Crossrail

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Crossrail Jobs, Housing and Funding

• Bridget Rosewell Consultant Chief Economist
• GLA Economics

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Where it goes
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Why build a railway?

• To make money
• Fares, development
• To enable time savings
• Shorter trips, valuable time
• To generate more activity
• Jobs and housing

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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

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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

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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 didnt happen
• Focused on the GDP return to investment and the
  payback

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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

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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

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Change in Employment 2016
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Building Benefits
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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

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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

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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 LDAs sites database
  which gives planning aspirations to 2016.

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Impact of Crossrail
Funded network without Crossrail
32,100
4,900
12,200
2,100
4,600
4,100
7,400
23,900 housing units already delivered
(2001-2007) 76,300 additional housing units in
LDA forecast to meet the 100,000 target
(2007-2016) 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
6,700
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4,900
4,100
23,900 housing units already delivered
(2001-2007) 76,300 additional housing units in
LDA forecast to meet the 100,000 target
(2007-2016) At least 130,000 additional housing
units could be supported by funded transport
schemes if development located to maximise
transport capacity (2007-2016) and if this was
the only constraint it would bring the total from
2001 base to at least 154,000
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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?

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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

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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.