% each year until 2021. If they don't, and assuming an RPI increase of 2% each year, a fares-freeze would mean they are missing their own target by 3% or £138,000,000 in the first year, and progressively more each year after that as Anonymous on 17 March 2016 at 09:07 points out.

    The resulting total figure of something between £550 million and £650 million over four years seems to be slightly closer to Mr Khan's claim, but of course you can nudge the figures dramatically in either direction by adjusting the assumptions about inflation, or indeed redefining what you mean by 'fares'. Also, Mr Brown's figure of £1.9b assumes increased ridership of 5% over 4 years, and so includes the non-increases these extra passengers won't be paying. Anyone can play this assumptions game though, since frozen fares will presumably increase ridership, and therefore income, by some unknown degree.

    Thanks to Mr Shrugged for provoking an interest in looking at the published figures.

    1. Whoops, thanks for spotting that, corrected my mistake

    2. The relationship between fares and ridership is known as the price elasticity and there are various estimates of this used throughout the rail industry.

      The problem is: how is ridership supposed to increase when the parts of the system that people actually want to get to are already operating at capacity, and the modest increases to that capacity (one or two extra trains per hour here and there in the peaks) will go nowhere near matching the growth in ridership that is projected even with the current fares increases, let alone if these were frozen...

    3. i just like the beginning he said doors were alleged to be open on pic line and then said no they wasn't open although management have confirmed 2 doors came fully open in-between Heathrow 123 and t4