Crossrail – Jobs,
Housing and Funding
Bridget Rosewell: Consultant Chief
Economist
GLA Economics
Where it goes
Why build a railway?
 To make money
– Fares, development
 To enable time savings
– Shorter trips, valuable time
 To generate more activity
– Jobs and housing
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
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
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 didn’t happen
 Focused on the GDP return to investment
and the payback
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
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
Change in Employment – 2016
Building Benefits
Wider Economic Benefits:
Summary
Benefits
Conventional User Benefits
High Scenario
Welfare
GDP
(£bn)
(£bn)
12.8
4.8
Mid Scenario
Welfare
GDP
(£bn)
(£bn)
12.8
4.8
Low Scenario
Welfare
GDP
(£bn)
(£bn)
12.8
4.8
Labour force participation
0.9
0.9
0.9
Move to more productive jobs
46.2
29.9
19.6
Pure agglomeration
9.3
14.3
8.2
12.6
Tax Implications
19.2
Wider Economic Benefits
29.0
61.9
22.4
43.9
17.1
31.4
Total (User and WEBs)
41.9
66.7
35.3
48.7
29.9
36.2
13.7
6.8
10.4
9.9
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
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
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 LDA’s sites
database which gives planning aspirations to
2016.
Funded network without Crossrail
Impact of Crossrail
32,100
4,900
12,200
2,100
4,600
7,400
4,10
0
23,900 housing units already delivered (2001-2007)
76,300 additional housing units in LDA forecast to
meet the 100,000 target (2007-2016)
6,700
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
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
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?
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
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….