Developer Funded Transport

Meeting: 
MQT on 2018-05-17
Session date: 
May 17, 2018
Reference: 
2018/1196
Question By: 
Florence Eshalomi
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

Given the issues around additional costs to the Northern Line Extension at Battersea Power Station, what are you doing to ensure that all developers pay their share for future transport infrastructure?

Answer

Answer for Developer Funded Transport

Answer for Developer Funded Transport

Answered By: 
The Mayor

Sadiq Khan (Mayor of London):  After seven years of Government cuts to the TfL budget, TfL has had to look for other ways to secure the funding it needs to maintain and enhance the transport network.  This includes funding from the developers, who benefit from transport investment alongside those who use the transport network. 

 

In my Transport Strategy I have been clear that London needs a new approach to funding and delivering the transport network.  This should include measures such as land value capture and devolving financial powers to local level.  These changes will be essential to delivering an efficient and fair funding system.  All new developments in London above a certain size, apart from health and education, are subject to a mayoral Community Infrastructure Levy (CIL) charge.  The proceeds from this are paid to the Elizabeth line project. 

 

Developer contributions through Section 106 money also help to make sure developers pay their fair share.  The arrangements at Battersea were put together some years ago and would not meet my current policies for developer contributions and affordable housing.  I would expect to hold future developers to higher standards.  The additional costs to the Northern line extensions have been caused by significant changes made by the Battersea Power Station developer to the design of the development above the station at Battersea.  More ambitious structures than were originally agreed have meant substantial changes are needed for the new Tube station to function properly.  This had led to an increase in the overall cost of the project.  TfL is in discussions with Battersea Power Station developers to recover these additional costs. 

 

Florence Eshalomi AM:  Thank you for that, Mr Mayor.  Given that this issue has been going on for almost two years now, how much of that £240 million do you want the developer to pay?  Again, when do you think that this is going to be resolved?

 

Sadiq Khan (Mayor of London):  This is a commercially sensitive matter so it is not appropriate for me to discuss details, but the point is that the additional work that we have had to do has been undertaken because of the changes made by the developer, so we expect them to pay for those changes.  The conversations/discussions are ongoing, so we will just wait and see what happens. 

 

Florence Eshalomi AM:  Thank you, Mr Mayor.  I have been going through the TfL Board papers for the meeting next week, and there are some worrying figures in there.  One of the things was that passenger income has dropped by 3% to £4.6 billion.  Passenger numbers continue to fall as well.  I am sure you will know the Bakerloo line - where we will see the extension in Southwark - is very much something that we are looking forward to.  It was one of the consultations where TfL received the most responses.  Given that there are funding problems on the Northern line which we still have not resolved, how are you going to ensure that we get funding and contributions from developers so that we do not see similar situations happening on the Bakerloo line extension?

 

Sadiq Khan (Mayor of London):  One of the things that we are working with the Treasury on is how we can have innovative new ways to fund infrastructure projects in London.  Crossrail 1 was very exciting in relation to the funding regime.  Central Government taxation, London government taxation, developers less so, but businesses in London, Business Rate Supplement and CIL as well: really, really big contribution. 

 

On the Bakerloo line we have done some work about what sorts of funding models may work, but the good news is that the two boroughs there, Southwark and Lewisham, have been fantastic in working with us in relation to seeing how we can get the sums to add up in relation to the Bakerloo line extension.  They have proposed higher borough CIL tariffs, but even with those tariffs there is a gap between the funding we need for the Bakerloo line extension and the monies TfL can give, so we are looking at other ways to try to fill that gap.  You are right, the Bakerloo line extension is much needed.  We have to think about ways to pay for that infrastructure.

 

Florence Eshalomi AM:  Just finally, you may have seen in The Times reported today that the budget for Crossrail is going over by £500 million.  One of the things that Val [Valerie Shawcross CBE, Deputy Mayor for Transport] mentioned was that the delays to the Elizabeth line will have a big impact on TfL’s revenue if it does not open.  Where are we going to find that extra money?

 

Sadiq Khan (Mayor of London):  The Crossrail line project is a project that cost, roughly speaking, £15 billion, and there is a contingency built into the Crossrail line project which I think is, roughly speaking, £500 million to £600 million.  It is 92% complete, there are various checks taking place, and we are on schedule for the central part, as was planned, to open in December this year, for the entire line to open in December next year, and my understanding is that the Secretary of State will be making a statement in the next few weeks about any potential overruns.  The project is going according to plan.  The last bit is always the most difficult.  We know this from previous projects.  Previous transport infrastructure projects have been extremely delayed, extremely over budget.  In a budget of £15 billion, 90% complete, I still speak very proudly about the Crossrail project.

 

Florence Eshalomi AM:  OK.  Thank you, Mr Mayor.