A business group believes the Mayor should have fundraising powers for the Bakerloo Line Extension and other transport projects in London.
London: A business group wants the Mayor to have new fundraising powers. This could help pay for the Bakerloo Line Extension and other transport projects. They believe this change could unlock billions for London’s Tube network.
BusinessLDN released a report suggesting the Mayor could borrow against future economic benefits. This would help fund projects like the Bakerloo line extension to Lewisham and the DLR extension to Thamesmead.
The Bakerloo line extension is expected to cost between £5.2 billion and £8.7 billion. If built, it would add new stations at Old Kent Road and Burgess Park.
The report highlights how transport improvements, like the Elizabeth line, have boosted local property values. It argues that the Government should let Transport for London borrow money for these projects, using future tax revenues to pay it back.
To do this, the Mayor would need the power to collect a share of local taxes, like Stamp Duty Land Tax. This funding method is known as ‘tax increment financing’ and has been used before for other projects.
According to the report, this approach could raise over £4.5 billion in 25 years for three major projects. It estimates up to £2.2 billion for the Bakerloo line extension and about £1.5 billion for the DLR extension.
John Dickie, the CEO of BusinessLDN, emphasized the importance of transport investment for growth. He believes this model could help get key projects moving and create jobs.
A TfL spokesperson welcomed the report, noting it shows potential funding opportunities for transport improvements. They believe these could support growth across London and the wider UK economy.
The Government has been asked for a comment on this proposal.
