The Crossrail project is facing a £150 million funding gap and may struggle to repay its loans due to the drop in passenger numbers on the London Underground, a report by Parliament’s Public Accounts Committee (PAC) is warning.
Crossrail’s £18.8 billion estimated cost is being funded by a mix of debt borrowed by TfL, developer contributions, and a mix of grants and loans from the Department for Transport. As costs rose above the original £15.9 billion estimate (later cut to £14.8 billion), the government agreed to provide loans worth nearly £2.9 billion to complete the project.
The government’s last funding agreement provided £825 million, but that was the bottom of the range of up to £1.1 billion of additional funding needed, and Crossrail has been under a lot of pressure to try and pull costs down to avoid needing an additional £150 million that they had asked for at the time.
The government has provided £2.9 billion of loans to Crossrail to complete the Crossrail programme These loans are made up of £750 million to TfL along with £1.3 billion to the GLA in December 2018 and an additional £825 million to GLA in December 2020.
The GLA loans are expected to be paid back via London’s Business Rate Supplement (BRS) and Mayoral Community Infrastructure Levy (MCIL) with the Commissioner telling us it could take up to 2043 for full repayment.34 The TfL loan is to be financed and repaid from TfL’s own revenues.
The long term problem identified by the PAC is that with TfL being heavily dependent on fares income, the decline in passenger numbers means that TfL’s ability to repay Crossrail loans will be constrained.
The Committee said that it, therefore, remains very uncertain where the shortfall in funding for Crossrail or the loan repayments will come from, and TfL must identify new revenue streams. This is on top of the existing requirements from the government to find £500 million a year in additional income as a condition of the pandemic funding deal.
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said “We are finally, thankfully seeing a clearer sense of ownership, responsibility, and determination to complete the Crossrail programme from those in charge but there remains a serious, £150 million funding gap to finish the programme. There must be a focus now on finding real solutions to this.”
“With fares down because of the ongoing impact of Covid we also need more clarity on the plans and timescale for repaying the significant government loans.”
The Elizabeth line is currently expected to open “as soon as possible in the first half of 2022”.