The 2017 TfL Fare Changes: Perception and Reality

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On 18 November 2016 the Mayor of London, Sadiq Khan, confirmed the TfL fares for 2017. As part of this he announced a four-year ‘fare freeze’ on all ‘TfL fares’ starting next year, meeting his manifesto promise. Whilst this is factually correct, however, TfL fares do not apply to many of the tickets under which regular passengers travel. Indeed the majority of commuters will likely still see a fare increase roughly in line with the Retail Price Index (RPI). We look at the reason for this, along with all the fare changes, below.

When is a TfL fare not a ‘TfL fare’?

To the average traveller, it would be easy to assume that the definition of a TfL fare is any fare applied to a journey that takes place on a TfL-run (or managed) service. That is, a journey on a bus, tram, Underground or Overground train.

In reality, however, many fares within London are innately (and legally) linked to National Rail fares, both for Oyster and paper tickets. This is the result of the admirable efforts on the part of London’s transport and political authorities, for more than thirty years, first to introduce Travelcards and then a smart ticketing system (Oyster) that genuinely covers all the journeys London’s travellers need to make.

It is that second goal which is key to understanding the complexity of fares and ticketing in London. This is because the majority of regular travellers in London either begin or end their journey using a method (such as a national rail service) that is outside of TfL’s control. As a result, in order to create Travelcards and then (later) Oyster it was necessary to reach agreements with the DfT and Train Operating Companies (TOCs) as to what level of reimbursement they would receive from any journey made on a Travelcard.

The ‘fare freeze’ stumbling block

Whilst much of the debate during the Mayor’s campaign focused on the direct cost to TfL of a potential fares freeze, in truth it was always these arrangements that were likely to present the bigger stumbling block, something that was pointed out as part of the LR coverage at the time:

Given Travelcard is a jointly priced product with the TOCs then we will see Travelcard prices rise every year because the DfT will demand it. The SoS [Secretary of State] has to sign off the fare deal each year. Mr Khan can’t get round that. This then leaves him with a dilemma – does he go back to the bad old days of a TfL only product (LT Card anyone?) whose prices he can control? That does nothing for simplicity. Daily capping prices involving rail services will also rise unless Mr Khan is going to ship tens of millions of quid from City Hall to the DfT to “compensate” the TOCs for the divergence from their bid projections? I think we should be told.

The simple truth was that TfL were always bound by a set of fares agreements that they would have been hard-pressed to unpick – even if a Conservative-run DfT, themselves under pressure to realise savings, or beyond them the TOCs, who have their own financial targets to meet, had felt inclined to help them do so. Perhaps the only acceptable (and indeed workable) solution would have seen TfL accept the full actual and future cost of the freeze to all parties – something that even Khan’s campaign at the time would likely have agreed was unacceptable, if the opportunity to ask the question had presented itself.

It is this problem that has likely resulted in the ‘fares freeze’ taking the very-specific form that it has. Reading the actual fare guidance, rather than the press release, it is clear that TfL attempted to negotiate a full freeze with the DfT and TOCs, but were unable to do so.

Nor, understandably, were the TOCs prepared to let TfL suddenly start running cheaper services on the parts of the railway where they shared stopping patterns (even if this was somehow technically feasible to do).

What this means for passengers

An individual trying to work out whether their fare is going to rise should essentially ask themselves:

Does my journey take place entirely on a TfL service which doesn’t share stops with a non-TfL service?

If the answer is “yes” then the fare is almost certainly frozen. If the answer is “no” then it definitely isn’t.

Fares on TfL buses, London Underground, London Trams, London Overground, DLR and TfL Rail services are thus frozen except for some small increases in the Brentwood and Shenfield area on TfL Rail. This is because TfL cannot create divergence from Greater Anglia fares. Where TfL fares apply on some National Rail routes, for example Fenchurch St to Upminster, these fares will also be frozen.

On the West Anglia services that were transferred to TfL in May 2015 there will be some fare increases. Cash fares will rise by 10p, as will the special Pay As You Go (PAYG) fares that apply for journeys to Liverpool St (NR). Point to point season ticket prices to Liverpool St (NR) will also increase by 1.9%. This is because there is a tie between TfL and Greater Anglia fares for certain fares on this part of the network. PAYG fares in zones 1-6 will be frozen. Note, however, that fares beyond Zone 6 on these routes are controlled by Greater Anglia so will increase.

Product changes

The good news is that the fare freeze is by far the most complex part of this year’s announcement. There are no structural changes to the product range this year with daily cap / day Travelcard zonal combinations unchanged.

Indeed despite the fares freeze being in place TfL’s income is forecast to rise by around £52.2m. Most of this (£41.2m) comes from TfL’s share of Travelcard income where prices will rise. However £11m of the extra revenue is forecast to come from generated trips as a result of travel becoming cheaper.

PAYG on national rail

The National Rail PAYG tariff sees increases for both peak and off peak travel. Fares increase by 10p for all zone combinations. Through Tube and Train PAYG fares into or through Zone 1 only increase by 10p peak and off peak. The operators have frozen the “add on” fare element for Zone 1 for 2017. The Zones 1 to 6 Tube / Train peak fare rises to £7.80 which will also become the new peak “entry / exit charge” for PAYG for missed touch in or touch outs or exceeding maximum journey times. The off peak equivalent will increase by 10p to £5.40.

Child PAYG flat fares for rail travel in Zones 1 to 6 remain frozen at 85p peak and 75p off peak for use on TfL services and those TOCs which use the TfL tariff. Child fares on other TOC routes are priced at half the adult rate.

One Day Tickets and PAYG Caps

The revised prices for 2017 are shown below. Prices and caps typically rise by 10p-30p. Note that Zones 7 to 9 retain a price differential between peak and off peak caps which does not apply within Zones 1 to 6.

2017 Prices Anytime Off Peak
Paper Oyster Cap Paper Oyster Cap
Zones 1-2 n/a £6.60 n/a £6.60
Zones 1-3 n/a £7.70 n/a £7.70
Zones 1-4 £12.30 £9.50 n/a £9.50
Zones 1-5 £17.50 £11.20 n/a £11.20
Zones 1-6 £17.50 £12.00 £12.30 £12.00
Zones 1-9 £22.10 £17.10 £13.10 £12.10

Season Tickets

Weekly Travelcard prices increase by around £0.40-£1.10 (approximately 1.8%) depending on the number of zones purchased. There are no changes to the standard multipliers from the 7 day to monthly and annual prices.

Some examples of new prices are set out below.

2017 Prices 7 Day Travelcard
Zones 1-2 £33.00
Zones 1-3 £38.70
Zones 1-4 £47.30
Zones 1-5 £56.20
Zones 1-6 £60.20
Zones 1-9 £85.70
Zones 2-3 £24.70
Zones 2-4 £27.30

Other Details

There are no changes to the time bands for peak PAYG charges – they remain as 0630 to 0930 and 1600 to 1900 Mondays to Fridays.

There are no changes to the time at which the off peak period starts for One Day Travelcards. It is still 0930 M-F and all day Saturdays, Sundays and Bank Holidays.

As is typical the special PAYG rates which apply to journeys outside of the Mayor’s control are not stated in the Mayoral Decision document. This covers places like Watford, Cheshunt, Hertford East, Gatwick Aiport and the special St Pancras – Stratford International fare.

The Oyster Card deposit is unchanged at £5.

Cycle Hire charges

There are no stated changes to charges for the use of the Santander Cycle Hire Scheme.

Emirates Air Line fares

The Mayor has announced that fares on the Emirates Air Line will be frozen.

Spinning the savings

Overall, longstanding readers of our fares coverage will likely see many positives in this year’s announcement. Indeed the Mayor should be commended for delivering any element of a fares freeze at all, and for managing to secure from TfL commitments that it is possible to do so without compromising the overall delivery programme the organisation is already committed to.

At the same time, however, there is a very real danger that the announcement fails to manage the expectations of Londoners, the vast majority of whom will look only at the headlines prompted by the press release from the Mayor’s Office, rather than the full Mayoral Decision it relates to.

This isn’t to say that the press release is factually misleading. Simply that it can fairly be accused of relying on a misunderstanding of the scale of travel in London to imply a broader fares freeze than actually exists. The Mayor’s press release, for example, is keen to point out that:

Every month at least seven million customers will benefit all the time as they do not reach ‘caps’ on pay as you go fares or do not use Travelcards where the fare is set by the Department for Transport according to national Government fares policy. Each month a further four million customers will benefit from the freeze whenever they use TfL services for part of their journeys.

This is factually correct. But TfL’s own numbers indicate that 111.6 million passenger journeys are made, per month, on the London Underground alone. This should not be taken as a direct comparison – the figures in the press release do not make clear whether they refer to ‘journeys’ or ‘passengers’ – but either way the scale of the difference is clear, and this before factoring in the daily numbers for bus or rail users as well.

Indeed even the inclusion of the clarifying phrase ‘where the fare is set by the Department for Transport’ is interesting, for it represents one of only two mentions in the press release of the fact that there are limits to the fare freeze at all.

This stands in contrast to the underlying fares Mayoral Decision itself, which makes repeated statements –at the rate of 1.85 per page – that any increase in fares is as a result of decisions by the TOCs who are complying with Government policy.

That this fact is so important to state repeatedly in one place but not the other is telling in itself.

Managing expectations

Ultimately, it would be unfair not to expect the Mayor to make the most politically out of the freeze that has been delivered. Indeed those who have watched the politics of City Hall for some time will remember that his predecessor, Boris Johnson, was fond of announcing ‘real terms’ fare freezes annually in a similar way.

The impact of freezing bus fares should also not be under-estimated. When partnered with the new ‘Bus Hopper’ ticket, the fare freeze here will have a hugely positive impact on some of London’s poorest citizens, many of whom have no choice but to use the bus network (often with multiple changes) to complete journeys that they simply can’t afford to make by Tube or rail.

Internally at least, the fact that the mainstream media (or at least their headline writers) have largely failed to pick up the difference between the reality and the impact of the release will also likely be seen as a success.

In that final success, however, lies a danger for the Mayor’s Office – and by extension for TfL. For the majority of the 24,000 people who have shared the Evening Standard’s article: ‘Sadiq Khan formally confirms Tube and bus fares will be frozen until 2020’ will likely not be covered by the fare freeze itself. The same likely applies to the readers of ‘Mayor confirms London transport fares freeze until 2020’ on the BBC, ‘TfL fares to be frozen for four years’ on the Guardian or many of the other articles written.

khanfares

The Evening Standard article

How those readers – and indeed media sources – will feel in January when the reality of the fares freeze doesn’t match the headline remains to be seen. For whilst TfL claim to have found the necessary financial savings required to make this freeze happen, they’ll be unable to help if London’s commuters decide that a promise was broken. If that happens, then the Mayor’s Office will have to handle that deficit of trust on their own.

You can read the read the full text of the Mayoral decision on 2017 fares online.. Cover image courtesy (and copyright) of Martin Hoscik

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Written by John Bull