BusinessForBakerloo has welcomed the UK Government’s plans to give London greater control over locally raised tax revenues, saying the measures could help unlock funding for the Bakerloo Line Upgrade and Extension (BLUE).
Announced in the Budget on 28 October, the fiscal devolution measures are intended to give regional leaders greater financial flexibility to invest in infrastructure and support economic growth. The Government specifically identified the Bakerloo Line Extension as a project that could benefit from the changes.
Under the proposals, mayors will receive a 20% share of locally retained business rates from April 2027, with a share of income tax receipts to follow from 2028. The Government also intends to enable local and regional government to retain 100% of business rates income before the end of the decade.
The Budget additionally confirms plans to legislate for the Mayor of London to establish a successor to the Elizabeth Line Business Rates Supplement, which is scheduled to end by 2041. The successor mechanism, alongside wider fiscal devolution measures, is intended to help the Greater London Authority finance future transport infrastructure projects, including the Bakerloo Line Extension and West London Orbital.
BusinessForBakerloo, a campaign representing businesses with interests in transport, property and infrastructure, said the announcement was an important step towards delivering the full Bakerloo Line Upgrade and Extension.
The campaign argues that allowing London to reinvest more of the revenue generated within the capital could provide a route to financing the project, which it says would increase transport capacity and support housing and employment growth.
According to BusinessForBakerloo, the full scheme could unlock up to 107,000 homes, support 150,000 jobs and generate an additional 1.5 billion GBP in gross value added (GVA) annually.
A BusinessForBakerloo spokesperson said:BusinessForBakerloo strongly welcomes the Chancellor of the Exchequer’s recognition of the Bakerloo Line Extension as the kind of major local infrastructure project that fiscal devolution should enable.
Allowing more of the money raised in London to be invested locally could provide a vital new route to delivering the Bakerloo Line Upgrade and Extension in full. The BLUE would improve journeys for millions of Londoners while unlocking up to 107,000 new homes, 150,000 jobs and an additional £1.5 billion in GVA each year.
Today’s announcement is an important step forward. We look forward to working with the Government, the Mayor of London, TfL and local leaders to turn this commitment into a clear, long-term funding package for the full upgrade and extension.
Notably, the Budget announcement does not constitute a confirmed funding commitment for the extension. The arrangements for fiscal devolution, including the future use of locally raised revenues, will need to be developed further.
The Bakerloo Line Extension would extend the Underground line beyond its current terminus at Elephant & Castle, improving connections to south-east London.
TfL’s plans envisage new stations at Burgess Park, Old Kent Road and New Cross Gate, before the line reaches Lewisham. The extension could subsequently continue to Hayes and Beckenham Junction by taking over an existing National Rail route.
The project is intended to increase public transport capacity and support development in areas of south-east London where improved transport connections could facilitate housing and economic growth. The extension was safeguarded for future delivery by the Secretary of State for Transport in 2021.
