Crossrail – Jobs, Housing and Funding Bridget Rosewell: Consultant Chief Economist GLA Economics

Where it goes

Why build a railway?  To make money –Fares, development  To enable time savings –Shorter trips, valuable time  To generate more activity –Jobs and housing

Why build Crossrail?  Generates fare revenues –But could cannibalise other lines  Enables time savings –The standard way of evaluating transport benefits  Generates activity –The main plank of the case

What does Crossrail do?  Relieves a capacity constraint in the central area  Without it employment trends will not be fulfilled  Such employment adds value to the UK as a whole  Opens up new residential areas to higher incomes  Creates opportunities for additional growth in such communities

What have we done to support this?  Won the argument that agglomeration matters  Analysed the likely extent of crowding off  Valued the jobs that would be crowded off if Crossrail didn’t happen  Focused on the GDP return to investment and the payback

Agglomeration and CBDs  Agglomeration drives city economies and CBDs  This is due to: –Large input markets –Knowledge Spillovers –Access to Markets (competition)  Means that Central London is more productive

Where it will have an effect  Can show where crowding is likely to be worse  This is based on higher level trends and more detailed site analysis  Things will still change as developers come forward and new opportunities emerge  Effects likely to spread out as advantage taken of congestion relief

Change in Employment – 2016

Building Benefits

Wider Economic Benefits: Summary Additional central London jobs:  Low scenario: 26k by 2026, constant thereafter  Med Scenario: 26k by 2026, 40k by 2036  High Scenario: 40k by 2026, 70k by 2036

More impacts…  Opens up housing potential, especially in Thames Gateway  Raises incomes in these areas and scope for local job creation  None of these quantified for the business case, though included in qualitative assessment  Note that population/housing effects are not part of current appraisal methodologies

Estimating the development capacity of the LTG  Looked at future travel from each opportunity area to determine impact of available transport capacity.  Available transport capacity based on a maximum crowding level of 4 people standing per square metre for the Underground and DLR and 3 people standing per square metre on National Rail.  Development incorporated assumptions on household size, trip rates, mode split targets.  Comparisons made with the LDA’s sites database which gives planning aspirations to 2016.

Impact of Crossrail Funded network without Crossrail 6,700 4,600 4, ,200 2,100 4,900 7,400 32,100 23,900 housing units already delivered ( ) 76,300 additional housing units in LDA forecast to meet the 100,000 target ( ) 95,200 units could be supported with the funded network if planned growth is redistributed 69,100 units can be supported with the funded network given planned growth locations

4,900 4,100 23,900 housing units already delivered ( ) 76,300 additional housing units in LDA forecast to meet the 100,000 target ( ) At least 130,000 additional housing units could be supported by funded transport schemes if development located to maximise transport capacity ( ) and if this was the only constraint it would bring the total from 2001 base to at least 154,000

Regeneration Benefits - further work  How will Crossrail support regeneration in eg. Thames Gateway?  Access to jobs? Housing? Spending?  Central London earnings will be higher- how will this benefit residential areas and local jobs?  Where will new and re-locating workers move to?  How does skill level influence commuting pattern and will Crossrail affect this?

Funding  Cannot be privately funded because no revenue control  Railways are subsidised so no commitment to cover costs  Benefits accrue via users but not necessarily to users  Government, employers, property owners benefit too  Doubt our ability ever to disentangle this ex ante

Funding (2)  The result is a negotiation, with an outcome of some central, some local funding and a new rate surcharge  Note that the additional revenue which is likely to go to central government would probably cover costs on its own  Financing is a different matter again….