Boris learning harsh lessons

The harsh truth is that Boris Johnson has very little room to manoeuvre over his transport budget.

He is likely to be forced to raise fares even if that allows his political opponents to make capital out of the increases.

Virtually everything that has happened since he became Mayor has reduced the amount of money coming into Transport for London’s s coffers.

Most importantly, there is a four per cent reduction in the number of Tube passengers, caused by the downturn.

Then there is the collapse of Metronet, the infrastructure company, which, at least in the short-term, has blown a hole in his budget.

The Tube’s Public Private Partnership is in a mess, with the other infrastructure company, Tube Lines, also demanding more cash when the system is reassessed next year.

And work has started on Crossrail, the £16billion scheme which will absorb yet more cash. Nor has Boris helped his own cause.

He has embarked on an expensive and unnecessary programme of replacing bendy buses with conventional vehicles.

He is scrapping the Western extension of the congestion charge, which will not only be expensive to dismantle, but reduce the amount of money coming in from the scheme, one of the few ways he can raise cash other than by fares increases or extra taxes.

The latter is politically unpalatable for someone elected on a low-taxation platform.

Boris is finding out just how difficult it is to run transport in a huge city like London. The demands for investment are insatiable and there is a very good case for them. The trouble is someone has to pay – and it usually ends up being the farepayers.

  • Peter

    It’s really not that hard to run transport in London.

    All you need to do is sell the whole lot off to private companies and let them run what services they see fit – charging whatever fares they wish. The lower taxes, which would then be possible, would then encourage more businesses to come in.

    Let’s not forget that the early tube/sub-surface lines were built by private companies. Let’s give them the chance to show us what they can do.

  • “All you need to do is sell the whole lot off to private companies and let them run what services they see fit – charging whatever fares they wish. The lower taxes, which would then be possible, would then encourage more businesses to come in.”

    Except one of the reasons much of our infrastructure was nationalised in the first place was because those private companies were no longer making any profits. Trams, buses and motor cars appeared almost overnight and effectively floored many companies. (This is the reason why Bermondsey and Camberwell lack any heavy rail stations. They had them, but they were closed down.)

    Another problem is that the private approach tends to lead to a lack of joined-up planning. Who gets to decide where and when to build new lines? Would both Leicester Square and Covent Garden stay open? What about the rat’s nest that is Bank / Monument? Who owns the infrastructure west of Hammersmith which is shared by both District and Piccadilly lines?

    Who’s going to pay for the work needed to make the deep-level tubes continue in service for the next 50 years given that we can’t even get air-con working on them? While the short-term trends for our local climate suggest an initial period of cooling rather than warming, the long-term trend is one of ever-rising temperature. Corporations today tend to have a short-termist approach thanks to the current view shareholders have that shares exist purely as a form of surrogate currency and that an understanding of how complex systems like these actually work is unnecessary.

    “Private” and “Public” are the same damned thing. Whether you’re kowtowing to shareholders or Treasury mandarins, the end result is a continued lack of vision or planning. There is no One True Way. What’s needed is *reform*. Radical reform. Not just of government, but of business too.

    Publicly traded shares need to be treated as *shares in a business*, not just another kind of money to be bought and sold by random people with no real interest in how that business fares. As it stands, a public flotation is tantamount to the worst possible loan-sharking ever invented: “We need you to lend us some capital, and we’ll keep on paying you off forever!” Who the hell thought that was a good idea?)

    We need shareholders to return to the days when owning a share in a business meant you *cared* about that business and wanted it to do well, not just in the short term, but over the long term too. Because your money didn’t come from pumping the share’s short-term value so you can sell it on like a hot potato. It came from *dividends*.

    Until that happens, privatisation—at least in its present forms—makes no more sense than letting some mop-haired, bus-hating, Eton-educated ignoramus named Boris run it all instead. At least we can sack Boris. And he doesn’t get a “golden handshake” or any other kind of bonus for doing his job badly either.

  • Bluecaster

    Whatever. We in the provinces had privatisation of bus services a decade ago. Result in most cases is chaos, with clapped out vehicles running only on busy routes. Manchester’s Piccadilly is horrifying, with long lines of buses queueing to get in and blocking other operators, the tram lines, local deliveries, etc. Newcastle had a Metro as part of a continental style integrated transport system. Come deregulation and the whole thing went for six, with private operators running into the city centre on the roads which been designed to be mainly bus-free. Our local buses in North Yorkshire only run because they are subsidised – over the Pennines in Cumbria local services have completely collapsed because for some reason their transport grant is a lot smaller than ours.

    The main advantage of deregulating London buses would be that the mayhem would be so great that our lords and masters might take time off from painting their duck-houses and do something constructive. (Do I see a Dennis Ace overhead?)

  • “Whatever. We in the provinces had privatisation of bus services a decade ago. Result in most cases is chaos, with clapped out vehicles running only on busy routes.”

    Which is what any abstract entity designed with the express purpose of channelling money into its shareholders’ bank accounts would be *expected* to do.

    What constantly amazes me is how shocked—SHOCKED!—our lords and masters get when an entirely predictable outcome actually happens. Businesses are machines built for one purpose: that of lining their owners’ pockets with their customers’ money. End of. There is no concept of “public good” or similar folderol. There is no higher purpose. No sense of conscience. No sense of anything. Abstract entities aren’t people.

    The PPP and PFI fiascoes were experiments which tried to use legal checks and balances to provide that element of public duty and conscience, but they—predictably—failed. Business experts tend to work in the commercial sector—there’s nothing to attract them to government—so they ran rings around the civil servants charged with making it all work.

    The trick is to realise that there is no reason why you cannot simply design *new* abstract entities which work the way *we* want them to. Starting from scratch gives you a blank slate. No need to worry about complex interfaces between multiple corporations: you build an SPV with a fully specified charter. (Subcontracting to traditional commercial entities can still take place, but the key difference is that they wouldn’t be in overall control.)

    It’s been done before: it’s called the “British Broadcasting Corporation.”

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