Whitehall feud over Crossrail 2: Ministers push back against TfL funding plan for £31bn route

Rebecca Smith
The Queen Visits The Crossrail Station Site At Bond Street
Crossrail, now known as the Elizabeth Line, will run from Reading and Heathrow in the west to Shenfield and Abbey Wood in the east (Source: Getty)

Rising tension between the government and Transport for London (TfL) over funding plans for Crossrail 2 is threatening to shunt the £31bn infrastructure project into the sidings.

TfL submitted its business and funding case for the new cross-London rail route to the government in March, but transport secretary Chris Grayling has yet to give the plan the go ahead.

Crossrail 2 planners had wanted a decision on it by the end of May to keep the timeline of the key railway link on track. In the mayor’s transport strategy, unveiled yesterday, Sadiq Khan said the government “must immediately” give the go-ahead for Crossrail 2. But City A.M. understands the Department for Transport (DfT) remains unconvinced by TfL’s current funding proposals, some of which will only be retrievable once Crossrail 2 is up and running.

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In TfL’s 49-page business case, seen exclusively by City A.M., the measures floated include paying from Crossrail 2’s net operating surplus, and two tariff increases on the mayoral community infrastructure levy. This scheme charges developers for additional floorspace they create across the capital, and was introduced to help raise money for the first Crossrail, which is currently under construction.

A senior government source told City A.M.: “TfL isn’t putting any money in”, and instead wants the government “to front all the cost”, with TfL then paying it back down the line.

There are also concerns over the financial impact on firms in the capital, which will potentially face another hit with the proposed levy rise and ongoing elevated business rates, while the first Crossrail line is still being paid off.

Michele Dix, TfL’s managing director for Crossrail 2, said: “TfL submitted a revised business case to the secretary of state in March. It includes detailed proposals for a funding package where London funding streams pay for half of the total cost of Crossrail 2 as was agreed with the government. Our case is robust, and we will continue to work closely with the secretary of state as we develop our plans.”

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A DfT spokesperson said: “As with all transport scheme proposals a thorough analysis is being carried out by the department to ensure it is a robust scheme. This includes examining whether the National Infrastructure Commission’s detailed recommendations on the scheme have been met. These considerations and further discussions are part of a normal ongoing process.”

Crossrail 2 is expected to cost £31.2bn, and TfL forecasts its impact will result in £11bn in journey time savings, and unlock 200,000 extra jobs in the region thanks to the increase in transport capacity. The business case also claims that the scheme will facilitate the construction of 200,000 homes.

The current timeline envisions a hybrid bill being submitted to parliament by the autumn of 2019 for Royal Assent by 2021/2022, and construction to commence that year. The rail route would then be ready to open for 2033, which would also tie in with the second phase of HS2.

The proposed Crossrail 2 route would be tunnelled from New Southgate and Tottenham Hale in the north, to Wimbledon in the south, providing an interchange with other London Underground, Overground and rail services.

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Supporters say it is needed because crowding is forecast to soar beyond current levels by the early 2030s, and tube stations at each of the six busiest National Rail termini (Euston, Kings Cross St Pancras, Liverpool Street, Waterloo, Victoria and London Bridge) will face severe operating difficulties.

The business case insists certain stretches of the Underground are predicted to reach average levels of crowding that exceed six passengers per square metre during the morning peak, close to “crush load levels”.

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