Paul Corfield wrote:

On Thu, 29 Jan 2009 13:04:33 -0800 (PST), Mizter T
wrote:

Paul, I'm tempted to ask all sorts of questions that I rather suspect
you can't really address, at least not on a public forum - so I'll ask
this one instead. What is the thinking behind these cuts - is it in
expectation of lower passenger numbers and hence lower revenue
courtesy of the recession, or is it part of a (or should I say the)
wider cost-cutting exercise across TfL - and if so has this budget-
crunch been brought on by Crossrail or are the factors at work rather
wider than that?

The following is what I have posted somewhere else - not on usenet. I
think it covers the broad issues. It's also in line with our internal
comms messages.

It's not about the recession at all. It is do with the impact of the
government's funding settlement and the integration of the former
Metronet companies. Taking all that resource back in house means
there is duplication of roles, people and systems. There is a lack of
efficiency as a result of all of this. LUL also has the huge task of
delivering the Line Upgrades and some of the reorganisation is to
make those projects work more effectively. It also needs to be borne
in mind that we do not yet have the cost of restating the contract
with Tube Lines (for post 2010) and there may be a multi billion pound
bill from that. That's why Boris is saying that bill is for government
to meet as PPP was their initiative.

There are cuts being made in TfL - some of that is the
result of changed Mayoral priorities and some is down to lack of cash
more generally despite the £39bn ten year settlement. There has been a
long standing drive to achieve efficiencies within TfL since it was
created out of various organisations. It can be argued that the current
review is simply a more intensive version of what has gone before.

It needs to be borne in mind that Crossrail may offer
job opportunities for a number of years for people who are displaced
or who opt to leave. However those jobs may be with the private
sector contractors chosen to deliver Crossrail rather than TfL itself.

I doubt we will see service cutbacks or effects on maintenance - all
of those staff are out of scope of the review despite the union
comments. As Boris has said that improvements to the bus network will
continue then I'm not sure that we will see cutbacks in that area or
even in the spec for tender awards (if he keeps his word). I am
already noticing a reduction in crowding on the tube in the mornings
when I travel so I am sure ridership is falling a bit but nonetheless
the peak is still extremely busy and operational resources are
typically geared to the peak service level. I haven't noticed much of
a change on the buses but I guess there may be a fall there given so
many routes feed the tube network. A point that just dawned on me
earlier today is that the nature of TfL's revenue stream may switch out
of season tickets and more towards PAYG given the current employment
situation - what that will do in terms of TfL's credit rating and bond
issues remains to be seen. We live in interesting times.

We've all done our calculations using the voluntary severance calculator
that has been put on our intranet. We shall find out in a few weeks
whether we still have our existing jobs, will have to go through a
selection process or if our job has disappeared. Boltar can start
praying or whispering incantations to get as many sacked as possible!

I hope the above goes some way to offering an explanation as to what is
going on.


Of course, how could I overlook Metronet coming back in house - that's
inevitably going to shake things up. I haven't closely followed the
Tube Lines contract business, but this is essentially Tube Lines
appealing to the PPP Arbiter that they aren't getting paid enough for
what they do, and the subsequent result of that appeal, right? When
does the figure come in, and when it does can TfL appeal that figure
at all?

I guess that with regards to what Boris is saying about the government
funding the extra bill is little different from what Ken would have
said, the difference perhaps being how Boris says it compared to Ken -
the ex-Mayor was at least marginally the same hue as the government
and had some influence there.

Changed Mayoral priorities is a broad brush stroke - the immediate
things that come to mind are his mantra of "taxpayer value" which I
suppose results in cuts to what I suppose one might call 'non-core'
activities, also putting the Tramlink extension, Cross River Tram and
other stuff on the (far) back burner. Has not the budget for cycling
has been cut - daft if so. Were there not to be cuts in the TfL
promotion and marketing operation?

I very much hope that Boris doesn't mess up the bus network. I think
the withdrawal of the bendies is a bad move but that really shouldn't
mean people take their eye off what is happening elsewhere - it's only
a relatively small part of the bus network after all. The
specifications for tender absolutely need to be kept at their high
level, otherwise things will fall apart and confidence in the bus
network will erode - we don't want a race to the bottom with bus
companies bidding low and delivering lower. Of course the other danger
is that the 'Boris bus' project will divert funding away from the day
to day operation of the network leading to a deterioration - one very
much hopes this irony will be avoided.

Interesting point about the revenue stream and the recession. Less
season ticket holders and the level of season ticket refunds is
something the TOCs keep on coming up with. I wonder if one of the TOCs
issues with implementing PAYG is that more people might switch to PAYG
from season tickets (or even Travelcard seasons) - even if NR fares on
PAYG were set the same level as paper ticket fares, people might well
still be tempted because of the flexibility and ease of use of Oyster.

Regarding the timing of this announcement - presumably it's been on
the cards for a while? It's just that one wonders if there's a grain
of truth in Neil's rather cynical view that this has been timed so as
to 'bury the bad news' amongst all the other bad tidings of job
losses.

Lastly, best of luck what with the jobs review and all that. It would
be distinctly remiss of LU to lose talent such as yourself because of
this shake-up.