Barclays Bank paid nothing toward south-west Boris Bike expansion

London hire bike sponsor Barclays Bank made no contribution to the £10 million cost of extending the scheme into south-west London, despite the continuing presence of its branding on the bikes and docking stations, it has emerged.

Barclays was expected to bankroll the phase 3 expansion of the ‘Boris Bikes’ hire system, but Transport for London has confirmed to the MayorWatch website that no additional funding came from the bank after it decided last year to end its sponsorship in July 2015.

Yet a 2011 press release claimed Barclays had agreed to pay an additional £25 million toward the scheme to extend its support to 2018 and fund the expansion.

That press release was based on a Heads of Terms obtained by MayorWatch under Freedom of Information law. But a deal based on that document never came, despite repeated claims by Mayor of London Boris Johnson that Barclays would sponsor the scheme until 2018.

When it emerged in December that its sponsorship would end in July 2015, the bank said the decision was undertaken as part of a wide ranging review of deals done when Bob Diamond was in charge of the bank and had nothing to do with the recent spate of deaths involving cyclists in London.

With no money coming from Barclays to fund the expansion of the scheme, it has instead been paid for by taxpayers, including a total of  £4.2 million from the boroughs of Hammersmith & Fulham, Lambeth and Wandsworth.

As early as 2012, boroughs were told that the expansion of the scheme was conditional on them making a contribution, raising questions as to when Boris Johnson and Transport for London knew that Barclays was not going to renew its sponsorship.

Commentators and London politicians have hit out at the Mayor and TfL for allowing Barclays to continue to benefit from publicity on the bikes, but giving no credit to the boroughs.

Martin Hoscik of MayorWatch told the BBC: “Local councils have paid more than £4 million for this and yet their logos are nowhere over the bikes. A company that has provided nothing is benefitting from all the free publicity.”

London Assembly Labour Party member Valerie Shawcross said: “London’s council tax payers and the local boroughs have actually ended up funding the expansion and lo and behold Barclays have still got their branding all over these bikes even though they’ve not paid for them.”

Had the Heads of Terms become a formal contract, it’s possible Barclays could still have paid nothing. The document says: “The parties agree that the number of bicycles required to meet the actual phase 3 launch requirements and trigger payments by Barclays will be 2400.”

But when the expansion launched in December last year, only 2,000 bikes were available, well below the threshold at which Barclays would have been obliged to pay.

London Assembly member Darren Johnson commented to the BBC: “It does show what a poor contract this was from start to finish: poorly negotiated, poorly written. The fact that a multi-national company like Barclays Bank can get out of paying money that was due on the sponsorship deal while their advertising still goes ahead is absolutely shocking.”

No sponsor has yet been announced to replace Barclays Bank. It’s hard to see how the scheme could continue without one. It has been substantially more expensive to run than similar schemes in other cities around the world, in part because on average each bike is just for just 3.1 trips per day, rather less than the originally estimated ten.

A study published at the end of November by US sustainable transport think tank ITDP found that 6.7 trips per day per bike were made on similar schemes in Paris, 8.3 in Lyon and 10.8 in Barcelona.

But the operating cost per trip was more than five times higher in London, at $4.80, than in Lyon and Barcelona, both at $0.86. Data for Paris were not available, but the operating cost in London was also more than three times that in Mexico City, Minneapolis, Montreal and Washington DC, and the highest of the nine cities worldwide measured by that metric.

Blogging about that study on CTC’s website, the national cyclists’ organisation's Chris Peck said: “CTC suspects that the lower than average use of London's scheme is a consequence of the poor conditions for cycling in central London, with little dedicated space for cycling, and far too many one-way streets and pedestrianised routes from which cyclists are banned.”