The Costs and Benefits of Devolving Responsibility for Rail Services in London
31 March 2011
By Stuart Holder
A NERA team, led by Associate Director Stuart Holder, was commissioned by Transport for London (TfL) to review the costs and benefits of devolving responsibility for rail services in London to TfL. NERA's report summarizes the existing evidence on devolution from previous NERA analysis, TfL's own calculations, and other sources, and brings this evidence together to show the estimated financial impacts and passenger benefits generated by devolution. TfL would propose taking revenue risk from London train operators, thereby reducing the risk premia included in franchise bids, and generating cost-savings that could be used instead to fund improvements to services. In addition, improved oversight of infrastructure enhancement projects could generate further cost savings. The report also describes different options for devolving powers and how these might work in practice, and sets out their advantages and disadvantages and possible financial impacts.
