Crossrail

20.03.19

Crossrail delays to cost businesses £600m as TfL reports half a billion pound deficit

The delayed opening and financial chaos around Crossrail are to cost businesses and developers up to £600m, as TfL announces a budget deficit of £500m – nearly half that of original estimates.

A levy on business rates is to be extended for about four years to help repay the £2bn cost of the Elizabeth Line’s delayed opening, as well as millions earmarked for Crossrail 2 being redirected into the project.

Sadiq Khan agreed to fund an extra £1.4bn in December in Crossrail’s most recent bailout, and now it has emerged that the Crossrail business rates levy, which is paid by London’s 48,300 biggest firms, will remain in force until 2037-38.

This comes alongside the release of the London transport authority’s draft annual budget which showed that its £1bn deficit has been reduced.

The operating deficit of £968m in 2018-19 is now forecast to be almost halved by the end of the financial year to £500m.

An annual hike in Travelcard prices for tube passengers will generate £823m profit for the transport authority, and cost savings and a rise in Underground passengers prior to Christmas have helped in slashing the £1bn deficit.

TfL attributed some of its debt to an average £700m annual reduction in government grant, which despite “record-saving efficiencies” has meant it has had to pause non-safety critical renewal work on London’s road network.

Upgrades to the Piccadilly line’s signalling and at Camden Town station have also been put on hold by TfL.

Khan said: “By making TfL more efficient and almost halving its operating deficit, we are able to continue our vital work to transform the Tube network, take radical action to clean up our toxic air and freeze fares, making transport more affordable for millions of Londoners.

“But there is only so much that TfL can do when its government funding is slashed, it's locked out of funding for road maintenance and faces no certainty over future Government capital investment.”

TfL as a whole will make an overall £742m loss in 2019-20, largely due to a record subsidy of £722m needed to run the bus network.

As Crossrail awaits a new opening date estimate, developers building near Crossrail stations will also have to pay a community infrastructure levy in order to raise money for Crossrail 2.

City Hall documents published last week confirmed that the London mayor had signed a “mayoral decision form” approving the new Crossrail funding package.

It stated that the Greater London Authority will raise over £6m from business rates and levies for Crossrail.

Caroline Pidgeon, who is leading the London Assembly inquiry into the Crossrail crisis, said: “The true cost of Crossrail’s delayed opening is that Crossrail 2 has suffered a serious and potentially fatal blow.”

Sean Dempsey/PA Archive/PA Images

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

North of England leaders demand ‘Northern Budget’ to boost region

16/08/2019North of England leaders demand ‘Northern Budget’ to boost region

Key leaders from across the North of England have called for Government commitment to a ‘Northern Budget’ which could be used to deli... more >
Metrolink customers complete 170k trips using contactless system

16/08/2019Metrolink customers complete 170k trips using contactless system

Since its launch four weeks ago, more than 170,000 journeys have been made using the new contactless payment system on the Metrolink network... more >
Government announces £25m Brexit high-speed medicines train

15/08/2019Government announces £25m Brexit high-speed medicines train

In the event of a No Deal Brexit, the Government has announced the setting up of a high-speed train service to ferry medicine to the UK from Fran... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Network Rail’s Anna-Jane Hunter on, NPR, TRU, HS2 and supply chain opportunities

12/08/2019Network Rail’s Anna-Jane Hunter on, NPR, TRU, HS2 and supply chain opportunities

Anna- Jane Hunter, is a ‘proud northerner’ and is passionate about continuing the investment and success story of rail across the North.  She plays a key role in working with government and northern leaders to enable the network to carry on thriving. We caught up with Anna-Jane, for her expertise and insight into connecti... more >
read more blog posts from 'the sleeper' >

comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >
Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

02/07/2019Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

Smart electrification is the way to boost clean energy resources, argues Leo Murray, director at 10:10 Climate Action. Contractors are clear... more >
Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

02/07/2019Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

The TCR Midlands conference is only days away and tickets are going fast for the sector event of the year at the Vox Conference Centre in Birming... more >

rail industry focus

View all News

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he wo... more >