Business group London First has called for “fundamental reform” of the way Transport for London is funded in the long term, including by devolving greater access to current taxes raised in London and creating new powers for the transport body to raise cash as part of what it calls “the right mix of local and national contributions”.
Published the day after the announcement that former New York transit chief Andy Byford will be TfL’s new commissioner, the group’s report on the funding issue, entitled Squaring the Circle, asks for “certainty” from national government about an “adequate funding regime”.
It concludes that the most likely arrangement is a combination of government grant and an enhanced range of local tax-raising mechanisms and argues that “recent events mean that the case for re-thinking how we fund London’s transport pipeline has, if anything, strengthened.”
The report, supported by accountants KPMG and drawing on discussions with businesses, Treasury officials and various public bodies, says that a “wide range of beneficiaries” from London’s transport networks should “contribute proportionately” based on “a robust understanding of how and when projects will generate financial gains, and for whom”.
The case is illustrated by an “equity map” drawn up as part of a review of how a future Crossrail 2 might be paid for. This envisages taxes being raised from home owners, other residents, businesses and developers who would be expected to benefit financially from the project being built, in terms of increased property values and trading profits.
Improved “land value capture” mechanisms are explored as a way of funding new transport projects, and the report recommends that “a mix of London-wide and locally-targeted mechanisms” should be applied uniformly rather than on a project-by-project basis, which is seen as inefficient.
There is also a call for a “more joined-up approach” between the Greater London Authority and the wider south-east of England, many of whose residents commute into London, making daily use of TfL transport networks. The report emphasises that it supports the principle of the government’s “levelling up” aspiration to see economic growth spread more evenly across the country and urges that a devolved approach to other city regions should be pursued, rather than penalising the capital.
“Other city regions have different devolution frameworks to London,” the report says. “The government will, quite rightly, want to devolve further decision-making powers to the regions of the UK in the upcoming [English Devolution] Bill, but this should not mean the capital’s need for more locally-held powers and further fiscal devolution should be ignored.”
Photograph from the Squaring the Circle report.
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