Last July Chris Grayling confirmed that Crossrail 2 would only get the green light if London was able to fund 50% of the costs of the Crossrail 2 construction scheme. This amounted to London funding £15bn which, according to a leading business group they believe can be gained through a combination of council tax hikes, business rate increases and fare rises.
It was estimated by London First, who represent over 200 employers within the capital, that London would need to find around £200m per annum required to support additional borrowing to meet its share of the upfront costs. In order to prove Crossrail 2’s affordability London First, has therefore put forward a number of new funding options.
The group’s Paying for Crossrail report said “a series of new funding mechanisms such as fare increases and council tax contributions, as well as increases to existing funding streams such as the capital’s infrastructure levy, would be needed when construction starts”. The report went on to suggest that these revenue streams could be borrowed against to cover the city’s 50% contribution towards the £30bn rail line.
The group also suggested a one-off fare increase for Transport for London and relevant national services in 2020. A rise of 1% on TFL, West Anglia Main Line & South Western Railway would create an additional £35m per year. The group was also proposing a new council tax increase similar to the one used for the Olympics which was estimated to bring in a further £150m per annum. Business rates would have a slight increase of £0.5p in the pound which would generate a further £68m per year.
Other funding options London First suggested would be to increase the Mayoral Community Infrastructure Levy which previously provided £600m for Crossrail 1, through charging commercial & residential developers on new developments.The group also called on the government to ringfence a proportion of the stamp duty and business rate payments driven by the Crossrail 2 line.
London First chief executive Jasmine Whitbread said: “We need to step up planning for long-term investment in the UK’s infrastructure and it’s clear that London has to pay its way. This means London’s commuters, businesses and residents will have to put their hands in their pockets to see the benefits of better and quicker journeys, and more homes being built along the route. What we need now is for the mayor and government to strain every sinew to get costs down and ensure tax and fare rises are a last resort, rather than the easiest option.”
A Department for Transport spokesman said: “Crossrail 2 has the potential to unlock new housing, jobs and development and provide London with infrastructure that will support its growth. We need to ensure the public gets an affordable scheme that is fair to the UK taxpayer, and we are clear that we must improve transport in lockstep across the whole country.”