Single vs period ticket pricing

[py_megapixel]

In which case I’m sure you’ll agree that, by the same token, the fact revenues slumped over the pandemic should not be used as a justification for lowering pay in real terms and/or worsening the Ts and Cs of transport staff.

What does that have to do with anything in this thread?

 

[43066]

What does that have to do with anything in this thread?

Because the argument is often made on here that fares are too high/revenues have slumped, and this is then used to argue against pay rises etc. That doesn’t hold true once people accept that public transport shouldn’t be viewed as a profit making enterprise and shouldn’t always be expected to cover its own costs. Bits of it do, clearly, but that is just a bonus.

 

[py_megapixel]

Because the argument is often made on here that fares are too high/revenues have slumped, and this is then used to argue against pay rises etc. That doesn’t hold true once people accept that public transport shouldn’t be viewed as a profit making enterprise and shouldn’t always be expected to cover its own costs. Bits of it do, clearly, but that is just a bonus.

I take your point, but then maybe the unions should not use increasing revenues as an argument for pay rises.

 

[43066]

I take your point, but then maybe the unions should stop using increasing revenues as an argument for pay rises.

Also a fair point. I suppose the unions would argue that pay rises should awarded during periods of growth when they can more easily be afforded, and wages should be protected during slumps - but yes there needs to be an element of reasonableness here. I would like a pay rise this year (wouldn’t we all!) but I recognise I likely won’t get one and I *certainly* wouldn’t be in favour of industrial action to try and secure one.

On topic for the thread, do we think fare rises should he avoided by covering more of the costs of public transport from general taxation? I’m somewhat agnostic on the point.

 

[JonathanH]

On topic for the thread, do we think fare rises should he avoided by covering more of the costs of public transport from general taxation? I’m somewhat agnostic on the point.

Probably very difficult to do as the costs in other parts of the economy will also be going up so it would mean diverting more funds away from other demands on the tax pot.

I think that transport is an area where the full 10% inflation is going to have to be applied to potentially soften the blow elsewhere.

There probably isn't enough political capital to be gained in restricting a 10% increase to, say, 7% but it would cost the taxpayer a lot of money.

 

[TheGrandWazoo]

Because the argument is often made on here that fares are too high/revenues have slumped, and this is then used to argue against pay rises etc.

Is it often made on here? I can't recall it.

The simple facts are that we have a model where, aside from London, relatively little public money is directed to the support of bus services. They are largely operated commercially and increasingly so over the last 12 years as the treasury reduced local government grants so that they had little to spend on anything outside statutory responsibilities, so it was enough to keep support to socially necessary services going let alone try to support fares. Trying to avoid the usual rabbit holes, the structure of ENCTS promotes a model where non-regular walk-on fares are now very high. In short, the underfunding of the scheme means the burden is transferred onto fare payers and so as to not to discourage or penalise regular passengers unduly, it means standalone single fares are high.

Note that the Bus Service Operators Grant (BSOG) is essentially a grant to operators to help keep fares lower but that was also halved about 10 years ago.

Now, it's all well and good on a board where people are overwhelmingly pro-public transport to say that taxation must be tailored to benefit public transport and dissuade car use. That should be done in order to meet our climate objectives, I think we all would agree. However, we see in central government that there is a reticence to do this in terms of upsetting the majority, car owning populace - see how fuel duty has been frozen for 11 years and now it's been cut. In local government, there are plenty of examples where clean air zones are applied to public transport yet private cars are excluded - "we're targetting the most polluting vehicles". This might seem (and is) separate to fare levels but it highlights the priorities of government.

Yes, there's some cash for zero emission vehicles, and a bit of support for services post Covid and whilst welcome, it is limited. To substantially alter fare levels, taxation will need to change and given where we are at the moment, that isn't going to happen.

 

[Watershed]

To substantially alter fare levels, taxation will need to change and given where we are at the moment, that isn't going to happen.

It would only need to change if the government is unwilling to borrow more. Whilst of course there are limits to the amount of borrowing the government can undertake, the Treasury is currently keeping a huge amount of 'firepower' up its sleeve at the moment. But if it's not used for socially beneficial causes, then what use is that?

As ever with these issues it boils down to politics. We have a financially conservative government, Covid excepted. It would rather that bus services die a death of a thousand cuts than make them an attractive alternative to driving into town.

 

[neilmc]

I am on a group which supports a specific contracted bus service in Cumbria. Our chair promoted a round robin day trip using our contracted service twice and Stagecoach three times to get back to your original point via some of the most beautiful scenery in the country. The sticking point was that the actual cost of five individual single tickets was around £33 and there is no county-wide day ticket which would enable someone to do this. Not yet anyway, I'm hoping that next year the two new Cumbrian authorities will somehow take bus transport by the scruff of the neck and make it work better than this.

 

[TheGrandWazoo]

It would only need to change if the government is unwilling to borrow more. Whilst of course there are limits to the amount of borrowing the government can undertake, the Treasury is currently keeping a huge amount of 'firepower' up its sleeve at the moment. But if it's not used for socially beneficial causes, then what use is that?

As ever with these issues it boils down to politics. We have a financially conservative government, Covid excepted. It would rather that bus services die a death of a thousand cuts than make them an attractive alternative to driving into town.

The deficit for 2020/2021 was £318bn - 14.8% of GDP (a record for peacetime) - in order to support Covid. Not certain that there's that much firepower and, even if there was, you would see it spent in other places ahead of buses such as socially beneficial causes such as Social Care or the NHS

 

[RT4038]

Because the argument is often made on here that fares are too high/revenues have slumped, and this is then used to argue against pay rises etc. That doesn’t hold true once people accept that public transport shouldn’t be viewed as a profit making enterprise and shouldn’t always be expected to cover its own costs. Bits of it do, clearly, but that is just a bonus.

Subsidies should not be used to provide terms and conditions for public transport staff above the level which the undertakings can recruit sufficient staff, and the terms and conditions prevailing for a similar level of work in other occupations.

 

[Watershed]

The deficit for 2020/2021 was £318bn - 14.8% of GDP (a record for peacetime) - in order to support Covid. Not certain that there's that much firepower and, even if there was, you would see it spent in other places ahead of buses such as socially beneficial causes such as Social Care or the NHS

That year was very much a worst case scenario though, and is now long in the rear view mirror. Recent months and quarters have seen strong growth in tax revenues, leading to substantially less borrowing than forecast. This is the firepower I'm talking about.

I'm not saying that buses are by any means the number 1 priority for any remaining funding (certainly electorally that's far from being the case) but equally it would be wrong to suggest the government doesn't have the money to do it. It's just choosing not to spend it.

 

[stuu]

I'm talking about pure commercial decision here. Why don't the operators charge less for singles and more for seasons like London, at levels revenue-neutral compared to the current rip off?


London frequently tops the list of fares comparison around the world.

London tops those tables because they use a single cash fare on the tube to compare them, something hardly anyone buys. £1.65 isn't expensive compared to other European cities.

 

[TheGrandWazoo]

That year was very much a worst case scenario though, and is now long in the rear view mirror. Recent months and quarters have seen strong growth in tax revenues, leading to substantially less borrowing than forecast. This is the firepower I'm talking about.

I'm not saying that buses are by any means the number 1 priority for any remaining funding (certainly electorally that's far from being the case) but equally it would be wrong to suggest the government doesn't have the money to do it. It's just choosing not to spend it.

Whilst it may be the high water point, we are still borrowing a hell of a lot of money. We borrowed >£150bn during 2021/2 - much more than anticipated and still very high compared to recent years. Also, whilst inflation is increasing tax revenues, it is also fuelling higher interest rates on debt interest payments. Borrowing is often beneficial when used for capital investment - Treasury tends not to simply subsidise industries and/or people and providing cheap bus fares falls into that category. Indeed, we've seen the rare step of an NI increase in order to better fund social care..

There is always a choice in how the government where raises tax revenues and how it is then spent. Over the last 12 years, we have seen a cut in BSOG and the amount that is provided to local authorities to support "socially necessary" services. I don't see any great optimism in thinking that the general populist trends (money for the NHS, not disadvantaging motorists, money for social care) will continue. They'll be some crumbs to grab headlines but I'm fairly pessimistic.

 

[NorthOxonian]

Perhaps a more reasonable compromise is the ‘flexi’ ticket concept. No idea how widespread it is, but here in Hull you can get operator specific tickets which, for the same price as a 7 day ticket, offer 5 discounted day tickets to use ad hoc in a 12 month period. Therefore, infrequent bus users can still be offered some form of discount on the regular day ticket price.

In terms of single prices, as suggested, the answer lies with ENCS. Even without this though, it’s hardly an unusual pricing strategy to reward loyalty and those who buy in ‘bulk’. Therefore, it’s not unreasonable to suggest frequent bus users can get a lower cost per journey than ad hoc users.

In Oxford, we have much the same - but also some operators sell carnets of single tickets. You can buy 12 singles for £18 (they would cost £30 if bought separately). A four week ticket costs £54 so would be equivalent to 36 single fares.

On the broader topic, one factor which hasn't come up in this thread is tourism. Cumbria has been mentioned in this thread and it's particularly stark there; a single from Keswick to Windermere (to use an example) is almost £11 whereas a 30 day ticket for Stagecoach costs £110 - that's a factor of 10x. But there are similar examples in many other tourist honeypots, albeit to a lesser extent. In these areas, many of the tourists visiting are relatively affluent, but the locals often survive on pretty tight incomes (especially those relying on public transport). By having expensive singles for those who can afford to pay, this subsidises longer period tickets for those who might otherwise struggle.

 

[TheGrandWazoo]

On the broader topic, one factor which hasn't come up in this thread is tourism. Cumbria has been mentioned in this thread and it's particularly stark there; a single from Keswick to Windermere (to use an example) is almost £11 whereas a 30 day ticket for Stagecoach costs £110 - that's a factor of 10x. But there are similar examples in many other tourist honeypots, albeit to a lesser extent. In these areas, many of the tourists visiting are relatively affluent, but the locals often survive on pretty tight incomes (especially those relying on public transport). By having expensive singles for those who can afford to pay, this subsidises longer period tickets for those who might otherwise struggle.

This is the point often raised by @Bletchleyite in relation to this and the Isle of Wight.

In essence, tourists are exploited in order to provide cheaper year round offers for regular travellers.