Correspondence in full

Dear Emma

Thank you for your email.

The questions posed by the Barnes Community Association have been answered, and I have attached a copy of our response.  

In the meantime, I can advise that we are continuing to look at options for a higher frequency link than route 485 between Barnes and Putney. This work is ongoing but we hope to be able to update you in the near future.

I look forward to our meeting on 18 March.

Kind regards

Leon

Leon Daniels
Managing Director Surface Transport
Transport for London
 

Transport for London’s response to the questions raised by Barnes Community Association

TfL has quoted a range of costs to residents to extend the 22 bus to Barnes from £500,000, to £750,000 to £1m. At our meeting in October your colleague Bob Blitz explained that whatever route was chosen to extend the bus into Barnes the costs would remain the same, that the current frequency of the 22 had been used in the calculation and that the number of bus trips were calculated after examining the current usage of the 209 and the 485 buses. Although every bus route in London is subsidised, no subsidy had been part of the calculation.

The annual cost of the bus network is about £2,100 million per year. The income from fares is about £1,500 million per year, leaving an operating deficit of about £600 million per year. This deficit is covered from three main sources, general grant  from the government, business rate retention from the Greater London Authority, and operating income (such as from advertising and commercial developments).  General grant from the government will be reduced to zero, so other revenue streams will need to be expanded. The Mayor has also frozen bus fares until 2020 and it is within this context of falling external income that service planning and maintenance of a reliable network are carried out.

Our latest business plan can be found at: http://content.tfl.gov.uk/tfl-business-plan-december-2016.pdf.  Please see the tables on pages 26 and 53 for financial summaries.  

The extent to which each route’s fares covers its costs varies across the network and also varies by time of day. Where routes parallel each other, fares are split across the routes, with different cost recoveries.  We include fares income (revenue) changes in all our business case calculations on service changes, so by default the gap between costs and revenue is taken into account.  The schemes that yield better value for money are those more likely to be progressed.

What is your final estimate, with a detailed breakdown, of the cost of extending the 22 bus into Barnes?


We estimate the total gross cost of extending route 22 from Putney Common to Barnes Pond as £940,500 per annum.  This is the total cost of running the service, taking account of vehicle ownership, additional drivers, mileage costs, maintenance and engineering (including staff costs) and bus company office costs.  We estimate that five extra peak buses would be required, and an average of 11 extra driver duties per day.

We assume that you have not included any subsidy in these costs – is this correct?

As mentioned above, our budget and business plan take account of the expected gross cost of running the bus network, the revenue expected from the network and therefore the required subsidy to make up the shortfall.  The increase in gross costs to run the suggested extended service is £940,500 per annum.  We have calculated additional revenue of £200,700 per annum, meaning a subsidy of £739,800 per annum would be required to run the extended service.   

We have been told that TfL usually work on a 40% cost recovery model. Therefore the cost of the extension would be reduced by 60%.  Do you agree and, if not, why not.

We do not agree with this. Currently, about 74 per cent of the cost of the bus network is paid for by revenue and the remaining 26 per cent comes from the sources mentioned above.  We have to account for the total gross cost of running the network and therefore it is right to consider total gross costs.

What is the range of (maximum and minimum) and the average level of subsidy on all London bus routes?

There is a very wide range of cost recoveries on the bus network, with the average around 74 per cent, as previously mentioned. Cost recovery varies between routes but also on an individual route by time of day and day of the week. On individual routes the cost recovery ranges from 10 per cent to over 150 per cent, depending on passenger usage, length of route, length of passenger journeys (for paper travelcard revenue apportionment), and the cost of operating a route.

What has been the monthly gross savings, before subsidy, from curtailment of the 283 bus from Hammersmith to Barnes?

There have been about £38,000 gross savings per month from the curtailment of route 283 before revenue loss is taken into account.  However, these resources are being used to ensure reliability is maintained on the rest of the network.

Number of trips

How many bus trips did you estimate would be generated by the extension, how was this calculated and what additional revenue would this generate? How many of these trips were from/to the Wetlands Centre.  How many of these bus trips were new trips reflecting passengers shifting from cars/taxis and new demand due to improved connectivity?  Did you take into consideration the survey information which we sent you, and if so how?

We estimated that an additional 1,120 passengers a day would travel on the network if route 22 were extended, equating to £200,700 revenue per annum.  This was based on current usage of the network in the area and took account of the improved travel opportunities that the route 22 extension would offer. 2,600 passengers a day would be required to cover 50 per cent of the costs of running the service and over 5,200 to pay the full costs of the extended route. However, we do not believe that we would generate 5,200 new passengers per day to the network if this route was extended.

Other issues

Did you calculate the benefits of extending the 22 route such as reduction in air pollution, decrease in congestion, ease of travel for less mobile people, benefits to Barnes businesses, and, increasing the safety especially to women walking across the common at night.  If so, how and what costs have you used?

No. Benefits are calculated at a general level and take into account the decrease in journey time and increased amenity of a service change. The size of the bus network is fixed by the budget available to us. If money is not spent in the Barnes area it will be spent elsewhere and the benefits outlined above would still be accrued at a network level.

You said that you would not trial this extension even when the closure of Hammersmith Bridge would provide ideal circumstances for this.  What conditions/criteria would need to be met for any trial extension? 

We do not trial changes to the bus network.  Instead, we have well developed models for estimating the effects to costs and revenue of changes to the bus network and we are confident that extending route 22 to Barnes would not be the best use of our limited budget.  Under the circumstances of a closure of Hammersmith Bridge, we will undertake another planning exercise to establish the best network to cater for displaced passengers.

You said you would not add the extension into the invitation to tender for the new contract for the N22/22 bus route. Could you please send us a copy of the invitation to tender?

Please find the specification issued for route 22 attached.

What is the monthly gross cost of staffing Hammersmith Bridge on both sides to monitor bus movements over the bridge to ensure the one-bus rule is enforced. What do this cost include?

This costs approximately £6,600 per week.  However, we are looking to lower the cost by reducing hours and using in-house staff.  The costs are the same no matter how many buses are run through, so would not decrease if we ran fewer buses.

Have you estimated the weekly cost of lost productivity and damage to the London economy by delays encountered by commuters now while Hammersmith Bridge is under emergency measure and when it is closed to all traffic next year?

We have not estimated the impact of this.  As Hammersmith Bridge is an asset belonging to Hammersmith Council, they would be best placed to make such an estimate.

Can you send us the business cases for recent London route extensions, such as the E8 and 42 routes?

Route 42 extension to Dulwich Sainsbury’s

Route 42 was extended from Denmark Hill to Dulwich Sainsbury’s to provide new links which had long been requested by the local borough and stakeholders, in addition to extra capacity. The route was converted to double deck at the same time; only the extension business case is included here.

The additional gross cost of the route was estimated at £673,000 per year, which was for three additional buses and an average of eight driver duties per day.  Additional patronage to the network was estimated at 1500 per day. This consisted of about 520 new trips to the Sainsbury’s store and 980 new trips along the rest of the new route due to additional frequencies and new links. The additional revenue generated by these trips was estimated at £270,000 per year, giving a net cost of about £404,000 per annum.  The additional passenger benefits from this scheme were estimated at £1.2 million per annum, giving a benefit to net cost ratio of 3.0 to 1. The extension was introduced in October 2016.

Route E8 extension to Hounslow Bell Corner

This scheme was to extend route E8 from Brentford to Hounslow to give additional capacity and new links.  The original proposal was to run via West Middlesex Hospital, however, due to stakeholder objections this aspect has not been implemented. The route was converted to double deck at the same time; only the extension business case is included here. This scheme included withdrawal of school day journeys on routes 235, 237 and 635. 

Total additional gross cost was estimated at £1.3 million per year which was for six additional buses on route E8, saving one bus on route 235 on schooldays. There was an increase of an average of 17 driver duties per day on route E8.  Additional patronage to the network was estimated at 3200 per day, consisting of about 1500 new trips due to increased frequencies on existing routes and 1700 new trips due to new links between the Hounslow and Ealing areas.  The additional revenue generated by trips was estimated at £470,000 per year giving a net cost of about £860,000 per annum. The passenger benefits from this scheme were estimated at £2.2 million per annum, giving a benefit to net cost ratio of 2.5 to 1. The extension was introduced in May 2016.

Route options

Bob Blitz stated at the October meeting that any extension route into Barnes would have the same cost.  The route that he had considered was from the Spencer pub, along Lower Richmond Road, Rocks Lane, Church Road to Barnes Pond and then back in reverse.  Could you please confirm that the same cost would apply to the following 3 routes and that if the frequency was halved then the costs would halve?

1. Route continues past the Spencer pub along Lower Richmond Road, Mill Hill, Station Road, Church Road, and into Queen Elizabeth Walk into the terminus at Wetlands – returning along the same route in reverse.

2. Route continues past the Spencer pub along the Lower Richmond Road, Rocks Lane and Queen Elizabeth Walk and into the Wetlands terminus– returning along the same route in reverse.

3. Continuing to use the Spencer pub terminus buses start their London run from the Spencer pub and journey via Barnes around the Barnes loop (i.e. Lower Richmond Road, Rocks Lane Church Road, Station Road, Mill Hill and back onto the Lower Richmond Road). Buses from Piccadilly run via the Barnes loop before terminating at the Spencer pub.

Option one would have the same basic cost. 

Option two would be cheaper, but would generate far less additional revenue as it would not serve Church Road. 

Option three would be much more expensive, as buses would have to run Spencer Arms – Barnes – Spencer Arms twice on each round trip. 

If only half the buses ran through, the costs would not necessarily halve, as some additional layover time might be required to take account for the need to ensure buses left at even intervals where the full service started again towards central London.  As journey times could vary on the Barnes leg, more service control would be required to ensure even spacing east of Putney.  During off peak periods and Saturdays the route runs every 7.5 minutes, which means that if only half the service ran through this would give a 15 minute service through to Barnes.  This means it would be low frequency and need to be timetabled, and it would be difficult to maintain a good service given the variability of journey times experienced along the length of the route, for example on King’s Road. On Sundays and evenings, the route runs every 10 minutes – again we would not want to run a 20 minute service through to Barnes on an otherwise high frequency route such as route 22.  It should be noted that halving the service would half the benefits as well, though the inherent unreliability could mean that benefits would be lower than half

16th March 2017

TfL answer our questions we sent them in September