London Underground and TfL

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

Record number of passenger journeys as UK rail revenue rises to four-year high

18/06/2019Record number of passenger journeys as UK rail revenue rises to four-year high

Record figures of rail passenger journeys have been recorded in England, Scotland and Wales, according to the most recent quarterly report by the... more >
Rail union Aslef launches 'On Track with Diversity' report at Houses of Parliament

18/06/2019Rail union Aslef launches 'On Track with Diversity' report at Houses of Parliament

Train drivers’ union Aslef launched its On Track with Diversity report at the Houses of Parliament on Monday, as it looks to increase ... more >
Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

13/06/2019Dawlish railway may be ‘moved out to sea’ to protect it from storms under new proposals

The storm-battered Dawlish rail line could be “moved out to sea” and away from the “hazard” of the cliffs under new plans... 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

Apprentice to Co-leading the Rail Sector Deal

05/06/2019Apprentice to Co-leading the Rail Sector Deal

In a series of Q&A’s with key speakers on the run up to TransCityRail Midlands, we caught up with TransCityRail panellist and Amey’s commercial account director, Anna Delvecchio, for her insight into what the Rail Sector Deal means for the rail industry and its supply chain. Ann... more >
read more blog posts from 'the sleeper' >

comment

Hitachi trains for Happy trains

10/06/2019Hitachi trains for Happy trains

ScotRail project manager Kirsty Devlin discusses the withdrawal of Class 365s, to be replaced with the brand-new Class 385 fleet. While Scot... more >
Malcolm Holmes on new stations for the Black Country

10/06/2019Malcolm Holmes on new stations for the Black Country

Malcolm Holmes, executive director of the West Midlands Rail Executive, described the new stations set to be built for the Black Country region o... more >
The skills bottleneck: Dealing with growing apprenticeship demand

10/06/2019The skills bottleneck: Dealing with growing apprenticeship demand

Richard Turner, head of apprenticeships at Network Rail, details the reasons for growing apprenticeship demand in the rail sector over the coming... more >
A train journey on the Midland Main Line 15 years from now…

10/06/2019A train journey on the Midland Main Line 15 years from now…

Chris Hobson, director of policy and external affairs at the East Midlands Chamber, talks in detail about what travelling through the region will... more >

rail industry focus

View all News

interviews

Record number of passenger journeys as UK rail revenue rises to four-year high

18/06/2019Record number of passenger journeys as UK rail revenue rises to four-year high

Record figures of rail passenger journeys have been recorded in England, Scotland and Wales, according to the most recent quarterly report by the... more >