Today’s announcement from the government on paying for Crossrail cost overruns marks a significant milestone in getting it back on track and into service.
London businesses were extremely disappointed by the news in August that Crossrail’s opening would be pushed back from December this year to ‘autumn 2019’ but were determined to keep the news in context – disappointing yes, but this was no disaster.
Crossrail remains a source of envy to our competitor world cities, like New York. It will make travelling in London easier and quicker and reduce overcrowding. It connects key business areas like the City, Canary Wharf and West End with Heathrow airport and to growing areas of new housing east and west of the capital. It can’t come soon enough.
Pulling together for long-term rewards
So our main message to the Mayor and to the government has been for all partners to pull together to get Crossrail back on track, and agree a robust funding package and delivery schedule that will get the project into service as promptly as possible.
We therefore welcome today’s statement from the Department for Transport (DfT) which commits £350 million of short term repayable financing to the Greater London Authority for the current year. By providing essential support on financing, the government is ensuring that this critical project, will open without further delay.
That’s good news for London. But we mustn’t kid ourselves that resetting Crossrail will be painless or cost-free. Some big questions remain outstanding. In particular, we still need certainty from DfT and Transport for London (TfL) as to when successive phases of the project will open, clarity as to how any additional funding pressures will be met, and improvements to governance to ensure that this experience will not be repeated.
Business remains a strong partner
As one of the core funders of the project, London business is committed to now working with the Mayor and government to ensure that any new funding solution is a fair one for all parties. As recounted in‘Crossrail – 40 years in the making’, London business was instrumental in securing the go-ahead for Crossrail. We’re not about to be a fairweather friend now.
The Mayor has already acknowledged that London will need to bear the brunt of cost overruns. We accept that. As part of a funding package there may be a case for some of the business-related funding streams – principally the Mayoral Community Infrastructure Levy and Business Rate Supplement – running for longer to help pay for these additional costs. But we are not offering a blank cheque and other sources of funding will also be needed, whether from fares or through selling off the completed Crossrail tunnel to pension funds. Business now expects to be consulted on the detailed shape of any funding package.
We must also ensure any knock-on impacts on the wider TfL investment programme are manageable. This is an absolute red-line for London business. There’s no point opening Crossrail to great fanfare if at the same time we leave the Piccadilly line to crumble.
Looking beyond Crossrail
Getting Crossrail back on track also means we can continue to plan for the future and invest long-term. We will still need new transformational projects like Crossrail 2 – nothing has changed in that respect – and we also need to continue modernising the Tube, rail and roads infrastructure we already have. The government’s own independent expert advisers at the National Infrastructure Commission (NIC) gave us a clear road map for the coming decades which meets all of these needs. Our letter to the Chancellor ahead of next week’s Budget called for government to adopt the NIC’s recommendations, thereby giving the go-ahead to key schemes like Crossrail 2and Northern Powerhouse Rail.
For Crossrail 2 our focus now is on securing a positive government response to the NIC, backed up with investment through next summer’s spending review (alongside other vital regional schemes such as Northern Powerhouse Rail). Mike Gerrard, the former managing director of Thames Tideway Tunnel, and chair of an independent affordability review into Crossrail 2, has provided government with viable options on phasing, funding and financing and there can be no excuses for delaying decisions further.
The secret of Crossrail’s success has always been the partnership between London government, central government and business. And it’s through that partnership that we will now get Crossrail open and Crossrail 2 finally off the drawing board and into the ground.
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