Friday, March 04, 2011

Alternative Funding


With funding cuts and government struggling to recover from Labour's financial mismanagement, the hunt is on for alternative methods of funding capital projects. The budget committee spent a couple of hours taking evidence from experts in TfL and the GLA yesterday morning.

Crossrail, Tube upgrades and Thameslink are all able to go ahead but other projects, notably the extension of the Northern Line to Battersea will need to be funded by innovative methods. Because transport projects usually generate an increase in property values along the route, some form of land value taxation could be considered. This was always a favourite with former TfL deputy chair Dave Wetzel, but unfortunately he was not around to offer his opinion.

Battersea Power Station has been an ill starred development site for a long time, with various proposals coming and going whilst the giant building - closed thirty years ago - falls into dereliction. The latest plans look like coming to fruition and as it is now just about the last bit of undeveloped river bank, they look to generate considerable profits. However as always there was a risk that land values would fail to rise and the revenue would not be created, or that the balance between residential and commercial uses would fail to maximise income, or that the amount raised would still cover only a fraction of the cost of the line extension - the experts differed on this, predicting that anything from a tenth to two thirds of the cost could be raised.

Of course some of us remember Ken's predictions that rising land values in the Lea Valley would pay for the Olympics, and that the house he bought for Bob Kiley would be sold at a profit...


Crossrail

Discussion turned to the community infrastructure levy (CIL) which will generate some £300 million for the Crossrail project. In effect this will be a 'planning gain' charge attached to developments within Greater London. Local authorities already raise money in this way, but its use is restricted to major developments. The CIL will apply to all non domestic planning applications.

The plan has raised major concerns amongst London's councils and Bromley have agreed to mount a legal challenge - not for the first time, for those who remember 'Fares Fair'.

The first problem is that the CIL will only apply within Greater London. The extra cost of development will tend to push businesses over the border into the Home Counties, particularly from outer London boroughs. There is also a reasonable argument that Crossrail is a project with national benefits, so the whole country should pay. A stretch to ask Scotland and Wales to cough up perhaps, but Crossrail will actually stop at Brentwood and Maidenhead, so it is only fair that they make some contribution. It feels like the London only Olympic levy all over gain.

Then there are concerns about the distribution of the charge within London. The legislation that enables the CIL does not allow the charge to be focused along the route where the benefits will be felt. The only variation that is allowed across London is based on existing property values and there are three charging bands. Luckily Havering is in the cheapest band and Redbridge is in the middle band - both get the benefits of access to the route and new stations, so far so good. However Richmond is in the top band and the line goes nowhere near them - needless to say they are not happy, and other north and south London boroughs share their concerns.

CIL only applies to Crossrail at present, but the witnesses accepted that it could be used to raise money for other transport projects, including a resurrected Cross River Tram. The legislation seems blunt and doesn't consider London's size and variation - not for the first time - so the witnesses did agree that the government should be pressed to make changes next time the matter came up for debate.

15 comments:

AdamB said...

Loving the Russian style hat. Is this the new "Red Roger" look?

The Finchley frog said...

(Sings)

"Where did you get that 'at,
Where did you get that tile?"

...or perhaps you're wearing it for a bet?

Roger Evans said...

I write a serious post and all you are interested in is fashion??? Shame on you guys.

The Finchley frog said...

Then I'll take the challenge - briefly.

Should not the transport needs for the development of Battersea Power Station be met by payment of a substantial sum from the developer under a Section 106 agreement? Without seeing the detailed proposals I fail to see how the Northern Line will serve Battersea.

Roger Evans said...

That's better.

There is a good wikipedia entry on the Northern Line Extension and it is surprisingly bang up to date. The Charing Cross branch would be extended from Kennington to Battersea via Nine Elms (and the new American Embassy), with a plan to continue on to Clapham Junction. Wandsworth Council have granted planning permission and the cost is estimated at £560 million (we were told £600 million by TfL on Thursday).

The claim is that it will be privately funded, although details are not given, and probably haven't been agreed. The exact mechanism is unclear.

The Finchley frog said...

What a bizzarre proposal! The operation of the Northern Line in its current form is already somewhat complex. Whilst it is no doubt desirable to link these areas into the tube system is this the appropriate way? Was any consideration given to an entirely new line, such as the Hackney-Chelsea option?

Roger Evans said...

Hackney to Chelsea is still in the plan, although the last version I saw continued south across the river and north beyond Hackney. It is rebranded as Crossrail 2 which implies that it won't go ahead until Crossrail 1 is completed. Apart from costs, there is only a certain amount of tunnelling that Central London can take at any one time.

And the operation of the Northern Line could be simplified if all the Charig Cross trains run to Battersea and all the Bank trains run to Morden. That would also relieve some of the crowding on the southern end of the line. I don't think they plan to create another Camden Town type junction...

Rog T said...

Roger,

I can assure you as someone with a wife and two daughters, fashion is an extremely serious business. I'm jealous, I've been writing a lefty blog for three years now, you just put a russian hat on and you instantly scoop the title "Red Roger".

On to the more trivial issues you mention. It is all very well for people who don't use the Northern line talking about it "being simplified". I live in Mill Hill and so this is one of my options for travelling to central London. At present during rush hour, boarding a train at Burnt Oak (my nearest station) for Bank or Charing X means I get a seat all of the way. If the next train isn't going where I want, I wait 2 minutes for the one after.

What you are proposing means that 50% of the people on this line will have to change at Charing Cross and have a right load of hassle, squeezing on to packed trains at Camden. There is no support for your proposal from the people who actually live on the line.

Boris stated he'd be a mayor for outer London as well. If this proposal goes through, it shows that he doesn't give a damn

The Blogger formerly known as red Rog !

The Finchley frog said...

To be fair to Roger Evans I do not read the proposals for the Northern Line as being his. They appear [to me] to be proposals from property speculators supported by that unaccountable fount of all wisdom, TfL.

Mrs Angry said...

Excuse me, Adam & Rog: do try to keep up. Comrade Evans and his soviet era hat was my joke, many weeks ago. We have moved on from then, haven't we, Roger? And now the interesting topic is speculating about what exactly Mr Evans was doing in a ladies' shoe shop in Romford that got him into so much trouble, all those years ago. I can't be bothered to talk about Crossrail, and in fact I think there is far too much talk about trains on this blog. I doubt that Roger or Boris have ever been on the Northern line with common people anyway.

Roger Evans said...

Mrs A, you did indeed beat them to the hat 'scoop' back in January, I think.

In my opinion you can't have too much talk about trains. I was the only kid in my school to have the full London Underground map (not just the touristy central bit) on my bedroom wall. I have even been on the Northern Line a few times, as it goes to London Bridge, although I prefer the bus, top deck front seat if possible...

Redbridge resident said...

So we come back to Roger in the ladies' shoe shop. Perhaps he was trying it on......

[The security word for this post appears to be Scottish - it is "dinatel"].

Mrs Angry said...

As we speak Mr Evans, Dave Hill will be adding Rog & Adam to top London bloggers of the week for their outing of your swivel eyed trot hat collection, having stolen yet another story from the fluffy headed lady bloggers, you watch ...

I can't believe I am mentioning this, but you and any other trainspotter should visit our Church Farmhouse Museum in Hendon, where there is an exhibition about Harry Beck, the tube map man. Grab your best anorak and hurry on over because - guess what, your friend Brian and his Tory chums are taking the museum's funding away, and shamefully, after decades of brilliant exhibitions, the museum will soon be closed down.

RRes: you are a caution. He still hasn't explained himself, has he? They still talk about it in Romford, I hear ...

Anonymous said...

Do you know why we are paying for a Cable Car between O2 and Royal Docks (near Excel)?

It seems that TfL and LDA are want to build this.

But the Cable Car goes though the London City Airport's Public Safety Zone (Crash Zone). So imagaine an aircraft that is taking off, and has engine tourble and stuggles to gain height can crash into the cable car (or the cable car line).

NATS did a safety study and came out with a ridiculous figure of 1 crash EVERY 15 million years. Did they just make this up??

Also, the O2 good transport links between transport Royal Docks has the DLR. So who will this benefit?

I cna't imagine the cable car being part of the Oyster system?

Redbridge resident said...

The anonymous contributor probably knows that TfL and the LDA both come up with some of the most absurd schemes possible. And they use his money, mine, and yours to pay for them. That they can come up with something like this ridiculous cable-car scheme at a time when the country teaters on the verge of bankruptcy demonstrates beyond any doubt that they all live in cloud cuckoo land.