Capacity Enhancement Projects

Meeting: 
Plenary on 2006-12-06
Session date: 
December 6, 2006
Reference: 
2006/0416
Question By: 
Roger Evans
Organisation: 
GLA Conservatives
Asked Of: 
Peter Hendy (Commissioner, Transport for London)

Question

Transport 2025 predicts that London's population will grow from 7.5 million today, to 8.3 million in 2025, and that employment will grow from 4.6 million today to 5.5 million in 2025. It is clear that demand at this rate will far outstrip supply. TfL have a long shopping list of capacity enhancement projects, but none of these are funded. What future funding options are available to TfL, and which of these options do you consider the most realistic?

Answer

Answer for Capacity Enhancement Projects

Answer for Capacity Enhancement Projects

Answered By: 
Peter Hendy (Commissioner, Transport for London)

Some of this is going back to what I just said in response to John Biggs' question. Transport 2025 in major part identifies the PPP, which is a 30 year deal with Government which has its own ring fenced funding, and no doubt many of you will diligently research what Government said at the time that it was handed over in 2003 to make sure we are able to claim that it is independently funded.

As I have already said, there is actually a separate bid for Crossrail. Helpfully, the Government established the Transport Innovation Fund which, in effect, is a significant indicative growth budget for the Department of Transport over the next seven to ten years which is designed for schemes achieving productivity increases or congestion reduction. We believe that Crossrail is absolutely ideal to be funded under the Transport Innovation Fund which, itself, is in addition to the department's base level of funding and not in substitution of it.

Clearly there are other ideas for funding Crossrail as well. The reason I just mentioned that the Secretary of State has linked funding decisions on Crossrail to the outcome of the Lyons Inquiry is because the Lyons Inquiry into local government finance may well indicate additional sources of fundraising for infrastructure projects that Government believe are appropriate which might, for example, indicate additional business rate funding or some other form of taxation.

Beyond that, we will still need a base level of funding for the remaining business as normal, asset renewal, and some elements of growth in the budget. As you know, the budget for Transport for London is very largely derived from either government grant or fare income. There is a very modest amount of council tax in there. Of course we have done prudential borrowing but there is a limit to how much prudential borrowing you can do because you get a charge on income which is the interest cost.