Press releases

Mayor listens and acts on reaction to Crossrail planning charge proposals

18.05.2009

The Mayor of London, Boris Johnson, has today published revised proposals for alterations to the London Plan to help fund Crossrail. The alterations were first announced last December so that new office developments, in central London and in the northern part of the Isle of Dogs could be required, through the planning system, to make a financial contribution towards the cost of Crossrail.

Since December the London Assembly, the Greater London Authority Group, and developers and local authorities have been consulted on both the alterations and new planning guidance. As a result of developers' concerns over the impact of the charge on the viability of new developments, particularly in the current economic climate, today's revised proposals now include viability as a planning policy test for the purpose of negotiating financial contributions.

The Mayor is also seeking views on whether it would be appropriate to have a lower rate of contribution during the first years of the charging scheme, and whether the boundaries of the charge area in central London should be adjusted to reduce impacts on places where investment margins on new developments are tighter.

Further guidance is included on where it may be appropriate for the charge to be levied on developments along the Crossrail route outside central London. Respondents had questioned the fairness of the charge only being applied in London. As a consequence the Mayor has written to the Secretary of State for Transport asking him to approach the planning bodies in the South East and the East of England with a view to their seeking contributions, where appropriate, from developments around Crossrail stations beyond the London boundary.

Statutory changes to London Plan for Crossrail funding should be complete by mid 2010. To date the Mayor has been accepting Crossrail contributions of around 20 per cent of the eventual charge that will be applied to individual developments. In the run up to formally changing the London Plan, the Mayor would like to see contributions agreed at a higher rate.

The Mayor said:

"Crossrail is vital for the future of the capital. It will transform our transport network and ensure London emerges strongly from the current economic downturn.

"I have listened carefully to the views and concerns of developers over contributions to this crucial venture and I am committed to taking a wholly pragmatic approach in future negotiations and will consider every case individually.

"It is important that we now move forward and ensure that those new developments which benefit most from Crossrail can contribute their fare share."

Notes to editors

1. When the funding arrangements for Crossrail were announced in October 2007 it was agreed that the Government, the former Mayor and London businesses would each contribute approximately one third of the expected cost. Businesses have been among the most prominent supporters of Crossrail given the long-term benefits to the economy that it will bring, and the business contribution has been a long-established component of the funding package. The Mayor has indicated he would secure contributions from developers, both through the use of planning obligations (Section 106 agreements) and, once it is implemented, the proposed Community Infrastructure Levy. The London Plan is therefore being altered to seek a financial contribution from office developments in the Central Activities Zone (CAZ) and northern Isle of Dogs. Supplementary Planning Guidance, setting out details of the proposed charges, will also be published.

2. The Section 106 agreements will only be applied on new applications for additional office space above a 5,000 square foot threshold and will provide £300m for Crossrail. Other funding includes Department for Transport grant, Transport for London borrowing against income from future Crossrail fare payers, and the Mayor using the powers to introduce a supplementary business rate on businesses.

3. Crossrail is the largest addition to the transport network in London and the South East for 50 years and is scheduled to open for service in 2017. Construction began at Canary Wharf on Friday 15 May 2009. For more information visit www.crossrail.co.uk.

4. Following public consultation there will be n an examination in public, expected December 2009. It is likely that the alteration will be formally published by mid 2010.

5. The Central Activity Zone (CAZ) covers Westminster, parts of Camden, Islington, Hackney, Tower Hamlets, City, Lambeth, Kensington and Chelsea and Wandsworth.

6. To download the alterations to the London Plan and Supplementary Planning guidance visit:

http://www.london.gov.uk/mayor/planning/crossrail/index.jsp

For media enquiries for the Mayor please call Richard Brookes or Helen Collier in the Mayor's Press Office on 020 7983 6550/4020.

PUBLIC/NON-MEDIA ENQUIRIES: Call the Public Liaison Unit at the Greater London Authority on 020 7983 4100

DUTY PRESS OFFICER: For out-of-hours media enquiries, please call 020 7983 4000

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