Ahead of the Spring Statement the London Property Alliance (LPA) has called for the Chancellor to adopt innovative funding models to prevent major transport infrastructure projects stalling and continue to drive growth in central London.
The LPA has highlighted that improvements to the capital’s transport infrastructure can serve as a catalyst for investment and job creation, with the opening of the Elizabeth line leading to 171 hotel openings, 2,666 new food and beverage outlets and 12 museums, all of which were vital to London’s economic recovery post-COVID.
With London’s Central Activities Zone (CAZ), which equates to roughly ‘travel zone 1’, contributing £315bn to the UK economy in 2024, 11% of the total national output, and supporting 2.2 million jobs.
Alexander Jan, Chief Economic Advisor, LPA, said: “Central London is the most economically productive area in the UK and therefore absolutely critical to the Chancellor’s growth mission.
“The opening of the Elizabeth line brought a huge economic boost but, with London’s population set to reach 10 million in the coming years and amid fierce competition for businesses and talent from Paris and New York, we cannot afford to stand still.
“Government must be bold in providing a clear timetable for the delivery of projects such as the Bakerloo line extension, the new terminus at Euston and Crossrail 2. With little fiscal headroom, the Chancellor must look at all funding options, including additional levies for those businesses in central London that will benefit from these ambitious projects. Now more than ever, we need a creative and collaborative approach between public and private sectors.”
The LPA is calling for innovative funding to ensure the much-needed Bakerloo line extension, Euston terminus and Crossrail 2 projects progress by exploring the introduction of additional development taxes, similar to the Mayoral Community Infrastructure Levy (MCIL) which contributed to the funding of the Elizabeth Line, considering business rates supplements within central London to create additional long-term funding streams and using farebox income to secure debt to unlock major projects.
