Crossrail 2 BRIEFING PAPER - Number CBP 8481 , 23 January 2019 - UK Parliament

Page created by Jacob Arnold
 
CONTINUE READING
Crossrail 2 BRIEFING PAPER - Number CBP 8481 , 23 January 2019 - UK Parliament
BRIEFING PAPER
        Number CBP 8481 , 23 January 2019

        Crossrail 2                                                                     By Andrew Haylen

                                                                                        Contents:
                                                                                        1. Background
                                                                                        2. Safeguarding
                                                                                        3. The proposed scheme and
                                                                                           route
                                                                                        4. The business case for
                                                                                           Crossrail 2
                                                                                        5. Funding & financing
                                                                                        6. Recent political developments
                                                                                        7. Challenges for Crossrail 2

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | papers@parliament.uk | @commonslibrary
Crossrail 2 BRIEFING PAPER - Number CBP 8481 , 23 January 2019 - UK Parliament
2   Crossrail 2

    Contents
    Summary                                                   3
    1.      Background                                        4
    1.1     Who is responsible for delivering Crossrail 2?    5
    2.      Safeguarding                                      6
    3.      The proposed scheme and route                     8
    4.      The business case for Crossrail 2                12
    4.1     Benefits                                         13
            Transport benefits                               13
            Wider Economic Benefits                          14
    4.2     Costs                                            15
    5.      Funding & financing                              19
    6.      Recent political developments                    24
    7.      Challenges for Crossrail 2                       26
    7.1     Funding                                          26
    7.2     Political support                                26

         Cover page image copyright Transport for London
Crossrail 2 BRIEFING PAPER - Number CBP 8481 , 23 January 2019 - UK Parliament
3   Commons Library Briefing, 23 January 2019

    Summary
    Crossrail 2 is a long-trailed scheme to build a new rail line along the Chelsea-Hackney
    corridor. It is being jointly funded by the Mayor of London and the Secretary of State for
    Transport, and subsequently jointly advanced by Transport for London (TfL) and Network
    Rail, with support from the Department for Transport (DfT).
    TfL has published three consultations on the design and development of Crossrail 2 and
    considered two detailed route options for the scheme:
    1     Metro option - a stand-alone Underground line from Wimbledon to Alexandra
          Palace to provide a frequency of up to 40 trains per hour and a peak capacity of up
          to 38,500 passengers per hour per direction. The trains proposed in this option
          would be shorter than the regional option, with a tunnel diameter of 5.5 m, the
          same as for the DLR.
    2     Regional option - would be similar in operation to Crossrail. The system is more
          extensive, both geographically than the Metro Option and in the length and
          capacity of the trains that would be used. The alignment of the central section
          would be similar but would be extended at both the northern and southern ends of
          the route onto the suburban rail lines.
    The Regional Option had the greatest overall level of support in the public consultations
    and TfL carried it forward as its preferred scheme, though the exact design and scope of
    the project is still up for consideration.
    Crossrail 2 will deliver several benefits to the London transport system, particularly in
    terms of easing congestion on other parts of the network and improving travel time and
    accessibility for those residents who will be connected by the new line. The scheme is also
    likely to deliver wider economic benefits through productivity improvements, economic
    growth and employment prospects along the supply chain of the project. The latest
    publicly available business case for the scheme estimates that it would produce £1.8 of
    benefit for every £1 of cost (a benefit-cost ratio, or BCR of 1.8). When wider economic
    benefits are included, this rises to a BCR of 2.0.
    Capital costs for Crossrail 2 were estimated by TfL in 2016 at £32.6 billion. As announced
    by the Chancellor in the 2017 Autumn Budget, the DfT and TfL have commissioned an
    Independent Affordability Review to examine ways of making the scheme more
    affordable. There are reports that the capital costs may increase to more than £45 billion.
    It is not clear at this stage whether the scheme will be delivered, and it rests, to a large
    extent, on whether costs can be contained and whether London can raise its share of the
    funding. In a best-case scenario, Crossrail 2 is unlikely to be delivered and operational until
    at least the early to mid-2030s.
    Information on other rail projects and aspects of how the railways are run can be found
    on the Railways Topical Page of the Parliament website. For more detailed information
    about the Crossrail scheme, see the House of Commons Library Briefing Paper Crossrail
    (Elizabeth Line).
4   Crossrail 2

    1. Background
    Crossrail 2 is a long-trailed scheme to build a new rail line along the
    ‘Chelsea-Hackney’ corridor (from Cheshunt and Alexandra Palace in the
    north via central London to Wimbledon in the south and possibly
    further to one or more of Chessington, Shepperton and/or Epsom).
    A west to north-east line was first proposed in 1944, when the concept
    of cross-London tunnelled rail services was first introduced in the
    Greater London Plan. Following this, in 1974, the London Rail Study
    identified the Chelsea-Hackney Underground line as a possible scheme
    to serve future demand. 1
    The latest iteration of Crossrail 2 dates to the January 1989 Central
    London Rail Study, which was commissioned by the Thatcher
    Government to look at ways of addressing overcrowding on the London
    rail system. It suggested a number of new lines and extensions,
    including East-West Crossrail (Crossrail 1) and the Chelsea-Hackney line
    (Crossrail 2). The East-West Crossrail had an outline capital cost
    (including rolling stock) of £885 million, while the Chelsea-Hackney line
    had an outline capital cost of £1.33 billion. 2
    Safeguarding directions (i.e. legally protecting an area from conflicting
    development) for the Chelsea-Hackney line were issued by the Secretary
    of State for Transport under the Town and Country Planning General
    Development Order 1988. Initial directions were issued on 7 February
    1991 and revised directions issued on 12 November 1991. 3 At about
    the same time (in 1992), the cost of Crossrail 1 was estimated at £1.94
    billion and the Chelsea-Hackney line at £2 billion (both in 1992 prices). 4
    In 1999 the Labour Government asked the Strategic Rail Authority (SRA)
    to study the requirements for extra passenger capacity to and through
    London. 5 The London East West Study was published in late 2000. It
    recommended that both the East-West Crossrail and Hackney-Chelsea
    routes be resurrected, and schemes developed to construct them. 6
    A joint venture company, Cross London Rail Links Ltd (CLRLL), was
    formed by Transport for London (TfL) and the SRA in 2001 and
    consulted with stakeholders on possible routes for Crossrail 1 and a
    feasibility study for a possible Crossrail 2 scheme. In the end, only
    Crossrail 1 was taken forward.
    Crossrail 2 was revived in 2008 when a route for the Chelsea-Hackney
    line was safeguarded. It linked the District line’s Wimbledon branch with
    the Central line’s Epping branch via Parsons Green, King’s Road, Sloane

    1
      Crossrail 2, History [accessed 4 January 2019]
    2
      DoT, British Rail and LRT, Central London Rail Study, January 1989, pp13-15
    3
      HC Deb 12 November 1992, c963W
    4
      HC Deb 3 March 1992, c87W
    5
      There are further details about the SRA in HC Library briefing paper SN1344
    6
      SRA, London East-West Study, November 2000
5   Commons Library Briefing, 23 January 2019

    Square, Victoria, Piccadilly Circus, Tottenham Court Road, King’s Cross
    St. Pancras, Angel, Essex Road, Dalston Junction, Hackney Central,
    Homerton and Leytonstone (more detail around safeguarding can be
    found in Section 2). As noted by Crossrail 2, “Detailed “optioneering”
    then considered many possible route variations to determine the one
    that best addressed transport and growth challenges.” 7
    Having been through three major consultations (Section 3), the project
    is now in the later stages of its initial design phase, ahead of a possible
    approvals process via a hybrid bill; though the prospects for the scheme
    remain uncertain in the current political climate and given developments
    with Crossrail 1. The more recent political developments and the
    prospects for the scheme are discussed in Section 6.

    1.1 Who is responsible for delivering
        Crossrail 2?
    Crossrail 2 is being jointly sponsored by the Mayor of London and the
    Secretary of State for Transport. Since April 2016, TfL’s Managing
    Director of Crossrail 2, Michèle Dix CBE, has led an integrated TfL and
    Network Rail project team in developing the scheme, with support from
    the DfT.
    Crossrail 2 also has a Programme Board, which was established in July
    2016, and whose job is to “make recommendations to the Mayor of
    London and Secretary of State for Transport on matters regarding the
    development of Crossrail 2”. 8 The Programme Board Acts as an advisory
    forum for the Crossrail 2 team and their work supporting these reviews,
    not as a decision-making body. Organisations represented on the
    Programme Board include:
        •    Crossrail 2
        •    Department for Transport
        •    Transport for London
        •    Network Rail
        •    HM Treasury
        •    Department for Communities and Local Government
        •    Greater London Authority
        •    Infrastructure and Projects Authority
    The Programme Board also includes several independent members with
    international experience in major project delivery. The Board is chaired
    by Lord Adonis, former chair of the National Infrastructure Commission
    and Labour Secretary of State for Transport. 9

    7
      Crossrail 2, History [accessed 4 January 2019]
    8
      Crossrail 2, Programme Board [accessed 12 April 2017]
    9
      Appointed in 2016, see: DfT press notice, Lord Adonis proposed as new chair of
        Crossrail 2, 24 May 2016
6   Crossrail 2

    2. Safeguarding
    Safeguarding is an established part of the planning system, designed to
    protect land which has been earmarked for major infrastructure from
    conflicting developments which might otherwise occur.
    Safeguarding Directions were first issued on 7 February 1991 under
    articles 14(1) and 18(3) of the Town and Country Planning General
    Development Order 1988. The Safeguarding Directions safeguarded the
    route corridor for the proposed Chelsea-Hackney Railway Line Project
    from Parsons Green to Leytonstone, Grosvenor Road to Ebury Bridge
    and at Wimbledon and Putney Bridge. 10
    The Safeguarding Directions issued on 7 February 1991 were replaced
    by new Directions issued by the Secretary of State for Transport on 12
    November 1991 under article 14(1), 18(3) and 30 of the 1988 Order.
    These were replaced by new Directions issued by the Secretary of State
    for Transport on 18 June 2008 under articles 10(3), 14(1) and 27 of the
    Town and Country Planning (General Development Procedure) Order
    1995 to safeguard the whole of the proposed route alignment of the
    Chelsea-Hackney line:
           a.      Between Parsons Green and Leytonstone;
           b.      Between Battersea Park and Ebury Bridge; and
           c.      At Wimbledon and Putney Bridge. 11
    In 2009 the Department for Transport (DfT) requested that Transport for
    London (TfL) bring forward proposals to review and amend the
    Safeguarding Directions for the Chelsea-Hackney line. The review took
    place in the context of the Mayor of London’s Transport Strategy
    published in May 2010. Following this review, new Safeguarding
    Directions (‘the Directions’) were issued under articles 16(4), 25(1) and
    29(6) of the Town and Country Planning (Development Management
    Procedure) (England) Order 2010 to safeguard the central section of the
    proposed route alignment:
           a.      Between Wimbledon and New Southgate;
           b.      Between Stoke Newington and Tottenham Hale;
           c.      Between Shoreditch Park and Hackney Central. 12
    More recent developments have required changes and extensions to the
    safeguarded route. In October 2014 TfL and Network Rail lodged plans
    with the Government for safeguarding a preferred route for Crossrail 2.
    The Government published a consultation on safeguarding the route in
    November 2014. 13 The main changes to be safeguarded were:

    10
       DfT, Guidance and explanatory notes for local planning authorities to accompany
         safeguarding directions issues for the Crossrail 2 project, 24 March 2015
    11
       ibid.
    12
       ibid.
    13
       Mayor of London press notice, ‘‘Crossrail 2 vital to support London’s growth’, says
         Mayor’, 28 October 2014
7   Commons Library Briefing, 23 January 2019

    •      The route from Wimbledon to Victoria using the District line
           between Wimbledon and Fulham Broadway to be altered in
           favour of one via Tooting Broadway and either World’s End,
           Chelsea, or Kings Road, Chelsea;
    •      A deviation between Tottenham Court Road and Angel to an
           alignment north of the Euston Road;
    •      The approach to Dalston north of Angel changed to a north–
           south axis rather than the previous east–west one;
    •      The route from Dalston Junction to Leytonstone and connection
           with the Central line abandoned in favour of a route to Alexandra
           Palace and New Southgate;
    •      A possible branch to Hackney Central safeguarded between Angel
           and Dalston Junction;
    •      The routes to New Southgate and Tottenham Hale to diverge at a
           second junction at South Tottenham; and
    •      Connection into the Network Rail lines at Tottenham Hale. 14
    The response to the consultation document and new safeguarding
    directions were issued in March 2015. 15 The 2015 safeguarded route is
    available to interactively view on the Crossrail 2 website and for more
    detail around safeguarding for Crossrail 2, see the Crossrail 2 website.
    In February 2018, a TfL Programmes and Investment Committee paper
    acknowledged that there was a risk emerging related to land and
    property costs because the existing safeguarding directions do not
    reflect the strategic outline business case route alignment. It had
    previously been intended that a revision to the directions would be
    made following a route-wide consultation in early 2018. However, that
    consultation has been postponed pending the outcome of the funding,
    financing and affordability work. 16

    14
       DfT, Crossrail 2 Safeguarding Direction Consultation Document, 20 November 2014,
        pp12-13
    15
       DfT, Summary of responses and the government's response to the consultation on
        updating the safeguarding for Crossrail 2, 24 March 2015; and Crossrail 2,
        Safeguarding [accessed 12 April 2017]
    16
       TfL, Programmes and Investment Committee – Crossrail 2, 21 February 2018
8   Crossrail 2

    3. The proposed scheme and
       route
    To date, TfL has published three consultations on the design and
    development of Crossrail 2. The initial consultation in May 2013 was
    conducted to provide stakeholders and the general public with
    information on the need for and background to the proposed new line
    and the development of possible future options. 17 It specifically
    proposed two detailed route options for Crossrail 2: 18
    1      Metro option - a stand-alone Underground line from
           Wimbledon to Alexandra Palace to provide a frequency of up to
           40 trains per hour and a peak capacity of up to 38,500
           passengers per hour per direction. The trains proposed in this
           option would be shorter than the regional option, with a tunnel
           diameter of 5.5 m, the same as for the DLR. This option shared
           most of its core route with the 2008 safeguarded alignment. 19
    Crossrail 2 metro option 20

    2      Regional option - would be similar in operation to Crossrail. The
           system is more extensive geographically than the Metro Option
           and in the length and capacity of the trains that would be used.
           The alignment of the central section would be similar, but would
           be extended at both the northern and southern ends of the route
           onto the suburban rail lines. The route could be built in stages and
           eventually serve the area shown in the figure below. 21

    17
       TfL, Crossrail 2 Consultation, 14 May 2013
    18
       TfL, Crossrail 2: Summary of Option Development, May 2013
    19
       ibid.
    20
       TfL, Crossrail 2 metro option, May 2013
    21
       op. cit., Crossrail 2: Summary of Option Development
9   Commons Library Briefing, 23 January 2019

    Crossrail 2 region option 22

    There was an overwhelmingly positive response to the initial
    consultation. Of the more than 13,000 replies received, 96% of the
    public respondents supported the principle of Crossrail 2. Support was
    high for both route options, but the Regional Option had the greatest
    overall level of support. 23 TfL said it would support as the preferred
    route for Crossrail 2 as it:
           …has the potential to generate greater benefits in terms of
           accessibility, congestion relief and contribution towards
           supporting London’s growth than the Metro option. Although
           more expensive than the Metro option, it addresses more of
           London’s long-term transport needs. 24
    A second consultation was conducted in June 2014 on some potential
    minor changes to the regional route option, including:
    •      Two route alignment options north of Angel serving Hackney or
           Dalston Junction;
    •      An alternative option for a possible new station in Chelsea; and
    •      A short extension of the route from Alexandra Palace to New
           Southgate. 25

    22
       TfL, Crossrail 2 regional option, May 2013
    23
       TfL, Crossrail 2 2013 Consultation – Response to issues raise, October 2013
    24
       TfL, Crossrail 2: Supplementary Consultation, 9 June 2014
    25
       For full detail, see: TfL, Crossrail 2 2014 Consultation – Non Technical Summary, June
        2014
10 Crossrail 2

    Crossrail 2 Route, as at Autumn 2015 26

    TfL published a third consultation in October 2015. This was concerned
    with new information relating to the preferred location of station
    entrances and exits, tunnel portals, shafts, depots, and construction
    worksites for the tunnelled section of the scheme, as well as proposed
    service patterns. 27 In July 2016 TfL published its response to the
    consultation. It stated that:
              No final decisions have yet been made on the proposed route for
              Crossrail 2 and this work will help to continue to develop
              proposals and inform that decision. At several locations -
              Wimbledon, Balham, Tooting Broadway, King's Road Chelsea,
              and the decisions on which stations should be served on the New

    26
         Mayor of London, Mayor’s Transport Strategy, March 2018, p172
    27
         TfL, Crossrail 2 - third consultation, 27 October 2015; a consultation analysis was
          published in March 2016, see: Steer Davies Gleave, Crossrail 2 Consultation Analysis,
          17 March 2016
11 Commons Library Briefing, 23 January 2019

          Southgate Branch- more work needs to be done to work through
          the issues, which include complex engineering challenges. 28
   A further public consultation was expected in autumn 2016 but none
   was published. 29 Crossrail 2 published an update for the project in May
   2018, again reiterating that no final decisions had been made around
   the route. It has been exploring the feedback received from the 2015
   consultation and has carried out further work to develop its approach,
   looking at ways to reduce the impact of the proposals across the whole
   of the route. Crossrail 2 intends to conduct a further route-wide public
   consultation on the latest proposals following the outcome of the
   Independent Affordability Review and decisions on the updated
   Strategic Outline Business Case. 30

   28
      TfL press notice, Crossrail 2 developed further in response to community comments, 7
       July 2016
   29
      TfL press notice, Crossrail 2 developed further in response to community comments, 7
       July 2016
   30
      Crossrail 2, Crossrail 2 Project Update, May 2018
12 Crossrail 2

    4. The business case for Crossrail 2
    Various proposals, with accompanying business cases, for a new rail line
    connecting the Chelsea-Hackney corridor have been made over the last
    few decades. This section provides a snapshot of the findings from
    those business cases, as well as those from the most recently available
    estimates. It should be noted that the benefits, costs and ratios provided
    below are not necessarily directly comparable because of changes to
    scheme scope across the various appraisal and they are not in equivalent
    real term prices.
    The latest iteration of Crossrail 2 dates to the January 1989 Central
                                                                                     The latest publicly
    London Rail Study, which was commissioned by the Thatcher                        available business
    Government. The business case outlined in that study revealed that a             case for the scheme
    Chelsea-Hackney scheme produce 90p of benefit for every £1 of cost (a            estimates that it
    benefit-cost ratio, or BCR of 0.9); by comparison the East-West Crossrail        would produce
    had a BCR of 1.6. 31 An economic assessment published in the Strategic           £1.8 of benefit for
    Rail Authority’s 2000 London East-West study found that a Crossrail line         every £1 of cost (a
    between Wimbledon-Hackney had a BCR of 2.1. 32                                   benefit-cost ratio,
                                                                                     or BCR of 1.8).
    A more recent February 2014 London First report gave the project a               When wider
    benefit-cost ratio of 1.8 (4.1 including Wider Economic Benefits), while         economic benefits
    PwC published a report commissioned by TfL in November 2014                      are included, this
    estimating that, without wider economic benefits, the Regional Option            rises to a BCR of 2.
    had a BCR of 1.8 compared to 1.3 for the Metro Option. When wider
    economic benefits are included, it was estimated that the Regional
    Option offered better value for money with a BCR of 2.0, compared to
    1.6 for the Metro Option. This is “driven by the benefits of enhancing
    accessibility to employment, especially from areas of London such as the
    Upper Lea Valley.” 33
    A detailed business case has been submitted to the Secretary of State by
    the integrated project team but it is not publicly available. The National
    Infrastructure Commission (NIC) had previously emphasised the need for
    the business case to maximise the benefits of the scheme, to ensure its
    deliverability and to improve its affordability. 34 Specifically, it said that
    the business case should:
           …include detailed options to reduce and phase the costs of the
           scheme. The most promising option identified to enhance
           affordability would be to delay the construction of the
           northwestern branch to New Southgate. This could reduce the
           costs of the initial scheme in the 2020s by around £4 billion. 35
    The Crossrail 2 Growth Commission, set up by former Mayor Boris
    Johnson in 2015, also commented that “further technical work on

    31
       DoT, British Rail and LRT, Central London Rail Study, January 1989, p19
    32
       SRA, London East-West Study, November 2000, p13
    33
       PwC, Crossrail 2 – Funding and financing study, 27 November 2014, p11
    34
       op cit., Transport for a world city, p58
    35
       op cit., Transport for a world city, p12
13 Commons Library Briefing, 23 January 2019

   growth opportunities and on key policy and delivery requirements
   should be done as the business case is updated.” 36

   4.1 Benefits
   Crossrail 2 would deliver several benefits to the London transport
   system, particularly in terms of easing congestion on other parts of the
   network and improving travel time and accessibility for those residents
   who will be connected by the new line. The scheme is also likely to
   deliver wider economic benefits through productivity improvements,
   economic growth and a boost in employment prospects along the
   supply chain of the project. According to PwC, “the benefits will be
   widely spread both within and outside the London boundaries.” 37
   Transport benefits
   In March 2016 the NIC published its report on London transport
   infrastructure which set out several of the possible transport benefits
   that would likely be delivered by the Crossrail 2 scheme and included: 38
          •      Provide vital relief for the congested southern end of the
                 Northern Line and for the Victoria Line through north-east
                 and central London. These are forecast to see much of the
                 highest levels of crowding anywhere on the Underground,
                 after the opening of Crossrail 1.
          •      Provide an alternative route, via its connection to Crossrail
                 1, from southwest London to the City and Canary Wharf,
                 reducing passenger numbers on the overcrowded Waterloo
                 and City line and the eastern part of the Jubilee Line.
          •      Relieve capacity constraints on the critically over-crowded
                 south-west London commuter lines coming into the capital
                 through Wimbledon, Clapham Junction and Waterloo by
                 providing an alternative route for inner suburban services
                 via a new tunnel from Wimbledon into Central London.
          •      Reduce terminal congestion at the UK’s busiest station,
                 Waterloo, as well as cutting crowding levels at Clapham
                 Junction, Vauxhall and Wimbledon, all of which are
                 forecast to face insuperable operational difficulties due to
                 the volume of passengers at peak hours.
          •      Release capacity on the existing south-west network for
                 longer distance services from Basingstoke, Woking,
                 Guildford, Southampton and beyond.
          •      Provide four tracks on the West Anglia Mainline to enable
                 faster services on the London-Stansted-Cambridge
                 Corridor.
          •      Link with Euston/St Pancras, to provide onwards dispersal
                 for those arriving into London from the north on HS2,
                 which is planned to be completed to Manchester and Leeds
                 in 2033.

   36
      Crossrail 2 Growth Commission, Crossrail 2 - Delivering Growth in London
   and the South East, October 2016, p13
   37
      op cit., Crossrail 2 – Funding and financing study, p5
   38
      op cit., Transport for a world city, p9
14 Crossrail 2

             •     Establish a turn-up-and-go level of service at a range of
                   underserved destinations allowing for regeneration around
                   transport hubs in Hackney, Haringey, Enfield and
                   Tottenham.
    In identifying these benefits, the NIC concluded that “no alternative
    proposal or proposals have been found that effectively deal with the
    challenge of Underground capacity once all proposed Underground line
    upgrades are exhausted, or which can effectively mitigate the crowding
    and dispersal challenges at Waterloo, Euston, Victoria and Clapham
    Junction.” 39
    Wider Economic Benefits
    The conventional economic assessment of the Crossrail scheme is based
    primarily on benefits to existing transport users. A parallel strand of
    analysis was undertaken by KPMG, on behalf of TfL, to quantify the
    potential Gross Value Added (GVA) benefits from the Crossrail 2
    scheme as a consequence of providing capacity that removes the
    transport constraints to delivering the full productivity/economic density
    potential of London’s Central Activity Zones. According to the NIC, “this
    work was work commissioned in response to concerns that traditional
    transport appraisal methodology did not capture all of the benefits of
    transport infrastructure investments of this scale.” 40
    The conclusion of the work was a range of UK net GVA impact of
    between £16bn and £102bn Present Value (PV) (at 2011 prices)
    depending on model assumptions and nature and scale of elasticity
    adopted, with a mid-point PV range of between £33bn and £47bn. The
    report also found that Crossrail 2 could deliver 200,000 new homes and
    support 200,000 jobs across London and the South East, with the
    supply chain supporting thousands more jobs around the country,
    adding over £1bn to the West Midlands economy, over £200m to the
    North East and up to £170m to the Scottish economy. 41

         How accurate are estimates of wider economic benefits?
         It should be noted that the wider economic benefit estimated for
         Crossrail 2 are based on new and developing methodologies and,
         according to the NIC, “are highly uncertain in comparison to
         traditional value-for-money assessments.” Such methodologies
         have been applied to other major infrastructure projects, including
         Crossrail 1, HS2 and the Heathrow Third Runway scheme. The main
         reason for applying these methodologies is to improve the business
         cases of these schemes, highlighting the more transformational
         economic change that may be delivered by these ‘mega projects’,
         compared to other smaller schemes.
         These methodologies have not been spared from criticism. For
         example, a panel of experts told the Treasury select committee that
         a KMPG report into HS2's regional economic impacts published in

    39
       op cit., Transport for a world city, p10
    40
       op cit., Transport for a world city, p36
    41
       TfL press notice, Research confirms benefits of Crossrail 2, 28 September 2015
15 Commons Library Briefing, 23 January 2019

        September overstated the benefits by six to eight times. Criticism
        was also levelled at the way the wider economic benefits were
        estimated as part of the business case for the Heathrow Third
        Runway scheme. The Airports Commission’s expert economic
        advisers expressed concerns about the findings generated by the S-
        CGE model, cautioning the Airports Commission against “attaching
        significant weight either to the absolute or relative results of the S-
        CGE approach within the Economic Case.”
        In short, it is reasonable to conclude, in general terms, that the
        wider economic benefits of such schemes exist but it is difficult to
        precisely estimate the extent of those benefits. This is reflected in
        the range of estimated wider economic benefits for Crossrail 2.

   The NIC recommended that “[…] TfL and DfT in conjunction with other
   government departments and relevant bodies, use the next stage of
   development to set out a clear, transformative plan to turn the
   proposed 200,000 homes into a reality.” 42 It made two further
   recommendations on key elements of the scheme. In summary these
   were:
            •     Strong measures to maximise the new housing enabled by
                  the scheme should be included in the ‘London deal for
                  Crossrail 2’–this could include the establishment of one or
                  more development corporations to lead the master
                  planning and delivery of new housing and urban realm
                  provision, and revised planning guidance for the whole
                  route. These measures should be considered as a potential
                  model for improving housing delivery more widely.
            •     For housing provision to be a success across the whole
                  route, the London deal for Crossrail 2 will need to have
                  buy-in from the GLA and London boroughs along the route
                  as well as counties and boroughs outside of London which
                  benefit from the new line. All parties will need to ensure
                  the housing unlocked by Crossrail 2 is sustainable and
                  meets the needs of Londoners and those in commuter
                  regions around London. 43

   4.2 Costs
   The Chelsea-Hackney line had an outline capital cost of £1.33 billion
   when it was estimated as part of the 1989 Central London Rail Study. 44
   The costs for the project were later estimated at £2 billion (in 1992
   prices) when safeguarding directions for the Chelsea-Hackney line were
   issued by the Secretary of State for Transport in 1992. 45 The 2000
   London East West Study estimated the cost of the scheme at £5.3
   billion (in 2000 prices). 46

   42
      op cit., Transport for a world city, p13
   43
      ibid., pp12-13 [recommendations 4 and 6]
   44
      DoT, British Rail and LRT, Central London Rail Study, January 1989
   45
      HC Deb 3 March 1992, c87W
   46
      SRA, London East-West Study, November 2000, p13
16 Crossrail 2

    The February 2014 London First report, referred to earlier, put a cost
    estimate on the project of £12 billion in 2012 prices (plus £8 billion
    contingency). Mott MacDonald was commissioned by TfL to undertake
    a full engineering feasibility and capital cost study for each of the Metro
    and Regional Options, the latter of which is the option that has been
    taken forward. Mott McDonald estimated that the total capital cost of
    the Metro and Regional Options at £20.5 billion and £27.5 billion
    respectively. A cost-break down is provided in the table below. When
    appraising major projects at this stage of planning HMT guidance
    requires that 66% optimism bias is added to the capital cost estimates,
    which is factored into the cost breakdown below. This optimism bias is
    “applied to reflect the potential for cost estimates to increase during the
    development of a project, both for changes in scope and unit costs.” 47
    Capital expenditure for the Regional and Metro Options, £
    million, (2014/15 prices) 48
     Cost category                             Regional                Metro
     Land & property                           1,164                   1,069
     Tunnels                                   2,299                   1,826
     Stations                                  5,664                   5,323
     Systems                                   1,430                   1,153
     Surface works                             2,617                   490
     Indirects                                 2,071                   1,760
     Rolling stock                             1,352                   712
     Optimism bias at 66%                      10,947                  8,133
     Total                                     27,544                  20,466

    Crossrail 2 was estimated by TfL in 2016 to be £32.6bn. With respect to
    scheme costs, the NIC commented:
           It is important that Crossrail 2, learns from the experiences of
           Crossrail 1 and other major infrastructure projects. This includes
           keeping scope and costs under review, establishing clear
           governance structures and ensuring that phasing is considered in
           order to maximise affordability. In particular, there is strong
           potential for phasing the northern branches of Crossrail 2 to
           reduce the initial costs of the scheme and this should be given
           thorough consideration. 49
    As announced by the Chancellor in the 2017 Autumn Budget, the DfT
    and TfL have commissioned an Independent Affordability Review to
    examine ways of making the scheme more affordable. Mike Gerrard,
    the former managing director of Thames Tideway, has been appointed
    to chair the review. 50 Reports in the Financial Times suggest that the

    47
       op cit., Crossrail 2 – Funding and financing study, p14
    48
       ibid.
    49
       op cit., Transport for a world city, p11
    50
       Crossrail 2 press notice, Major new review brings Crossrail 2 closer, 5 March 2018
17 Commons Library Briefing, 23 January 2019

   costs “may add up to more than £45bn — significantly more than the
   initial £31bn estimate, which is based on 2014 prices.” 51 Managing
   Director Michèle Dix believes that the project remains in a “good place”
   and said it was exploring options of way it could reduce the costs of the
   scheme:
            There are a number of things we have looked at in terms of
            making it more affordable. One is whether you can deliver it in
            phases so we could reduce pressure on us in terms of paying half
            up front. If you phased construction then you could at least collect
            fares and take advantage of oversite development opportunities. 52

        How does Crossrail 2 compare with Crossrail1?
        Crossrail 1 is the plan to integrate the mainline railways to the east and
        west of London through the construction of two tunnels beneath central
        London from Paddington to Liverpool Street. Construction on the scheme
        started in 2009 when works got underway at Canary Wharf station.
        Crossrail services were originally intended to be introduced to open in
        December 2018 but have been delayed, possibly for another two years.
        In terms of value for money, the 2011 business case for Crossrail 1
        estimated that the scheme would produce £1.97 of benefit for every £1 of
        cost (a benefit-cost ratio, or BCR of 1.97). Once wider economic benefits
        were included, this increased to a BCR of 3.09. The latest publicly available
        business case for Crossrail 2 estimated that it would produce a BCR of 1.8
        and when wider economic benefits are included, this rises to a BCR of 2.0.
        When comparing the respective value for money estimates of the two
        schemes, it is important to note that neither of the stated BCRs above
        reflect the actual value for money of the scheme, as the costs have
        increased for Crossrail 1 since these estimates were produced and the
        business case is yet to be finalised for Crossrail 2.
        In terms of scheme capital costs, the original funding envelope agreed in
        the 2010 Spending Review for Crossrail 1 was £14.8 billion. In December
        2018, the Government formally announced Crossrail’s third additional cash
        injection, bringing the overall funding envelope for the project to £17.6
        billion. Crossrail 2 was estimated by TfL in 2016 to be £32.6bn. The
        Crossrail 2 business case is currently being reviewed and a revised business
        case is being developed, with reports suggesting that the scheme may add
        up to more than £45bn.
        It should be noted that it is difficult to make direct comparisons between
        the capital costs of the two schemes, mainly because the projects have
        been costed and will be delivered many years apart from one another. The
        cost estimates above reflect the total amount of money spent or expected
        to be spent, in nominal terms, over the construction period for each
        scheme. If a comparison was to be made, the expenditure for both
        schemes would have to be converted into equivalent prices. The spending
        profile of the schemes is not publicly available and as such this comparison
        cannot be made in this paper.
        In terms of the construction timelines, Crossrail 1 will have taken over 10
        years to complete from when construction started in 2009. Similar
        timescales are projected for Crossrail 2, with a hybrid bill hoped to be
        approved by 2021/22 and the project finished in the early 2030s.

   51
      ‘Transport for London warns Crossrail 2 could be delayed by decade’, Financial Times,
        3 October 2017
   52
      The Crossrail 2 conundrum: How will the £30bn scheme be paid for?, Infrastructure
        Intelligence, 7 December 2018
18 Crossrail 2

     For more detailed information about the Crossrail scheme, see the House
     of Commons Library Briefing Paper Crossrail (Elizabeth Line).
19 Commons Library Briefing, 23 January 2019

   5. Funding & financing
   Funding and financing are terms which are often used interchangeably.
   It is important to clarify the distinction between the two terms:
   •      Funding comprises the sources of income to be used to meet the
          capital and revenue costs of a project over time; and
   •      Financing comprises the set of financial arrangements put in
          place to provide committed capital to meet the costs of a project
          as they are incurred, to be repaid from funding sources. 53
   In November 2014 TfL published a study by PwC, which provides the
   most-comprehensive analysis to date as to how the Crossrail 2 could be
   funded and financed. The report revealed that up to 50% of the project
   could be funded by a combination of local funding sources, with the
   remainder of the funding provided by central government either
   through direct grants or via Network Rail, as was the case with Crossrail
   1. Of the funding envelope that was initially agreed for Crossrail 1, over
   60% of the project’s funding has been provided by Londoners and
   London businesses and many of the same mechanisms will be applied to
   Crossrail 2. 54 The PwC study estimated that the mechanisms listed
   below would account for the bulk of the London contributions for the
   scheme: 55
   •      Farebox and ancillary revenues - analysis showed that the
          project is relatively strong in terms of projected generated revenue
          when compared with many other public transport projects. This
          will provide about 20% of the funding requirement.
   •      Business Rate Supplement (BRS) 56 – the BRS will continue to be
          applied once the Crossrail 1 debt has been repaid. It was expected
          that BRS revenues would only be available to Crossrail 2 from
          2033 as those revenues are still being directed to paying off
          Crossrail 1. That is, some 3 years after opening. Whereas, the BRS
          that helped finance Crossrail 1 was introduced some 8 years in
          advance of the opening of Crossrail 1.
   •      Mayoral Community Infrastructure Levy (CIL) – the CIL is a
          compulsory per metre squared charge that local authorities in
          England can choose to levy upon new development as a condition
          of granting planning consent. In London, the Mayor has powers
          (under the Planning Act 2008) to introduce a London-wide
          Mayoral CIL for the purpose of delivering local and sub-regional
          large-scale transport infrastructure. These revenues will be a
          source of funding once the Crossrail 1 contributions from Mayoral
          CIL and the Section 106 scheme of £600 million have been made.

   53
      op cit., Crossrail 2 – Funding and financing study, p19
   54
      Crossrail, Funding [accessed 10 January 2019]
   55
      More a comprehensive discussion of each of these mechanisms, see: PwC, Crossrail 2
       – Funding and financing study, 27 November 2014
   56
      For more detailed information, see: London Assembly, Paying for Crossrail: business
       rate supplement [accessed 3 January 2019]
20 Crossrail 2

              The BRS and CIL are estimated to contribute an amount
              equivalent to 21% of the funding requirement of the Crossrail 2
              project. It was intended that MCIL2 will be levied from April 2019
              but it is uncertain now because of the project and cost overruns
              with Crossrail 1. 57
    •         Sale of construction sites or development opportunities–
              there is the potential for the sale of development opportunities
              and sites required for the construction of Crossrail 2, after they
              are no longer needed for the scheme.
    •         Council Tax Precept – The BRS being used to fund Crossrail 1 is
              a property levy that is paid only by businesses. The Mayor could
              obtain revenue from all types of properties by exercising his power
              to levy a Council Tax Precept on homes. This is an established
              mechanism used in the UK to provide funding for entities
              (‘precepting authorities’) that carry out activities separately from
              the local council that levies and collects Council Tax. PwC believe
              that “the introduction of such a precept could be challenging
              [and] could be subject to opposition from Council Tax payers,
              which was the case for the Olympics Levy, where there were
              certain cases of principled non-payment that received press
              coverage.” 58
    Funding mechanisms 59

                                         % of funding target      Cumulative total

        Project generated revenue        20.0%                    20.0%
        BRS                              15.2%                    35.2%
        Enhanced Mayoral CIL             5.8%                     41.0%
        Resale of land and property      1.9%                     42.9%
        Doubling of Mayoral CIL          5.8%                     48.7%
        Council tax precept              1.9%                     50.2%

    The PwC paper identified the possibility of contribution from property
    and landowners by using other land value capture mechanisms. Land
    value capture refers “to a set of mechanisms used to monetise the
    increase in land values that arise in the catchment area of public
    infrastructure projects.” 60 For example, PwC explored the possibility of
    capturing the uplift in business rates and Borough CIL that would be
    expected to arise from the enhanced investment activity and property
    values in the areas around Crossrail 2 stations. This is a form of ‘Tax
    Increment Financing’, which draws on the experience of developing the
    funding package for the Northern Line Extension. But the scope of this
    contribution is limited because of the administrative complexity of

    57
       Mayor of London, MD2123 Mayoral Community Infrastructure Levy 2 (MCIL2), 12
         June 2017
    58
       op cit., Crossrail 2 – Funding and financing study, p39
    59
       ibid., p7
    60
       TfL, Land value capture – Final Report, February 2017
21 Commons Library Briefing, 23 January 2019

   implementing these value capture mechanisms. Also, there are fewer
   large landowners who are likely to contribute directly to the scheme, in
   the same way that for example Canary Wharf Group and BAA made
   direct contributions to Crossrail 1. PwC concluded that the total funding
   that could be raised through this approach “is relatively small in
   proportion to the scheme costs, and that there would be significant
   risks attached to it.” 61 PwC estimated that value capture around
   Crossrail 2’s stations would only raise an estimated 1% of the project’s
   funding requirement.
   The PwC report also explored the possibility of private financing, at least
   in part, contributing toward the capital costs of Crossrail. It concluded
   that the scope for private financing was likely to be small:
          … while there are opportunities to introduce private finance into
          elements of the Crossrail 2 project, the proportion of the project
          that could be privately financed is relatively small, as privately
          financing the core infrastructure project is unlikely to be feasible
          or to provide value for money. The scale of Crossrail 2 makes it
          too big for the financing market to handle as a single privately-
          financed project. It may be possible to fund smaller components
          of the works but these would have to be carefully selected, as it is
          difficult to break down a rail network into component assets
          without introducing interface risks that could increase costs. In
          addition, changes to accounting and classification rules make it
          less likely that structures will be considered “off balance sheet” in
          circumstances where the public sector is effectively the only
          customer for track access. The prime candidate for private
          financing would be the rolling stock and depot, as there are viable
          PFI/PPP options for such projects. Until recently, this was being
          considered for Crossrail 1 rolling stock, and it may be a viable
          option for Crossrail 2. 62
   These conclusions on the use of private finance are consistent with the
   findings of the Montague report ahead of Crossrail 1 and the
   experience on Crossrail 1. 63 It also looked at the likely willingness of
   Sovereign Wealth Funds, Infrastructure Funds, Pension funds and other
   similar investors to invest in Crossrail 2 and concluded:
          While there is no doubt that these investors are keen to invest in
          infrastructure, Crossrail 2 is unlikely to meet many of their
          investment requirements. The size of the project, the construction
          risk, the demand risk and the likely reliance on non-patronage
          revenues to pay the bulk of the project means that, without direct
          government guarantees, such investors are unlikely to invest in
          Crossrail 2. If such guarantees were to be put in place it is possible
          that the project’s borrowing costs could be treated as public debt,
          but would have a higher private sector level cost of finance. 64
   The March 2016 NIC report made several recommendations on finding
   appropriate funding for the scheme. In particular, it emphasised the

   61
      For a comprehensive discussion of land value capture mechanisms and they may apply
        in London, see: TfL, Land value capture – Final Report, February 2017
   62
      op. cit., Crossrail 2 Funding and financing Study, 27 November 2014, p6
   63
      Montague, A., Crossrail Review, 2004
   64
      ibid., p7
22 Crossrail 2

    need for a funding agreement, in which London contributes more than
    half the costs of the scheme, to be agreed ahead of any hybrid bill
    submission. It also stated that the: 65
           […] government should work with TfL and GLA to explore new
           funding options, which could include consideration of further
           devolution. However, even without such devolution, HM Treasury
           should be in a position to recoup significant receipts from the
           added Gross Value Added (GVA) benefits and the rising value of
           property in London.
    The NIC also recommended that private sector involvement in the
    development and funding of stations be maximised. 66 The Crossrail 2
    Growth Commission report also emphasised the need to maximise the
    “gain share” from any uplift in land values.” 67 A report by property
    companies, published in April 2017, suggested that London could pay
    for half the cost of Crossrail 2 through further commercial development
    in the West End:
           Private sector funding could come from the creation of great,
           much-needed new places in the country’s most economically
           productive district – the West End. With Crossrail 2, the West End
           could viably support more enterprise. And the commercial
           development of new employment space to host that enterprise
           could in turn help pay for Crossrail 2 through development taxes
           or local retention. 68
    London First, which is a business campaigning group, published an
    updated report in July 2018 outlining how Crossrail 2 could be funded.
    As part of this, it established a working group of its members to explore
    potential options. In addition to the funding package identified by PwC
    above, the working group identified three ‘tried and tested’ funding
    options, listed below, and encouraged maximising land value capture
    options identified in the PwC report: 69
    •      A one-off London-wide fares rise of 1% on Tube and TfL rail in
           the early 2020s would generate around £30m per annum. A
           similar rise on South Western Railway and West Anglia Main Line
           services could generate an additional £5–10m p.a.
    •      Crossrail 2 precept of £40 for a band D London property could
           generate around £150m p.a. A similar precept for districts in
           Hertfordshire and Surrey with a Crossrail 2 station could raise
           around £8.5m p.a.
    •      A higher BRS in the 2020s to help provide upfront funding for the
           scheme. The existing BRS is forecast to bring in £270m p.a. in the
           2020s – so an extra 0.5p increase would be worth around £68m
           p.a.

    65
       op cit., Transport for a world city, p11
    66
       ibid., pp12-13
    67
       op cit., Transport for a world city, p4
    68
       ‘We should build Crossrail 2 and the private sector is going to pay for it’, City A.M., 3
         April 2017
    69
       London First, Paying for Crossrail 2, July 2018, p3
23 Commons Library Briefing, 23 January 2019

   As mentioned, an updated affordability review into Crossrail 2 is
   ongoing and is exploring other options for funding and financing.
24 Crossrail 2

    6. Recent political developments
    Crossrail 2, London’s next major transport project, was supposed to
    follow on from Crossrail 1 – The Elizabeth Line. There had been
    widespread support for Crossrail 2, particularly from London politicians.
    Consecutive Conservative and Labour mayors of London have backed
    the scheme. Former Mayor of London Boris Johnson illustrated his
    support of the scheme through the creation of a ‘Growth Commission’
    for Crossrail 2 in July 2015. 70 Sadiq Khan has also been a strong
    advocate for the scheme since assuming the Mayoralty. 71
    Recent UK Government in-principle support for the scheme was
    catalysed by the March 2016 National Infrastructure Commission report
    that recommended Crossrail 2 be taken forward “as a priority”. 72 The
    Treasury’s response to the report was published in April 2016. It agreed
    with the Commission’s recommendations and stated that “the
    government agrees that Crossrail 2 should be taken forward as a
    priority”. 73 In response, the Chancellor committed £80m to support the
    drafting of a Hybrid Bill, necessary to secure powers to construct the
    scheme, with the Mayor providing a further £80m of match-funding. 74
    The Chancellor’s decision was predicated on the Secretary of State for
    Transport affirming his commitment to the Hybrid Bill preparation by
    endorsing an updated Strategic Outline Business Case (SOBC). Mayor
    Sadiq Khan had already confirmed his commitment 75 and, under the
    assumption that a Government decision would be made by May 2017,
    TfL believed that “a Hybrid Bill could be submitted in 2019 which could
    enable construction starting in the early 2020s, with the first Crossrail 2
    service running in 2033”. 76
    The updated SOBC was submitted to the Government in March 2017
    but the general election that year delayed the Government’s response
    to it. Following an external review by the Infrastructure and Projects
    Authority, 77 the Mayor of London and the Secretary of State for
    Transport issued a joint statement on 24 July 2017 supporting the
    scheme and agreeing to examine ways to improve affordability while

    70
       Mayor of London press notice, Mayor announces creation of Crossrail 2 Growth
        Commission, 17 July 2015; other members of the Commission were announced in
        September 2015, see: TfL press notice, Crossrail 2 Growth Commission Announced,
        16 September 2015
    71
       Crossrail 2, 10 reasons why the UK needs Crossrail 2 now, 1 November 2016
    72
       NIC press notice, 'Crossrail 2 will keep London moving, we should get on with it right
        away' – Adonis, 10 March 2016
    73
       HM Treasury, Transport for a world city: government response to the National
        Infrastructure Commission's report, 13 April 2016
    74
       TfL, Programme and Investment Committee – Crossrail 2, 21 February 2018
    75
       op. cit., 10 reasons why the UK needs Crossrail 2 now
    76
       TfL press notice, Crossrail 2 developed further in response to community comments, 7
        July 2016
    77
       National Infrastructure Commission, Annual Monitoring Report 2018, February 2018
25 Commons Library Briefing, 23 January 2019

   maximising the key benefits of the scheme, with a view to London
   meeting half the costs of the project during construction. 78
   In his Budget Statement published on 22 November 2017, the
   Chancellor said that the Government would continue to work with TfL
   to develop plans for Crossrail 2. 79 DfT and TfL subsequently
   commissioned an Independent Affordability Review to examine ways of
   making the scheme more affordable. It was intended that at the end of
   the review, Crossrail 2 would update the business case “reflecting the
   affordability work, before supporting the Government’s assessment
   process, formalising design changes and updating the route wide and
   safeguarding consultation materials.” 80
   The NIC published its annual monitoring report in February 2018 and
   called “on Government to ensure the independent review of the
   funding and financing of Crossrail 2 is completed as soon as possible,
   with a view to setting out a firm timetable and funding proposal by the
   end of 2018.” It added that the aim should be to open Crossrail 2 in the
   early to mid-2030s. 81
   The Mayor published his Transport Strategy in March 2018, with it
   stating that “Crossrail 2 is essential to London’s future” and that the
   “Mayor aims to open Crossrail 2 by the early 2030s.” 82 In a
   November 2018 letter to London Assembly Transport Committee
   Chair Caroline Pidgeon, Sadiq Khan that Tfl was still working with
   the DfT and Network Rail to reach agreement on Crossrail 2’s shape
   and scope. 83

   78
      DfT press notice, Crossrail 2: a way forward, 24 July 2017
   79
      HC Deb 22 November 2017, c1051
   80
      Crossrail 2, Crossrail 2 Project Update, May 2018
   81
      op. cit., Annual Monitoring Report 2018
   82
      Mayor of London, Mayor’s Transport Strategy, March 2018, p25
   83
      Mayor of London, Letter to Caroline Pidgeon MBE AM Chair of the Transport
       Committee, 6 November 2018
26 Crossrail 2

    7. Challenges for Crossrail 2
    7.1 Funding
    Funding Crossrail 2 was always going to be a difficult task and rests to a
    large degree on London raising half of the funds required to cover the
    capital costs of the scheme. 84 Crossrail 2 believes that London can meet
    its share of the funding requirements, but so far their case rests on the
    assumptions laid out in the PwC report of 2014. 85
    The PwC report expressed concerns over the political feasibility of some
    of these funding proposals, particularly the ability to double the Mayoral
    CIL and implement a council tax precept. 86 Even if these mechanisms
    were feasible, only part of the funding laid out by TfL is available in the
    2020s when construction will be at its peak. 87
    London’s ability to meet its end of the funding arrangements has been
    made more difficult by the delays and cost overruns to Elizabeth Line.
    TfL finances were contingent on the scheme being operational by the
    end of 2018. TfL had predicted in its business plan that Crossrail would
    bring £829m of operating income — tickets and commercial revenue —
    in 2020-21, the first year the line would make a direct surplus. 88 Credit               Crossrail 2 will
    rating agency Moody’s predicted in November 2018 that TfL will lose at                   undoubtedly deliver
    least £600 million from the delayed opening. The longer the Elizabeth                    benefits for London
    Line is delayed, the more it will cost TfL. 89                                           and the wider
                                                                                             economy but with
    There are reports that the Elizabeth line may not open in-full for another               an increasingly
    two years and costs may rise by over £1 billion. 90 Crossrail 2 relies upon              uncertain funding
    funding sources that are still being used to fund Crossrail 1, including                 landscape, it is not
    the Business Rate Supplement. Until Crossrail 1 is paid-off, these                       clear if or when the
    funding mechanisms remain inaccessible to Crossrail 2.                                   project will get the
                                                                                             go-ahead.
    7.2 Political support
    Central government funding support for the project is not guaranteed
    yet and rests upon Crossrail 2 delivering a viable business case to the
    Secretary of State. Even then, there are wider political uncertainties
    surrounding Brexit and HS2. It is not clear what such eventualities might
    mean for the central government funding envelope and the
    contribution to Crossrail 2.

    84
       Mayor and Transport Secretary agreed that London would attempt to fund half of the
         scheme during construction.
    85
       Crossrail, Funding [accessed 14 January 2019]
    86
       op. cit., Crossrail 2 Funding and financing Study, p39-41
    87
       London First, Paying for Crossrail 2, July 2018, p3
    88
       TfL, Business Plan 2019/20 to 2023/24, December 2018
    89
       ‘Crossrail delay to put ‘significant financial strain’ on TfL’, Financial Times, 28
         November 2018
    90
       ‘Crossrail scheme given £1bn bailout - paid for by London businesses’, London
         Evening Standard, 10 December 2018
27 Commons Library Briefing, 23 January 2019

   HS2 is due to submit its revised costings to feed into the upcoming
   spending review. There are reports that the costs of the scheme may
   rise from the £56 billion currently estimated in the latest business case. 91
   Liz Truss, Chief Secretary to the Treasury, recently suggested that the
   Government “must be prepared to 'junk white elephant' projects”. 92,
   Were the projected costs of HS2 to increase significantly, there may be
   less appetite and funding left for another major transport project such
   as Crossrail 2.
   While the scheme still retains strong political support, 93 it is not
   universal. Several MPs and wider campaign groups have argued that
   expenditure on Crossrail 2 is a continuation of a trend of higher
   infrastructure spending in the South-East, 94 to the detriment of other
   regions. 95

        When will Crossrail 2 be delivered?
        It is impossible to know with certainty when Crossrail 2 will be delivered. If
        Crossrail 2 were eventually approved, a hybrid bill would be required in the
        same way as Crossrail 1. TfL had previously anticipated submitting a hybrid
        bill in 2019, but this is looking increasingly unlikely. Crossrail 2
        subsequently expected “to seek permission to build the new line between
        2021 and 2022.” 96
        Parallels can be drawn with the Crossrail 1 project to understand possible
        timescale for Crossrail 2. In terms of Parliamentary approval, the hybrid bill
        for Crossrail 1 took over three years to receive Royal Assent, having been
        presented to Parliament in February 2005. In terms of the construction
        timelines, Crossrail’s construction would have taken over 10 years to
        complete from its commencement in 2009.
        If a hybrid bill were submitted for the Crossrail 2 scheme in 2020, and
        assuming similar timescales for the Crossrail 1 hybrid bill, the scheme may
        anticipate receiving parliamentary approval by 2023. In terms of
        construction timelines, Crossrail 2 are anticipating a construction timeline
        of around a decade. Crossrail 2, in a best-case scenario, is therefore
        unlikely to be delivered and operational until at least the early to
        mid-2030s.

   91
      ‘HS2 budget ‘will balloon to £80bn’, says secret report’, The Times, 22 July 2018
   92
      ‘Liz Truss hints controversial HS2 link could be scrapped amid spiralling costs as she
        says the Government must be prepared to 'junk white elephant' infrastructure
        projects’, Daily Mail, 6 January 2019
   93
      'Crucial stage' reached for Crossrail 2 project, London Evening Standard, 21 April
        2017
   94
      For more detailed briefing on infrastructure spending, including a regional breakdown
        of spending, see: Infrastructure policies and investment, Commons Library Briefing
        Paper 6594, 10 July 2018
   95
      IPPR press notice, Anger growing as campaigners issue fresh demand for ‘Crossrail for
        the North’, 25 July 2017
   96
      Crossrail 2, What are the next steps for Crossrail 2? [accessed 11 January 2018]
You can also read