City Hall Desk

Mayor Johnson policy to reintroduce the Routemaster bus to London is in serious doubt following an independent study that has found that it will cost significant extra amounts of money at a time when London is experiencing its worst recession in a generation.

KPMG the accountants in their report have also said that fares would have to go up and a reduction of services would need to take place to "hold down costs".

The current levels of unemployment in London and the recession will mean that the public subsidy invested into the bus network will rise "from £653m to £766m by 2017".   The Routemaster it was noted was not included in these calculations.

Other analysts like Deutsche Bank have predicted fares will need to go up by 11% to bankroll the Routemaster and would require an extra 3,000 staff, and a cost of £250,000 for each new bus.  This would be represent a significantly more expensive proposition to London than the existing "bendy buses" which are being phased out.

TfL have reacted angrily to the above report with the following statement:

A TfL spokesperson said: “The Mayor made a manifesto commitment to deliver a new bus for London, and TfL is well on the way to delivering it.  TfL’s Business Plan includes funding for the design and development of the new bus for London, which will go into service from 2012. 

“The KPMG report is a thorough and detailed review of how London’s bus service is delivered.  It underlines the fact that London has one of the best, most efficient and extensive bus networks anywhere in the world, carrying over 2.25 billion passengers a year on 8,500 accessible and increasingly cleaner, greener buses. 

“The report makes a number of detailed recommendations which we are looking at closely and will implement where practicable in our management of the bus service.

“TfL continues to strive to provide the best value for tax and fare payers’ money.  We’re already delivering a programme of savings and efficiencies across the organisation, including within London Buses, of at least £2.4bn and we will continue to seek further efficiencies in future.”

Funding for new buses

We already have funding set aside in our business plan for the design and development of the new bus.

London’s bus fleet is constantly being renewed, and the average age of buses in the fleet being six years old.  Over 500 new buses join the London fleet every year, and from 2012 a proportion of these will be the new bus for London as opposed to another design of bus. 

We don’t expect these new buses to cost significantly more than a new hybrid bus, which we hope all new buses in London will be by 2012, so we haven’t set aside separate funding in the business plan for this – when we have chosen which routes the new buses will run on, bus operators will be invited to bid for the contracts to run those routes in the normal way.  The cost of buying the new buses will be built into their bids for those contracts, which is standard practice here in London.  The KPMG report does note that the competitive tendering process we use in London helps to keep costs down.