Wednesday, 23 September 2026

Investigating How 'Value for Money' Impacts Public Transport Services

Some of my readers may have noticed I posted on social media about my communications with Transport for London (TfL) regarding my suggestion to improve their bus network with more express routes, reviving the Speedbus proposal from the 1970s, and increasing cross-boundary bus routes.

This is their response, embedded below:


I have also sent them links to my articles; they are:

Suggestion: Transport for London Should Revive the Old Speedbus Proposal From the 1970s as Part of Phase 2 of the Superloop

The case for enhancing cross-boundary bus services for London and the Home Counties to end the postcode lottery

First Bus Essex Unveils Cross-Boundary Extension of Route B1 to Harold Wood Station – Launching Sunday 26 July 2026

Bear in mind, I had some assistance with AI to help me with the research for my article, especially as finance is not my field.

TfL Bus Service Planning Principles

Taking a look through TfL's Bus Service Planning Guidelines.

On page 7, it says:

"Our bus service planning guideline principles

We use five principles to plan service changes to the bus network
PNG

• Inclusive network: Serving people of all backgrounds in all locations across London, taking people where they want to go.
• Reliable network: Services that arrive when expected getting people from A to B quickly and consistently.
• Frequent network: Providing regular services for Londoners and high frequency services where demand justifies them.
• Simple network: Planning services that are easy to understand and integrated with other public transport services and active travel.
• Financially sustainable network: Allocating available resources where they're needed most, providing the best value for money available from fares and funding.
"

Then on page 13, it says:

"Financially sustainable network

Allocating buses where they are needed most and where best value can be achieved

Objective
To provide the best bus network for passengers from available revenue and funding, buses need to be allocated where they are needed most and where best value can be achieved.

Business cases including cost-benefit analysis are used to develop service change proposals.

Why does this matter?
Demand patterns in London evolve over time and for many reasons. For example: new housing development, changes to population density, or people changing their method of travel due to new services, such as when the Elizabeth line opened.

Our bus network needs to be constantly checked to maintain required reliability, capacity, and connectivity along with network coverage for Londoners. This needs to be balanced against our budget and what we can afford. Overall, this maintains the sustainability of the network Londoners depend on.

Guidelines
Our bus network is regularly reviewed using demand data for all bus routes, checking demand matches capacity at the busiest point, time, and direction. We also look at long run expected costs and revenue.

For given peak capacity at a set frequency of buses on a route, the marginal cost of using those buses throughout the day can be relatively small compared to the benefits they provide to Londoners. They also generate revenue. Therefore, it may be worthwhile to run additional frequency throughout the day utilising existing buses.

Proposed changes are analysed by reviewing the cost of running a service compared to passenger usage and benefits. This is used to estimate the benefits (or disbenefits) to passengers in terms of changes to travel, access, waiting and interchange times. This will consider knowledge of the way demand varies, in time and in location. These benefits are then set against the cost of provision, in a social benefit and cost framework.

All service changes should secure the best overall value with proposed changes following TfL business case guidance alongside the other four guiding principles set out above.
"

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TfL Financial Deficits and Statutory Constraints

Transport for London's planning guidelines operate within strict budgetary constraints. Although TfL initially targeted a £5 million operating surplus for 2026/27, recent figures forecast a £128 million deficit. This shift is driven by passenger income falling £118 million below budget and an £85 million increase in essential capital renewals. Because service changes require a business case to prove value for money, new or extended routes must justify their costs against these financial realities. For cross-boundary services, this is further complicated by the need for joint-funding agreements with neighbouring local authorities, as TfL cannot single-handedly fund operations outside Greater London.

As a statutory functional body of the Greater London Authority, Transport for London cannot legally go bankrupt or enter commercial insolvency. Instead, if TfL cannot balance its budget, its Chief Finance Officer is required under Section 114 of the Local Government Finance Act 1988 to issue a formal report. This statutory mechanism freezes non-essential expenditure and forces the Mayor of London to agree remedial measures to restore financial balance. Existing contractual commitments remain binding, ensuring public transport services continue operating while financial intervention is arranged.

Legislative Mandates Under the GLA Act 1999

Then here's Section 141 of the Greater London Authority Act 1999, which states:

General transport duty.

(1) The Mayor shall develop and implement policies for the promotion and encouragement of safe, integrated, efficient and economic transport facilities and services to, from and within Greater London.

(2) The powers of the Authority under this Part shall be exercised for the purpose of securing the provision of the transport facilities and services mentioned in subsection (1) above.

(3) The transport facilities and services mentioned in subsection (1) above include facilities and services for pedestrians and are—

(a) those required to meet the needs of persons living or working in, or visiting, Greater London, and
(b) those required for the transportation of freight.


Then the words efficient and economic are repeated in Section 181, which states:

The London bus network.

(1) Transport for London shall determine which London local services are required for the purpose of providing safe, integrated, efficient and economic transport services in Greater London.

(2) The determination made by Transport for London under subsection (1) above shall be kept under review and may be revised at any time.

(3) The London local services which Transport for London determines are required under this section shall be known collectively as the London bus network.

(4) A London local service which is part of the London bus network may be provided only—
(a) by Transport for London or any of its subsidiaries, or
(b) by any other person in pursuance of an agreement entered into by Transport for London under section 156(2) above or in pursuance of a transport subsidiary’s agreement.

(5) Transport for London shall so far as reasonably practicable provide or secure the provision of the London bus network.


The Historical Origin of 'Value for Money'

The term 'value for money' was first mentioned in the Ridley Plan, which was published in 1977 by Conservative MP Nicholas Ridley, outlining how he proposed the next Conservative government should privatise the nationalised industries of Great Britain.

Here's the text with the words mentioned:

"Uneconomic Activities

Whenever an industry considered it was being asked to undertake uneconomic activities (rural telephone kiosks, branch or commuter railway services, uneconomic pits, steel mills, etc.), it would be open to it to apply for a specific subsidy from government, if government wanted it continued. If Government refused, the activity must either be fully charged for or be discontinued. The industries should be required to keep proper accounts and show the results on each of their activities, including the losses on uneconomic ones. This policy could lead to undesirable bargaining situations, but the advantages of identifying and quantifying the loss-making activities would outweigh this disadvantage. If it could be seen publicly how much we were paying for what, there would be more informed public debate about whether we were getting value for money.
"

Conservative Manifestos of 1979 and 1983

It was then made policy in the 1979 Conservative Party manifesto for the general election in which Margaret Thatcher became Prime Minister after the Tories won a majority in the House of Commons.

Here's the text from the manifesto:

"Better Value for Money

Any future government which sets out honestly to reduce inflation and taxation will have to make substantial economies, and there should be no doubt about our intention to do so. We do not pretend that every saving can be made without change or complaint; but if the Government does not economise the sacrifices required of ordinary people will be all the greater.

Important savings can be made in several ways. We will scrap expensive Socialist programmes, such as the nationalisation of building land. We shall reduce government intervention in industry and particularly that of the National Enterprise Board, whose borrowing powers are planned to reach £4.5 billion. We shall ensure that selective assistance to industry is not wasted, as it was in the case of Labour's assistance to certain oil platform yards, on which over £20 million of public money was spent but no orders received.

The reduction of waste, bureaucracy and over-government will also yield substantial savings. For example, we shall look for economies in the cost (about £1.2 billion) of running our tax and social security systems. By comparison with private industry, local direct labour schemes waste an estimated £400 million a year. Other examples of waste abound, such as the plan to spend £50 million to build another town hall in Southwark.
"

Then here's the 1983 manifesto:

"Local Government: Saving Ratepayers' Money

We have checked the relentless growth of local government spending, and manpower is now back down to the level of 1974. The achievement of many Conservative authorities in saving ratepayers' money by putting services like refuse collection out to tender has played a major part in getting better value for money and significantly reducing the level of rate increases. We shall encourage every possible saving by this policy.
"

[...]

"The Metropolitan Councils and the Greater London Council have been shown to be a wasteful and unnecessary tier of government. We shall abolish them and return most of their functions to the boroughs and districts. Services which need to be administered over a wider area - such as police and fire, and education in inner London - will be run by joint boards of borough or district representatives."

"Public Transport

The GLC has grossly mismanaged London Transport. We shall set up a new London Regional Transport Authority for the underground, buses and commuter trains in the London area. This will provide the opportunity to split the different types of transport into separate operating bodies, put more services out to private tender and offer the passenger better performance.
"

Evolution into Statutory Law (1983–2023)

Following its election win, the Conservative administration used its House of Commons majority to update public spending legislation. The statutory foundation for Value for Money (VfM) across central government originated in the National Audit Act 1983, where Section 6 empowers the Comptroller and Auditor General to examine departmental resource efficiency without questioning policy merits. Section 7 extends these checks to grant-funded bodies, whilst Sections 8 and 9 govern Parliamentary access and reporting. A corresponding legal duty was later applied to local authorities under Section 3(1) of the Local Government Act 1999, introduced by the Tony Blair Labour administration as part of its Best Value framework.

The framework expanded beyond pure financial costs through the Public Services (Social Value) Act 2012, introduced under the David Cameron Conservative–Liberal Democrat coalition government. Section 1(3) requires public authorities to consider and secure local economic, social, and environmental improvements through procurement, provided these requirements remain proportionate and relevant under Section 1(6).

Most recently, the Procurement Act 2023 consolidated these principles into modern practice. Section 12(1) enshrines statutory duties to deliver value for money, public benefit, transparency, and integrity, cementing whole-life costing as standard practice. Additionally, Section 19 replaces Most Economically Advantageous Tender (MEAT) with Most Advantageous Tender (MAT), allowing buyers to formally evaluate broader value alongside direct costs.

Modern Value for Money and Bus Franchising Frameworks

Looking briefly at HM Treasury's Green Book, it includes the following definition:

"Box 1. Definition of value for money

Value for money is the balanced judgement about the optimal use of public resources to achieve the objectives of a proposal. This judgement is based on consideration of the following factors:

• The performance of a proposal against its objectives and critical success factors, noting that options failing to deliver objectives cannot represent value for money.
• The monetisable costs and benefits to society expressed in monetary terms.
• The unmonetisable costs and benefits to society.
• The direct public sector financial impact of the proposal.
• The distribution of costs and benefits among different social groups and places.
• The inherent risk and uncertainty in achieving objectives.
"

Taking a look through the UK government's guidance on setting up a franchising scheme regarding cross-boundary bus services (excluding service permits), though this relates to services outside Greater London:

"Setting up a bus franchising scheme

The franchising scheme

Where a franchised area also adjoins another area, the LTA should discuss with the other LTA(s) and its operators the effects of introducing an adjoining franchising scheme and how to avoid adverse effects to passengers, particularly on cross-boundary services.

The commercial case

The extent to which the authority is likely to be able to secure that local services are operated under local service contracts.

This is required under Section 123B(3)(f) of the 2000 act and is the commercial case. The purpose of this section is to demonstrate that the authority has a commercially viable approach to franchising and will be able to secure the franchised services in an affordable and cost-effective manner.

In particular, the authority should explain in this section of the assessment:

• how the authority will facilitate cross-boundary services to deliver relevant outcomes and targets in both authorities’ areas
• how the service permit system will be used to enabled cross-boundary (and if relevant other) services to operate, including the conditions expected to be attached to permits"

To draw a comparison with other cross-boundary bus routes on the London Bus network, these routes extend beyond the M25 and are jointly subsidised by neighbouring councils.

[image or embed]

— CLondoner92 (@clondoner92.bsky.social) September 19, 2026 at 11:29 PM

Cross-Boundary Challenges and the Case of Route 375

While the DfT's guidance on 'Setting up a bus franchising scheme' applies to Local Transport Authorities outside London under the amended Transport Act 2000, its treatment of cross-boundary services highlights a critical gap. LTAs bordering Greater London are directed to coordinate with neighbouring bodies to avoid adverse effects on cross-border passengers. However, because TfL operates under the GLA Act 1999 rather than the Transport Act 2000, seamless cross-boundary connections require active, voluntary co-operation and joint funding mechanisms between TfL and Home Counties councils.

The current situation is much more complicated for TfL because it requires negotiation and agreements with neighbouring councils in the Home Counties to finance bus services crossing into their boundary.

As the A113 (London Road and Romford Road) is not served by local bus services, there is a clear need to extend route 375 to Chipping Ongar, which has a built-up area population of nearly 4,000 (according to the 2021 Census). It is unclear what the cost estimate would be to extend the 375 by nearly 5.6 miles (9 km) to The Four Wantz roundabout as its terminus, but it would provide a direct link to Romford Town Centre for people with mobility issues, especially those unable to drive.

Extending a bus service in this way requires an increased peak vehicle requirement, including additional vehicles and bus drivers, as well as a new timetable to support the service frequency.

My idea is not limited to route 375, as many areas surrounding the Greater London boundary suffer from a lack of adequate bus services.

Just like other sectors of our Critical National Infrastructure that cross boundaries, such as the electricity grid connecting with other countries to secure supply, Great Britain's rail network linking to mainland Europe via the Channel Tunnel, or international airlines and ferries transporting people and cargo, bus services are essential regional infrastructure.

Looking back at TfL's Bus Service Planning Guidelines, the words 'rural' and 'cross-boundary' are entirely absent.

I would also suggest that London TravelWatch update their Crossing the Border publication from 2008 to reflect the current situation regarding cross-boundary bus services.

Proposals for Public Consultation and Structural Reform

Public transport in the UK is too often treated as a simple consumer commodity rather than essential economic infrastructure. Just as national electricity grids or rail tunnels cross borders to sustain economic activity, regional bus networks must be allowed to function as cross-boundary lifelines.

The fact is, not everyone is able to drive due to medical conditions, disabilities, or legal disqualifications.

My proposal includes carrying out a survey to gather ideas for new bus services, accompanied by promotional work to encourage consultation responses from residents and businesses on both sides of the boundary regarding the benefits of new or extended routes.

I would like to see an open forum listing all bus routes, similar to the layout on BusTimes.org, where members of the public can comment (publicly or privately) on bus services and suggest improvements, such as alternative vehicle types to enhance capacity and accessibility or route adjustments. Modern technology makes this entirely feasible.

My broader proposals, such as reviving the pre-1970s London Passenger Transport Area and creating a new regional body subsuming TfL, named the South East Regional Transport Authority, remain my definitive long-term vision. Achieving these reforms will ultimately require primary legislation in Parliament, underpinned by explicit political endorsement.

While structural reform through a Private Member's Bill offers a path to legislative change, navigating backbench legislation presents significant procedural hurdles. Time for debating non-government bills is strictly limited on sitting Fridays, leaving most proposals vulnerable to being talked out through filibustering or blocked by a single MP's objection. Furthermore, bills requiring financial expenditure face immediate barriers, as they cannot proceed without a government-backed money resolution. Without active government support or exceptional cross-party consensus, backbench legislative initiatives rarely succeed in reaching the statute book.

Conclusion

This research does not seek to endorse or challenge the principles of value for money and financial sustainability. Rather, it provides context on how the current legal, statutory and financial frameworks operate. Balancing financial sustainability with statutory transport duties presents an ongoing challenge for authorities. While value for money frameworks govern how public funds are allocated, strict budgetary constraints can affect how wider social and economic benefits are weighed, particularly for cross-boundary links. Addressing these regional gaps, whether through closer local authority co-operation, modern public engagement or statutory reform, remains a key consideration for the future of bus services on both sides of the Greater London boundary.

I would like to extend an invite for you to follow me on X (formerly Twitter) for transport-related updates. You can find me by searching for @CLondoner92 or by clicking on the direct link to my X page here. I am also present on BlueSky and Mastodon. I look forward to connecting with you on these platforms. Thank you for your support.

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