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.
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.









