We’ve got some work to do now.
George Osborne’s March 2016 budget indicated that the then Government would be “investing in the infrastructure that will deliver economic growth for the next generation” by a number of measures, including “securing London’s future infrastructure by giving the green light for Crossrail 2 to proceed. The government will provide £80 million to develop the project with the aim of bringing forward a Hybrid Bill this Parliament”.
There have been rumours that the Treasury or Department for Transport subsequently have not yet been convinced of the business case but, whatever the reason (the twin challenges of Brexit and the need to devote resources to Northern Ireland to prop up a new born minority government? Politics = events, dear boy, events), the project’s absence from the Conservatives’ 2017 manifesto and subsequently from the Queen’s Speech on 21 June has been hugely disappointing.
Perhaps given Mr Osborne’s new job it is no surprise that on the day of the Commons debate on the Queen’s Speech, 29 June, the London Evening Standard set out its concern in a strongly written editorial, but the points are surely well made.
Delay to the project would have a series of harmful consequences:
– Postponement of the commuting benefits and congestion relief that it will bring. Given the need to provide additional capacity at Euston ready for the opening of HS2 in 2033, it is time critical (see City am’s 28 June 2017 piece).
– Loss of the opportunities that it will open up for additional housing and employment development around stations on the route, including opportunities for Transport for London to explore the possibilities for land value capture mechanisms. The Crossrail 2 Growth Commission confirmed in its 2016 report that the project could unlock 200,000 additional homes and 200,000 additional jobs. Without Crossrail 2, how will further housing come forward at the scale that is needed? In this uncertain period, are key sites going to lie fallow or developed at less than the scale that could be achieved with better rail connectivity?
– The unnecessary cost of delay, estimated by Crossrail 2 managing director Michele Dix at £2bn a year.
– Extended blight that will be caused along its current route, safeguarded in 2015 and shown on this interactive map.
– The uncertainty that has now been created for the impending replacement London Plan, the first draft of which we will see in November. The implications of Crossrail 2 are so significant that might the Mayor have to publish “with and without Crossrail 2” draft policies? How can the likely effects of the plan be properly assessed with such a question mark over Crossrail 2?
The Mayor commenced consultation on 26 June 2017 in relation to his Mayor of London Community Infrastructure Levy 2 Preliminary Draft Charging Schedule (MCIL2 PDCS). MCIL1, which was adopted on 1 April 2012, was directed towards funding Crossrail 1. MCIL2 is directed towards funding Crossrail 2 and the Mayor intends for it to be adopted in April 2019.
The proposed per sq m rates are £80 for band 1, £60 for band 2 and £25 for band 3, save that in central London and the Isle of Dogs, the rates for office, retail and hotel uses will be £185 for offices, £165 for retail and £140 for hotel uses.
The Mayor’s supporting information says this about the current funding position for Crossrail:
“Since the 2016 Budget, Transport for London, the Greater London Authority and the Government have been working to develop a funding package for the project as part of the development of a strategic outline business case. The London contribution to the costs of Crossrail consists of four funding sources:
* Crossrail 2 net operating surplus – i.e. the net impact of Crossrail 2 on TfL’s rail revenues
* over station development – proceeds from development of land and property initially required for construction (development related with Crossrail 2 will pay Mayoral CIL 2 on the same basis other developments)
* a Business Rate Supplement (BRS) (once the current BRS repays Crossrail 1 related debt)
* a Mayoral Community Infrastructure Levy (MCIL2).”
MCIL2 is intended to meet approximately 15% of the project’s costs. What if Crossrail 2 does not go ahead? The document states:
“Negotiations on the Crossrail 2 scheme are still underway and there is no agreed funding package at present. However, MCIL2 does need to be brought forward now to avoid a charging gap at the end of Crossrail 1 construction and to allow for early funding of the Crossrail 2 scheme. Should no funding deal be achievable, the Mayor will be able to apply the MCIL2 proceeds to fund other strategic transport projects for which there is a significant funding gap.”
Crossrail 2 is also a key strand of the Mayor’s draft transport strategy published on 21 June 2017: “It will enable London’s highly productive economy to continue to grow by helping 270,000 more people get into the centre in the morning peak. It will thereby support 200,000 new jobs, as well as unlocking 200,000 additional new homes – more than 30 per cent of them outside London”
So what is happening behind the scenes? Will Crossrail 2 emerge in a leaner form? A City am story on 26 June asserts (denied by Crossrail 2) that a revised business case provided to the Government in March had dropped the proposed station at Kings Road Chelsea (the subject of a vociferous celebrity-backed campaign) and that possible stations at Turnpike Lane and Balham have been replaced by Wood Green and Tooting Broadway options respectively. The continued speculation without any real information, isn’t helping anybody.
What political weight, if any, does the National Infrastructure Commission still have? George Osborne (him again) established the NIC in October 2015 to “determine Britain’s infrastructure priorities and hold governments to account for their delivery” and appointed Lord Andrew Adonis as its chairman. NIC’s support of Crossrail 2 was hugely influential in the lead up to that March 2016 announcement. It set out on 26 June 2017 its top 12 infrastructure priorities, with Crossrail 2 featuring strongly: “The Government should by the end of 2017 publish a plan, agreed with the Mayor of London, for the funding and phased construction of Crossrail 2, and for securing the necessary parliamentary consent, taking account of the recommendations in the NIC’s Transport for a World City report.”
If this stasis goes on much longer I may even start to get nostalgic about all of those photos of George Osborne in high vis and hard hat…
Simon Ricketts, 1 July 2017
Personal views, et cetera