Central government will only have to fund half of the £12bn to £20bn cost of London’s Crossrail 2 project, according to a report by business lobby group London First.
London First said the need for only 50% central government funding strengthened the case for the proposed new south west to north east London metro rail line. It means the as funding arrangements would meet a key Treasury demand and, it believes, strengthens the case for the scheme.
The lobby group believes that the new line is crucial to easing what would otherwise be “intolerable pressure” on the capital’s transport network as its population grows by 1.5M over the next 20 years, it addded. Crossrail 2 would add 12% to London’s rail transport capacity, should open by 2030 and has overwhelming public support, it said.
Crossrail 2 is a proposed new south-west to north-east rail line across London.
It will provide services between Hertfordshire and parts of Surrey and Middlesex via a new tunnel under central London between Tottenham and Wimbledon.The scheme is based on the Chelsea-Hackney safeguarded route, which was first planned in the 1970s alongside an east-west link, which eventually became Crossrail.
A recent Transport for London (TfL) and Network Rail consultation document showed that 95% of almost 14,000 respondents support the scheme. The Funding Crossrail 2 report was produced by a taskforce formed by London First. It included representatives of accounting giant KPMG, retailer John Lewis plus former Labour transport secretary Lord Adonis.
“Failure to invest would make life intolerable for Londoners, hamper London’s economic growth and hit government tax receipts,” said taskforce chairman Francis Salway, a former chief executive of property developer Land Securities.
“We may be half way through Crossrail 1, but its success - and the pressing need for extra capacity in London - means now is the time to be pushing forward with plans for Crossrail 2.”
The London First study says combining funding from passengers, property developers, Network Rail, London businesses and residents could ensure a green light for Crossrail 2. It identifies over £23bn of potential funding with an emphasis on those who benefit most from Crossrail 2 doing most to pay for it.
Lower cost estimate £12bn
Upper cost estimate £20bn
Central cost estimate £16bn
This suggests the final cost of the project could be split roughly into three equal parts, with central government and Network Rail paying one third, TfL and Crossrail 2 commuters another, while property developers, London business and residents would contribute the final portion.
The report also highlights that increasing the proportion of tax revenue generated by London that is kept by the Greater London Authority and the boroughs to pay for infrastructure would add extra flexibility to funding.
Central government grants £4bn
Network Rail £2bn
Wider Transport for London income from fares £3.12bn
Crossrail 2 income from fares £3bn
Developer contributions £990M
Intensification of development £2.4bn
Council tax £870M
Business rates £1.81bn
Fiscal devolution £5.21bn
Total (including fiscal devolution) £23.4bn
Total (excluding fiscal devolution) £18.19bn
Figures at 2012 prices