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Mayor consults on proposals to use planning system to help fund Crossrail

By GLA Press Office

Mayor of London Boris Johnson today announced a consultation on draft proposals to alter the London Plan in order to enable contributions to be made by developers through the planning system towards the costs of delivering the Crossrail project.

This comes on the same day as the publication of the Crossrail core agreements, which underpin the funding, governance and delivery of the project, and the publication of the Business Rates Supplements Bill.

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 use of planning obligations (Section 106 agreements) and would consider, once the regulations are implemented, the proposed Community Infrastructure Levy. Today's initial consultation with the London Assembly and the GLA Group Functional bodies includes proposed alterations to the London Plan to bring in new policies to use planning obligations, which would seek a financial contribution from office developments in the Central Activities Zone (CAZ) and northern Isle of Dogs, as well as draft Supplementary Planning Guidance setting out details of the proposed charges.

The Section 106 agreements will only be applied on new applications for additional office space above a 5,000 square foot threshold in the Central Activity Zone and the northern Isle of Dogs. These large-scale office developments will directly benefit from new high-frequency and high capacity Crossrail services and Crossrail represents a long term investment for business.

The Mayor said:
"Crossrail is vital to London's continued competitiveness. I am committed to doing all I can to ensure it is delivered on time and on budget and these proposals are an important part of the funding package needed to ensure that this important project is finally delivered.

"I recognise we are going through difficult economic times, but once we are through them the arrival of Crossrail will bring huge benefits to those businesses who have contributed."

It is proposed the Section 106 agreements will be in place for the life of the current London Plan (until 2026) and reviewed when the sum is raised.

Notes to Editors

Crossrail is the largest addition to the transport network in London and the South East for 50 years. The new line will run 118km from Maidenhead and Heathrow in the west through new tunnels under central London to Shenfield and Abbey Wood in the east. New stations will be created at Paddington, Bond Street, Tottenham Court Road, Farringdon, Liverpool Street, Whitechapel and the Isle of Dogs (Canary Wharf).

Early construction works for Crossrail will commence in 2009 with main construction beginning in 2010. Crossrail is scheduled to open for service in 2017. For more information about Crossrail visit www.crossrail.co.uk.

London Plan alteration: use of planning obligations in funding Crossrail

Once the Assembly and functional bodies have been consulted on the London Plan alteration, there will be a further period of public consultation and then an examination in public. It is likely that the alteration will be formally published by the spring of 2010.

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

The Section 106 contributions 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 business rate supplement.