Time is money The economic effects of transport delays in Central London January 2005 Author: Oxford Economic Forecasting Commissioned by: GLA Economics and Transport for London copyright Greater London Authority January 2005 Published by Greater London Authority City Hall The Queen’s Walk London SE1 2AA www.london.gov.uk enquiries 020 7983 4000 minicom 020 7983 4458 Cover photograph © Transport for London This publication is printed on recycled paper. For more information about this publication, please contact: GLA Economics telephone 020 7983 4922 email [email protected] GLA Economics provides expert advice and analysis on London’s economy and the economic issues facing the capital. Data and analysis from GLA Economics forms a basis for the policy and investment decisions facing the Mayor of London and the GLA group. The unit is funded by the Greater London Authority, Transport for London and the London Development Agency. GLA Economics uses a wide range of information and data sourced from third party suppliers within its analysis and reports. GLA Economics cannot be held responsible for the accuracy or timeliness of this information and data. GLA Economics, the GLA, LDA and TfL will not be liable for any losses suffered or liabilities incurred by a party as a result of that party relying in any way on the information contained in this report. Time is money: The economic effects of transport delays in Central London Contents FOREWORD ............................................................................................................................................................................. II EXECUTIVE SUMMARY.......................................................................................................................................................IV 1. INTRODUCTION ............................................................................................................................................................1 1.1 Study objectives....................................................................................................................................................1 1.2 Employee and employer surveys.........................................................................................................................1 1.3 Report structure....................................................................................................................................................2 2. ECONOMIC ISSUES ......................................................................................................................................................3 2.1 The economics of cities........................................................................................................................................3 2.2 The concept and measurement of transport delays.........................................................................................3 2.3 Valuing the cost of transport delays ..................................................................................................................4 2.4 Quantifying the costs of transport delays .........................................................................................................5 2.5 The issue of economic efficiency ........................................................................................................................5 3. TRANSPORT PATTERNS IN CENTRAL LONDON ................................................................................................7 3.1 Central London journeys......................................................................................................................................8 3.2 Journey purpose...................................................................................................................................................9 3.3 Journey time and length................................................................................................................................... 11 4. EXTENT OF DELAYS ................................................................................................................................................. 14 4.1 Underground...................................................................................................................................................... 15 4.2 National Rail ....................................................................................................................................................... 15 4.3 Bus....................................................................................................................................................................... 16 4.4 Cars...................................................................................................................................................................... 17 4.5 Survey evidence ................................................................................................................................................. 19 5. COST OF DELAYS ...................................................................................................................................................... 25 5.1 Overview ............................................................................................................................................................. 26 5.2 Average delay times .......................................................................................................................................... 26 5.3 Putting a value on an hour lost to transport delays...................................................................................... 30 5.4 The overall cost of transport delays to Central London ............................................................................... 32 5.5 Survey evidence: Additional costs of delays .................................................................................................. 34 6. HOW COMPANIES AND INDIVIDUALS ARE RESPONDING .......................................................................... 42 6.1 Location decisions of companies..................................................................................................................... 42 6.2 Location decisions of individuals..................................................................................................................... 43 6.3 Changes in working practices........................................................................................................................... 44 6.4 Response to delays in deliveries and servicing .............................................................................................. 46 7. THE SCALE OF THE PROBLEM AND THE IMPROVEMENTS NEEDED ....................................................... 48 7.1 Views on the extent of the problem................................................................................................................ 48 7.2 Views on improvements required .................................................................................................................... 50 8. CONCLUSIONS............................................................................................................................................................ 52 APPENDIX A: OVERVIEW OF CENTRAL LONDON JOURNEYS .............................................................................. 54 APPENDIX B: SENSITIVITY ANALYSIS ......................................................................................................................... 57 APPENDIX C: GLOSSARY AND ABBREVIATIONS ...................................................................................................... 60 APPENDIX D: OEF SURVEYS’ OVERVIEW .................................................................................................................... 61 APPENDIX E: OEF SURVEYS AND RESPONSES ......................................................................................................... 63 GLA Economics i Time is money: The economic effects of transport delays in Central London Foreword The transport system in London has seen notable improvements over the past four years. However, the process of building a 21st century transport system for a 21st century world city has only just begun. There are still significant costs associated with using London’s transport system and these need to be reduced further if London is to fulfil its growth potential. This Oxford Economic Forecasting (OEF) report, using a methodology which they trialled on the City of London and have now extended to cover the whole of Central London, provides an estimate of the economic losses imposed on current travellers to London’s centre by delays on the transport system. This is not to imply that all such losses can ever be removed or indeed that they should be. A successful city will be crowded. Such crowding imposes costs that people bear because they value the benefits that are the result. But the costs are nonetheless real. Only by understanding what they are, can we balance them against the costs of the investment required to reduce them. Since 2000, the Greater London Authority (GLA), Transport for London (TfL) and the Government have started to address the historic backlog of investment in London. In line with a national policy decision to begin to address the crisis in the UK transport system, the 2000 Spending Review virtually doubled the transport grant