If London wants Crossrail 2, the Treasury will need to stump up a lot more cash

Image: TfL.

Is there no end to the gentrification of central London? Ageing bohemians still haven’t got over the demolition of several clubs to make way for Crossrail – not to mention the closure of Soho nightspot Madame Jojo’s last year.

They recently had another bout of hypertension, when Transport for London (TfL) released a map showing that they might want to knock down the Curzon, an arthouse cinema down the road, to make way for Crossrail 2. (There was much less clamour about the possible demolition of Electrowerkz in Angel; evidently, goths have poor lobbyists).

Both Crossrail, the new east-west railway tunnelling its way under London, and Crossrail 2, its southwest-northeast younger brother, have the effect of pushing up house prices wherever they go, and encouraging the owners of Madame Jojo’s and the like to put their assets to more profitable use.

Already, large and very bland looking slabs of shops and offices are being planned for the new Crossrail stations on Oxford Street; a shopping centre on top of the Canary Wharf station is to open this spring, three years before the first train arrives. So would Crossrail 2 see even more cultural vandalism, as critics would say, if it gets approved?

Perhaps not. Perhaps the railway won’t get built at all. Because at the moment, it’s facing a funding gap of several billion pounds.

Crossrail 2 would cost what infrastructure professionals would call “a lot of money”. The current estimate is around £25bn: that’s compared to £14.8bn for Crossrail, or as much as 30 per cent of a new “Boris Island”-type airport in the Thames Estuary. Phew. And nobody really knows where all that money will come from.

The reason why Crossrail has spurred the redevelopment of parts of London, for better or worse, is that a) there was land ripe for redevelopment and b) the route connects up places where high value earners want to travel to, like the City and Canary Wharf. Crossrail 2 will go to neither, and the amount of property development it’s expected to spark is consequently lower. What’s more, many of the most attractive sites for redevelopment, in places like Oxford Street, have already been snapped up due to, er, Crossrail.

That might be fine, if there were serious quantities of taxpayer cash on the table. There isn’t.

The proposed route. Click to expand.

TfL, the Greater London Authority and Network Rail are borrowing roughly two-thirds of the cost of Crossrail – debts they’ll repay through local funding sources, such as a supplement on business rates. That leaves roughly one-third of the project’s cost that’s been covered by a grant from central government.

When TfL commissioned financial advisers at PwC to look at how to pay for Crossrail 2, they found only half of the cost could be met by local funding sources – leaving the Treasury on the hook for a larger share of a larger project.

Far from paying a bigger chunk, however, City Hall seems to think Whitehall would be tighter when it came to Crossrail 2. Isabel Dedring, Boris’ deputy mayor for transport, has said that public funding will have to be “substantially smaller” this time round. With more austerity and the building of HS2 round the corner, this looks entirely plausible.

London could try to borrow money against the additional business rate revenues it expects to get from new property developments that get built as a result of Crossrail 2: that is exactly how TfL is paying for the Northern Line Tube extension to Battersea, which will see a new housing development built nearby.

But Crossrail 2 simply isn’t expected to trigger that much building. As PwC wrote:

“ [Incremental business rates income] is forecast to contribute a relatively small amount to the project’s funding requirement, in the region of 0.7 per cent... It is questionable whether it is worth separately identifying and gathering it, unless there is a significant increase in forecast commercial development around the Crossrail 2 stations.”

So not only is Crossrail 2 not likely to cause much demolition, it may not cause as much gentrification as its predecessor either. That’s if it ever gets off the ground at all.

René Lavanchy is a recovering infrastructure finance journalist and tweets at @InfraPunk.

 
 
 
 

Mayor Marvin Rees' hope for Bristol: A more equitable city that can 'live with difference'

“I call on everyone to challenge racism and inequality in every corner of our city," Bristol Mayor Marvin Rees says. (Matt Cardy/Getty Images)

When the statue of 18th century slave trader Edward Colston was torn from its plinth and dumped in Bristol’s harbour during the city’s Black Lives Matter protests on 7 June, mayor Marvin Rees was thrust into the spotlight. 

Refraining from direct support of the statue’s removal, the city’s first black mayor shared a different perspective on what UK home secretary Priti Patel called “sheer vandalism”:

“It is important to listen to those who found the statue to represent an affront to humanity,” he said in a statement at the time. “I call on everyone to challenge racism and inequality in every corner of our city and wherever we see it.”

48 year-old Rees, who grew up in the city, has since expanded on his approach to the issue in an interview with CityMetric, saying “wherever you stand on that spectrum, the city needs to be a home for all of those people with all of those perspectives, even if you disagree with them.”

“We need to have the ability to live with difference, and that is the ethnic difference, racial difference, gender difference, but also different political perspectives,” he added. “I have been making that point repeatedly – and I hope that by making it, it becomes real.” 


What making that point means, in practice, for Rees is perhaps best illustrated by his approach to city governance.

Weeks after the toppling of Colston’s statue, a new installation was erected at the same spot featuring Jen Reid, a protester of Black Lives Matter. However, the installation was removed, as “it was the work and decision of a London-based artist, and it was not requested and permission was not given for it to be installed”, Rees said in a statement.

Bristol may appear a prosperous city, logging the highest employment rate among the UK’s “core cities” in the second quarter of 2019. But it is still home to many areas that suffer from social and economic problems: over 70,000 people, about 15 percent of Bristol’s population, live in what are considered the top 10 percent most disadvantaged areas in England. 

In an attempt to combat this inequality, Rees has been involved in a number of projects. He has established Bristol Works, where more than 3,000 young people from economically disadvantaged backgrounds are given work experience opportunities. And is now setting up a commission on social mobility. “Launching a Bristol commission on social mobility is not only about social justice; it [should not be] possible for a modern city to leave millions of pounds worth of talent on the shelf, just because the talent was born into poverty,” he says.

The mayor is also a strong supporter of the UN’s Sustainable Development Goals (SDGs), explaining that SDGs offer a way to talk about sustainability within a framework of many issues, ranging from climate change and biodiversity to women’s issues, domestic violence, poverty and hunger.

“What we want to achieve as a city cannot be done as a city working alone,” he insists. “We don’t want to benefit only people inside Bristol, we want to benefit the planet, and the SDGs offer a framework for a global conversation,” suggesting that a vehicle should be launched that allows cities to work together, ideally with organisations such as the UN, the World Bank and the International Monetary Fund involved. 

Greater collaboration between cities would be “beneficial in terms of economies of scale,” he argues, “as cities could get more competitive prices when buying materials for building houses or ordering buses, rather than each city acquiring a few of them at a higher price.”

In an attempt to focus on the long term, Rees launched One City Plan in January 2019, setting out a number of goals for Bristol to achieve by 2050.

Investing in green infrastructure to meet 2030 carbon emission targets spelled out in the SDGs is a key area here, with the mayor noting that transport, mass transit and energy are important sectors looking for further investment and government funding: “The sooner we meet our targets, the sooner we will benefit from them, and invest in sectors that will provide people with jobs.”

Jobs, especially following the outbreak of Covid-19, are of paramount importance to Rees. Bristol’s council wants to ensure that any government money given to the city will be quickly passed on to businesses to help prevent redundancies, he says, though given that mass job losses seem inevitable, reskilling options are also being looked into, such as through a zero-carbon smart energy project called City Leap.

Another important area for investment in Bristol is affordable housing, with 9,000 homes already built under Rees’s term of office. “People could build a base for life with affordable housing, [and this would mean] their mental health would be better because they have a safe place,” he explains. “Children in families that have a home that is affordable are more likely to able to eat and to heat, [and they are more likely to enjoy a] better education.”

Taken in the round, Rees’s agenda for Bristol is its own blueprint for shaping history. The Colston statue now lies in safe storage, with a local museum likely to play host to the controversial monument. But the Black Lives Matters protestors were fighting for a fairer, more equal future, and it is here where Rees is determined to deliver.

Sofia Karadima is a senior editor at NS Media Group.