THIS week’s inflation figures all but confirm that Londoners will face a rise in Tube and bus fares of over 4 per cent in January. This may look small compared to projected increases of up to 9 per cent on some of the busiest rail routes into London, but it is still regrettable. It doesn’t need to be like this.
Setting fares is a tricky balance between maintaining adequate funding for essential maintenance, upgrades and new infrastructure, and ensuring that public transport remains affordable. Politicians of all stripes support Boris Johnson’s pledge to bear down on the cost of travel, but few have offered credible or robust proposals for how to mitigate against fare rises. To avoid pushing costs onto travellers, Transport for London (TfL) must make savings or raise new revenue. Billions of pounds have been saved since 2008. New revenue raising activities, however, have been thinner on the ground.
That is why I have published a report setting out how TfL could generate sufficient new revenue by embracing corporate sponsorship. Selling the naming rights to a number of high profile stations could generate millions of pounds, which could then be directed at reducing the level of fare increases or even removing the need for them altogether. Two well-known deals have already been used in recent years to part-fund new infrastructure: Barclays is contributing £50m over ten years to sponsor London’s cycle hire scheme, and Emirates is paying £36m, also over ten years, for the naming rights to the Thames cable car. Yet TfL has so far been reluctant to use sponsorship on its existing network.
One of the main reasons is a perceived public anxiety over changing names of stations that have become part of London’s fabric. Yet polling conducted for my report found that more than four in five Londoners (82 per cent) would support more sponsorship across public transport – either by renaming existing Tube stations, or entire Tube lines and bus routes – if the proceeds were used to fund developments that were firmly in the public interest, including limiting fare increases.
And London is very much behind the curve. Cities like New York, Dubai and Madrid have all sold naming rights to their underground stations. A recent deal between Samsung and the transport authorities in Madrid, which saw the city’s most famous metro station Puerta del Sol briefly become Sol Galaxy Note, indicates a continuing demand for such opportunities in the private sector.
TfL’s initial and somewhat baffling reaction to this proposal was to state that selling naming rights to stations – such as Virgin Euston – is unworkable due to the costs involved in changing signage. This position was quickly reversed, with the Mayor stating that he would be open to “Emirates style” proposals. Given the massively higher footfall and profile of some of London’s busiest stations compared to the cable car, it is not inconceivable that selling naming rights could bring in hundreds of millions of pounds, way in excess of existing deals.
However being “open” to proposals is not enough. TfL should be actively testing the market and proactively inviting expressions of interest from firms who share TfL’s values. Here’s hoping that we won’t have to have this same debate again next year.
Gareth Bacon is Conservative Group budget spokesman on the London Assembly.