The government is putting pressure on Transport for London (TfL) to take on a £174m funding gap that remains on the Crossrail project.
Speaking to the Public Accounts Committee, Bernadette Kelly, the permanent secretary at the Department for Transport, said TfL would be “expected” to use its already depleted coffers to cover the funding gap for the long-overdue Elizabeth line, which is due to open next week.
Kelly said: “I’m very pleased to confirm that it [Crossrail] will open for all passengers on 24 May, so that is a fantastic milestone.”
She added: “Currently, my understanding is there’s still some £200m of the agreed loan still in play in the system. There is still, as you say, an estimated gap in the order of around £174m as of February. Obviously, that figure changes over time, but that is the size of the funding gap that I would expect.
“Our starting position from HMG [Her Majesty’s Government] is that we would expect to see London funding that gap, but this needs to be resolved in our capital negotiations.”
Crossrail bosses previously revealed that up to £1.1bn of additional funding was needed to complete the new London railway line, after COVID-19 restrictions delayed the project in 2020. This replaced the £400m to £650m cost overrun that was announced in November 2019, and was in addition to the £2.15bn original funding top-up that was agreed after Crossrail missed its 2018 opening date.
On 30 November 2020, a funding deal for £825m of the £1.1bn was reached, leaving a potential funding gap of £275m. The current shortfall is about £174m, according to the TfL’s latest estimates.
The additional money is needed to fully connect the Elizabeth line network. When it opens next week, it will effectively operate as three separate railways: one running from Reading and Heathrow through to Paddington; a second from Shenfield to Liverpool Street; and a third from Paddington to Abbey Wood.
Budget pressures and cost overruns have wreaked havoc on TfL’s finances since the onset of COVID-19. The latest figures show that passenger numbers are still lower than before the pandemic, indicating there is less fare revenue to fund the transport service.
In December 2021, TfL blamed the “stop-start” nature of funding agreements for a £158m underspend on capital expenditure projects in the current financial year. A report included in papers for TfL’s 8 December board meeting revealed capital expenditure for the year to date stood at £871m, 15 per cent lower than its previously revised budget for the year of £1.02bn.