In conversation with Andy Lord, Commissioner of Transport for London

1:10 – 1:33

Biography. I think here the thing I would like to say about Andy, having known him as a member of his board now. Well, I’ve been on member of the board for about nine years. Andy took over being the single leader of TFL during the COVID pandemic, perhaps the most challenging time anybody could ever take over that. And he’s, I think, an amazing leader.

1:33 – 1:45

So I’m really pleased that we’ve got Andy here with us. So he and I are going to have a conversation, then we’re going to open it up for a little bit of Q and A on the iPad. We might do a bit of hands up, but please join me now in welcoming Andy Lord.

1:53 – 2:12

Great, thank you. Thank you very much. So, Andy, let’s start with some good news. I was thinking that, you know, we celebrated 160 years of London’s underground railway, the city that invented the underground railway. Just recently, you were part of the big celebrations.

2:12 – 2:37

But the big celebration now is 25 years of Transport for London. 25 years seems really amazing and I suppose the question is, what have we learned about how to create, run, operate and lead an integrated transport authority in a big city? Thanks, Greg. Good afternoon, everybody, and thank you very much for still being here at 5 o’ clock for the graveyard slot. Appreciate that.

2:39 – 3:10

Look, I think I’m incredibly honored to lead tfl. We are, depending on what measure you use, the largest integrated public transport authority in the world. We have the most diverse offerings in that proposition, everything from the Tube through to cable car and cycle hire, and of course, London’s strategic road network. So I think in terms of the things we’ve really learned, it’s the really obvious things. Transport is at the heart of the economic growth and success of the city.

3:11 – 3:33

You look how London has grown over the 25 years that TFL has been in existence. That is down to the fact that we have a fully integrated transport system. We’ve continued to invest in that transport system. We’ve used our innovation to create new products and new services. Last year we celebrated the 20th anniversary of the Oyster card.

3:34 – 4:21

TFL was the organization that created Contactless. If only we’d put a patent on it and 01p for every transaction, we wouldn’t have any funding issues. Now, we’ve continued to grow our offering by the London Overground extension to Barking Riverside, the Northern Line extension down to Nine Elms and Battersea, which have enabled the regeneration of those parts of the city, and of course, the Elizabeth Line, which is truly amazing and has led to more people using public transport than previously they did. 30% of all journeys on the Elizabeth Line are new journeys to public transport and the economic benefit that that has driven has been really phenomenal. So for me it’s around having everything under one controlling authority.

4:21 – 4:47

Of course we also have planning powers, which is quite unique and again enables us to really play a role in terms of the jobs, housing and wider economic growth. So, yeah, I think we should be incredibly proud of what TFL’s achieved over the last 25 years. I’m really optimistic and excited about the next 25. Yeah, fantastic. And Graham Craig of course was here this morning as well and spoke about places for London and what we’re doing there now.

4:47 – 5:24

Other parts of the country occasionally look at London in a jealous way and many of them are trying to create an integrated transport system for the first time. What have we learned at TFL that’s useful for the rest of the country? Well, I’m a proud Northerner, born and bred up there, but now spent more time in London, so I’m now proud adopted Londoner as well. So I got a foot in both camps and I know how poor public transport has been over the years and is compared to what we have in London. So that’s why it’s so important that the other city regions are now really investing in their transport offering.

5:24 – 5:55

And it’s not a competition between London and Manchester or the West Midlands or Newcastle, wherever it be. So we have really helped use our experience to help them grow. So we’ve played a big role in supporting the Manchester team with the bus franchising rollout, for example. They’ve learned from the mistakes that we have made over the years. We’ve enabled them to really do a really smooth rollout of a very successful model which they’ve adapted for their needs and their market.

5:55 – 6:18

So there’s real opportunities to share that learning. But the biggest thing we have to learn from is you can’t run a massive infrastructure organization without proper capital investment. And you will have seen the previous government gave funding agreements to the city regions. In fact, they called them London style funding agreements, which is fantastic. Very supportive of that.

6:18 – 6:35

What we now need is a London style funding agreement for London. Very, very good point. Let’s come on to that then, Andy. So, I mean, there’s a lot in the newspapers about TFL’s funding and finances. I’m privileged to see that information regularly as a board member.

6:35 – 7:13

But maybe it would be a good idea just to start by telling people where we are on our road to financial sustainability overall. And then I think it would be very interesting to say what you think the case is for attracting more capital investment into tfl. So we have quite a unique funding model, both compared to other major transport organizations. On the global comparison, we don’t receive any operating income or revenue subsidy from central government. We do of course, receive income from retained business rates from the GLA and an element from council tax precept.

7:14 – 7:41

But the vast majority of our income comes from what we call the fare box. So the fares that passengers pay to use our services pre the pandemic, that was about 75% of our income. The pandemic absolutely decimated that for us. We went down to 5%, which is why we had to have emergency funding from the government. If we had not kept the transport system running during the COVID pandemic for key workers, we, we would have had a really, really dire situation.

7:42 – 8:12

In London, 100,000 NHS workers were using the tube and bus network during the height of lockdown one. So if we’d not been providing those services, it would have been really significant consequence. But that’s forced us to think differently around how we fund and what we have to prioritise. So we pulled together what we called our financial sustainability plan. How we could make sure that we could come off government revenue subsidy and how we could cover the cost for operations ourselves.

8:13 – 8:48

And that’s taken a huge amount of work through growing our ridership, growing our passenger income, growing our revenue and income from other sources. So that’s through either our property company places for London or through our commercial and advertising revenue. And last year, for the first time in our history, and for the first time for any major transport authority in the world other than Hong Kong, we covered the cost of our operations and achieved an operating surplus. That is a remarkable achievement. And we’re on track to do it again this year, which means we don’t need government support.

8:48 – 9:23

What the government did recognise previous government and now the existing government, is that we can’t necessarily fulfill all of our capital needs, particularly for major asset renewals, such as rolling stock, such as major signalling programs, or for new lines. And that’s why we’re making the case successfully to the last government. For some elements. We got agreement with the current government as part of the budget for £485 million of capital funding for this financial year. That’s about 20% of our needs, because we can cover the rest of it ourselves.

9:23 – 10:34

And we’re now making the case for, for getting our budget approved by our board, hopefully next week for a third year operating surplus and to get a long term capital funding settlement from the existing government as part of the comprehensive spending review. So if we can continue to grow our operating surplus, every pound of that surplus is reinvested back into our assets, our customers and our colleagues to make sure that we continue to improve the transport network. I’m going to take a moment just to say this is a really extraordinary achievement and I don’t know if everybody in the room is clear about what Andy said, but what he’s saying is all of the revenue that comes from the farebox and everything else is sufficient to cover all of the operating costs with no subsidy, which is really quite extraordinary by international standards. The Delta is the capital investment in the rolling stock, the assets, the new lines and everything else which every other major world city receives subvention from, you know, from taxpayer from higher tiers of government. So it’s a remarkable achievement and sorry Greg, just to give you some quantum on that, our cost base is about £10 billion.

10:35 – 10:53

So our income is about £10 billion. So these are big numbers and any perturbation in that is significant. So this year we continue to grow our passenger growth. We’re about 92, 93% of pre pandemic levels but it’s grown at a slower rate than we’d forecast. So we had forecast 6%.

10:53 – 11:35

It’s going to come in just under 2%. That’s about a 250 million pound impact to us and again we’ve managed to offset that and we’ve saved on a recurring basis over £1.6 billion out of our cost base over the last six years or so. Andy, before we go on to what is the next question we agreed we’d discuss, which is the national economic impact, I just want to dwell a bit on what you’ve just said, if we may. Since you became the Commissioner, I think that it’s been very clear that you’ve brought a kind of people leadership, business leadership and commercial acumen to the whole thing. You focused an awful lot on the customer experience and winning the customer rather than simply providing a service.

11:35 – 11:59

You focused an awful lot on driving out cost where it was not necessary. You’ve also focused a lot on leading the talent of the organization. I mean, just if you don’t mind saying a little bit about what are the ingredients that’s led TFL to have that sustainable financial model. Thank you first of all for the comments. I think my background is operations and engineering.

11:59 – 12:30

26 years in British Airways where, you know, safety, customer and colleague were really drilled into you as being the priority. So the first thing was around making sure we really make TFL a great place to work. If we can improve the experience for our colleagues, we can improve our diversity and inclusion, we can make people really feel valued, then they are going to be in a better place to offer a better service. The second thing we’ve done is we restructured the business about two and a half years ago. We used to be what we call modal.

12:30 – 13:20

So the tube was run as one business, the surface transport was rather than a second. We brought that all together under one operation, under a chief operating officer. And we have a fantastic leader in operations, lady called Claire Mann, who joined us a year ago, Southwestern Railway. And she is really focusing on how we bring all our operations together as one team so that when you use our network it doesn’t matter if you’re using the Tube or using the bus or using the cable car, everybody should be able to help you and support you and do that in a proactive way. We’ve still got a long way to go, but if we can do that and everybody has a great experience, then they will tend to use the network again and tell people that the public transport system is good and equally give them alternatives and give them options instead of choosing to use their car or other modes.

13:20 – 13:36

So that’s really important. The other bit has been around really challenging the way we operate as a business. How do we drive our inefficiency? We haven’t had a single redundancy in those cost savings we made. That’s again a remarkable achievement.

13:36 – 14:18

But it also shows that the opportunity that we found in terms of changing the way we work, also working with our supply chain, making sure that we can have more effective commercial arrangements. That’s why a long term capital funding agreement is so important because that will give certainty to our strategic partners and everybody we work with to really make a long term plan and give us the talent development and the skills that we need to continue to grow over the years and all of that underpinned by making sure we deliver safe and reliable and efficient services. That’s really been the bedrock behind it. Great, thanks very much Adi. Two more questions from me and then we’ll try to take some from you.

14:18 – 14:37

So next question is this. I mean it’s very clear that TFL has a massive impact on on the performance of the London economy. It’s what enables the labor market, the housing market, the clustering and everything else that goes on. But it’s also becoming very visible that TFL has a big economic impact on the national economy and the other regions. So what have we learned about that?

14:37 – 15:22

What’s the story? So as we were coming back out of the pandemic and we were having some quite challenging conversations with the previous government around why we did need the investment we need and why it wasn’t London versus Manchester versus another geographical part of the country, we. We quite quickly worked out that actually there’s an awful lot of our expenditure is going into other parts of the UK economy. So we commissioned a independent piece of research by a company called Hatch that established that a huge amount of the money we were spending was going to enable jobs outside of London, the Southeast. We’ve just launched last month what we call Hatch 2.

15:23 – 15:54

So to give you some numbers on that, over the last two years we’ve spent £12 billion in the UK in our supply chain and in services that we procure. That has led to the direct employment of over 100,000 jobs, more than half of which are outside of London and the Southeast. So investing in TFL is resulting in investment in the wider uk. Some high profile things in there. The new trains for the Piccadilly line being built in a new factory in Goole in East Yorkshire.

15:54 – 16:17

Our buses, the vast majority of them are built in either Falkirk or Ballymena. So enabling jobs and growth in Scotland and Northern Ireland. And then we also focus on small and medium enterprises. So half of the signage that you see on the Tube, which is very specific, is procured by a family business called A.J. wells on the Isle of Wight.

16:18 – 16:40

So we really spread far and wide. And a huge number, about 30% of those organizations are small medium enterprises as well. So it’s not just about big contracts with big global suppliers, it’s also about making sure that we invest across the board and do it also with companies that are really focusing on decarbonisation as well. Great, fantastic. And I’m so glad that we’ve got the data on this now.

16:41 – 17:09

And you can see that the number of jobs, particularly in the north of the country, in Scotland, in Northern Ireland, Final big question for me is about the Elizabeth line. You mentioned earlier what a game changer it’s been. I mean, as far as I’m aware, but you’ll correct me if I’m wrong, it’s the first bit of TFL fully operated kit that goes out of London to the east and out of London to the west. It’s a proper regional railway. Congratulations on more than 500 million journeys, I think, is the number.

17:10 – 17:37

What has been the secret of Success of the Elizabeth Line? Well, great question. I mean, I think it really is around its connecting communities that weren’t connected before. It’s connected to significant parts of national rail infrastructure that were very difficult to move between previously. We clearly have brand new infrastructure through central London with fantastic stations which have capacity, capacity for the future.

17:38 – 18:16

And then we provide critical services in terms of links into Heathrow out to Reading in the West. It’s a high frequency metro railway in central London, 24 trains an hour, so one every two and a half to three minutes. We’re carrying now, on average 750,000 passengers a day with the highest satisfaction scores of any mode in tfl. And regularly it’s one of the top three performing railways in the country for performance. And when you put that into context, because there’s a lot of stats and information around Elizabeth Line is being compared to entire train operating companies.

18:16 – 19:08

When the performance stats are being produced, we are one rail line operating the highest frequency service of any other mainline rail line in the country and doing it in a way that also involves the complexity of trains automatically switching within a thousandth of a millisecond between different signaling systems. So it’s hugely complex. It’s run by an incredible team who do a great job working in collaboration with Network Rail on both the east and the West. And I think it’s just the greatest example of when you invest in infrastructure and public transport, it makes a real difference and it’s delivering over 42 billion pounds to the UK economy as a result. There’s something, I forget the numbers, but there’s staggering number of homes that have been built within 1 km of the railway and it’s driving jobs and growth across the wider Southeast.

19:08 – 19:21

It’s literally changed the geography of the Southeast. And all for the cost of less than £20 billion. Pretty good investment, huh? I’m not seeing any questions on slido, which either means we’ve got it wrong. So we’re going to do some hands up.

19:21 – 19:31

Fiona, we’ll start with you. Have we got Mike microphones, Kat. Thank you, Fiona. If you keep your hand up, the microphone will come to you and we’ll go over. You’ve had so many questions.

19:31 – 19:46

I may take you third or fourth, if that’s okay, Fiona. Thanks, Andy. Congratulations. Sounds like a really big achievement, what you’re doing at tfl. Graham was saying this morning he spends more time talking to cities out of the uk, not to regional parts of the uk.

19:46 – 20:13

I’m sure there’s lots of people here today that work in regional parts. Of the UK and like SMEs that want to work in the rail space, what can you say to them about how they can go and approach regional authorities or cities and do and copy what you’ve done in London in regional parts of the country? So I think the biggest thing is the fact the. There’s more devolution now to the regional mayors. They have seen what London has achieved.

20:13 – 21:03

So you look what Andy Burnham’s doing in Manchester, you look what Steve is doing and Steve Rotherham is doing in Liverpool, they want to use the London model. So anybody who thinks they have a part to play or have an opportunity for those organizations, they should just reach out to Vernon Effort, who’s my counterpart in Manchester, for example, to say, how can I get involved, how can I help, how can I support? The other way is through. There’s a number of industry fora for the bigger supply chain in rail, there’s the Rail Industry association for the small medium enterprises and rail, there’s a rail forum as well. So those organizations are all linked in to big transport providers, the city regions, and they can provide contacts and support into there as well.

21:03 – 21:13

Great. Let’s see some more hands. Sorry, can I, can I, can I have gentlemen, please? No, I’m going to. I want to take this one over here, then we’ll come there.

21:13 – 21:16

Thanks. So, gentleman with the beard, keep your hand up.

21:19 – 21:35

Sorry, I’m going to be a bit choosy about who gets the mic, so. Thank you. Hey, it’s great to hear all the investments that you guys are doing and helping the economy grow. But I have one simple question. Why is the cost always rising of public transport?

21:35 – 22:04

I know it’s quite a difficult topic, but it’s not cheap, it’s quite expensive and every year it’s pretty much going up. When will it end? So it’s a great question from a London perspective. As I said, we don’t have any government subsidy whatsoever for the operating account. So if you look at every other major public transport authority in the world, they receive some form of government funding, which is why their fares are low.

22:05 – 22:31

We have to pay for the investment in our public transport services. And actually the fares on our buses were frozen again this year. We have the lowest bus fares in the country, 1 pound 75. We have the hopper fare, so you can use as many buses as you’d like within an hour and you only get charged one fare. And it’s about making our system as affordable and accessible as possible.

22:33 – 23:02

So that’s what’s really important on the national Rail side, the government are trying to reduce the level of subsidy, but it is about. We’ve got to make our networks more efficient. You’ve heard some of the numbers I’ve talked about today. We don’t want to put the fares up every year, but we have to pay for the renewals and the replacement assets across the railway. So to give you some examples, new Piccadilly line trains will be coming into service over the next two years.

23:02 – 23:21

We’ve got new fleet on the dlr. These trains will be transformative for the customer walk through air conditioned, live customer information, adding capacity to the lines. That will really transform why people will the experience that people have when they use them. Behind the scenes. There’s a lot going on which people don’t necessarily see.

23:21 – 23:40

So we are re signaling. We’ve resignalled already. The Metropolitan, sorry, the Circle and the Hammersmith and City lines done most of the District and the Metropolitan lines. That’s almost invisible to customers. But as a result, we brought in new timetables which have reduced the journey times and increased the number of trains operating through Central London.

23:40 – 24:11

And if we didn’t have the fare income that we had, we just simply wouldn’t be able to pay for that and we wouldn’t be able to continue to invest in the network. And if we don’t invest in it, reliability will drop, safety issues will arise. That will mean we’ll have to take further action to reduce service. And that is the last thing that we want. So we recognise that our two fares are high, but that’s because we don’t receive any revenue subsidy and we don’t want to, frankly, because if we do that, the taxpayer.

24:11 – 24:28

You will still be paying for it, you just won’t be paying for it at the Gate line. You’ll be paying for it out of your taxes. So I think that’s the other way people need to look at this. Yeah. So if you’re in Vienna and you pay €1 a day when you enter the train, you’re paying €5 a day in your tax bill.

24:29 – 24:38

So we are going to take you, sir, you’re going to get the microphone next. Thank you. Thanks for being patient. Steve Barry from Ngoka. A bit of a cheeky question.

24:39 – 24:48

I’m over 60, my wife just turned 60 and we reckon we save £6,000 a year. Is it a bit too generous?

24:50 – 24:52

Should we put this to a vote, Andy?

24:55 – 25:26

Great, great question. As you can imagine, one with quite a number of connotations. So I’ll start with the complete default answer, which is the Setting affairs is absolutely the decision of the mayor. Concessions is a hard fought conversation during the pandemic between the government and the mayor. The over 60 concession was actually brought in by the previous mayor who then as prime minister tried to put pressure on the current mayor to get rid of it.

25:26 – 25:51

Funny that, isn’t it? So if I was completely honest, what I don’t think is necessarily great is the fact that people are in full time employment over a certain salary range, have this ability and have this concession. And I think that is something that I think needs to be considered. That’s my own personal view by the way. So I do think we need to consider that.

25:51 – 26:24

But we have to recognise there’s an awful lot of people over 60 where this concession is life changing for them. It enables them to use the public transport network when they otherwise wouldn’t, enables them to get to hospital appointments without having to pay for for taxis or anything like that. So I think overall it’s the right thing to do. But I think there are things that we need to seriously look at in the long term around whether or not there are changes or tweaks that perhaps need to be made very, very fair. And I think another cheeky answer from me would be make sure you spend lots of money in London when you’re enjoying your free transfer.

26:24 – 27:06

I’m going to take one more question from Eleanor and bring all your family who are under 60. Yeah, thank you. Eleanor Williams Connected Places Catapult I live in North London, but I am a very proud born and bred South Londoner and South London historically sort of underserved by the underground. And you’ve said quite a bit about the kind of economic benefits that come from having kind of transport nodes in our towns and cities. Can you say a little bit about the capital investment, a bit more about the capital investment that’s required in order to deliver those gains to the kind of area that are underserved within London.

27:06 – 27:34

Yeah, no, sure. So I think most people know this, but actually it’s surprising how many don’t know this. The tube is primarily north of the river and that’s entirely down to the geology of the city. Most of the geology south of the river is shale and gravel and holds an awful lot of water, so it’s incredibly difficult to tunnel through. And actually the Jubilee Line extension was the first real big tube to be built south of the river.

27:34 – 28:20

Obviously there’s elements of the Northern Line and others. The technology now exists, it’s not cheap, but we are looking at further growth schemes. So for example we are making the case as part of our submission to the government around extension to the DLR to Thamesmead, about a three kilometer extension under the Thames, stationed on the north of the river station on the south of the river, with a bus rapid transit scheme that would also then connect to Elizabeth Line Abbey Wood, that would deliver 30,000 homes, 10,000 jobs. Improved connectivity in the last Brownfield site in southeast London, Bakerloo Line extension down to Lewisham, ultimately potentially out to Hayes. Using existing rail infrastructure.

28:20 – 28:56

We’re making the case to government around that again, about 20,000 homes and significant jobs. And then West London, the London Overground, West London Orbital, extending that round from Hounslow, Old Oak Common up to Brent Cross. So three big new schemes there and then on top of that, we’re looking at what more we can do with the bus network. So how could we grow the best bus network in outer London, particularly in the southern boroughs, where, you know, provision of rail services is not, not as strong. So they’re the sort of key elements of our growth plan.

28:57 – 29:13

Great. Andy, we’ve kept you a couple of minutes over what we promised. You’ve told us about the 500 million people who’ve taken journeys on the Elizabeth line. 25th anniversary of TFL financial sustainability. Thank you so much for joining us.

29:13 – 29:16

It’s been real inspiration. Ladies and gentlemen, Andy Lord.

29:47 – 30:15

Right, so we’re at the end of two amazing days. Thank you for coming, for listening, for sharing your experience. The Buzz has been amazing and I hope you’ve enjoyed it as much as I have. We’re going to have a go at a Word Cloud, I think. SHE says, looking oh, yeah, we are definitely going to have a go at Word Cloud.

30:15 – 30:28

So I’m asking you the question, what was the one word you would use to describe your experience at the summit? I’m going to give you some of mine while you start thinking. I’ve heard today. Hope I like that. And optimism.

30:29 – 30:32

Trust energy.

30:34 – 31:04

Data, data. Data comes up quite a lot. I’m going to go back to some things I talked about yesterday, procurement, standards. Anyway, while you do that, I just want to go back to the Buzz and give you a few more reflections as the Word Cloud builds. I opened yesterday saying that you are our greatest resource and the buzz that’s been here.

31:04 – 31:57

I just wanted to say, this is not us, this is all of you. And I’ve been listening a lot to our partners and SMEs and exhibitors, et cetera today and I’ve heard loads of things I wanted to pass on here. We are the enablers, the conveners, the sharers, the campaigners, the backers, the people you can come to to try out your ideas, the people you can talk to in the roller coaster ride of business growth. I’ve been really reminded today that it’s human beings that run SMEs and they get down sometimes and they want to talk to people like us who can say, yeah, give it a bit of a go, you’re going to get there. We’re the people who can introduce you to the right people in network rail or national highways or maybe DCIT or a government department.

31:58 – 32:15

We’re the people who encourage you to transfer your ideas to a new market. Try road, try rail, try the built environment. And we do all of this, but this is all about you. And I’m going to close with the word cloud. Let’s just have a little look at it.

32:18 – 32:27

So. Oh, oh. Thought provoking, collaboration, partnership, innovation, connections, data. Fun. Good, tasty food.

32:27 – 32:28

Love that.

32:30 – 32:36

Always good food. I’m sure you’ll tell your friends at the Connected Places Summit.

32:38 – 32:52

Innovation is definitely coming up. Multimodal. Good, great networking, well organized. Thank you. That’s definitely down to my wonderful team.

32:55 – 33:18

Great. I’m going to let you continue. I’m not going to keep you any longer from the drinks that are outside. I just want to finish by saying again, a massive thank you to all of you for coming to participating, to the wonderful team that’s done all of the organizing, for all of the talking. You know where to find us.

33:19 – 33:24

Please reach out and we’ll be here to work with you. Thank you very much for the last two days.