Bromley (Parliament Politics Magazine) – A Labour think tank report suggests taxing tourists and building homes on Bromley’s green spaces to help fund the Bakerloo line extension.
According to the research, “wealthy” London should be provided with the means to fund its own infrastructure, such as the extension of the Bakerloo line to Hayes, including the ability to raise taxes in a manner akin to that which Paris uses to fund transportation projects.
The Paris city region can charge visitors up to €15 per night to fund infrastructure, and it receives €7 billion annually from a 3% transport levy on local incomes that is set aside for transportation expenditures.
The authority to establish development organizations that may purchase property at a discount for future construction would also be granted, as would greater latitude to increase council taxes, so long as the money is used directly for infrastructure investment.
Sadiq Khan should utilize a Mayoral Development Corporation to compel Bromley Council, which is located at the end of the proposed expansion, to construct more homes on the borough’s green space, according to the paper, which was created by Labour Together and the YIMBY Alliance.
“Bromley is the least dense London borough because it is over 50% greenbelt, with only 13% as many residents per km² as Tower Hamlets. The borough’s golf courses alone could hold more than 10k new homes,”
said the authors.
According to their estimates, London could produce £2 billion in value to help finance the project for every 10,000 dwellings constructed along the planned route.
But according to the study, this would result in a “bruising political fight with Bromley.” If it were possible to simply have the Treasury write a check, any mayor would avoid it.
In exchange for the new powers, the Mayor would no longer be able to appeal to the Treasury for funds.
“It is ridiculous that London, one of the richest economies in the world, has to come to the government with a begging bowl to fund the infrastructure it needs,” the report’s authors say.
According to the most recent estimate from 2021, the cost of extending the Bakerloo Line to New Cross and Lewisham via the Old Kent Road has skyrocketed from £2–3 billion in 2010 to between £5 and £8 billion. Although it was initially mentioned in the Mayor’s Transport Strategy in 2010, it has subsequently been put on the back burner on several occasions.
London has provided funding for a portion of the project, but it won’t begin until it receives billions of pounds from the Treasury. Transport for London is reportedly several billions of pounds short of funding the project, even though London has offered to cover a large portion of the cost through fees on companies and housing developers along the proposed line.
According to the report, the Mayor of London ought to have the authority to raise the money on his own rather than requesting it from the Treasury in this and similar situations.
The project seems to be getting closer despite the funding setback. The Transport Secretary formally protected the site from any future development earlier this year, and the Mayor just completed consultation on a new express bus to map the extension’s route.
The Elizabeth Line, which only received £5 billion from the Treasury out of the project’s £19 billion overall cost, was cited in the study as an illustration of how infrastructure should be funded.
Business leaders suggested earlier this year that the Mayor should be permitted to raise funds for projects such as the Bakerloo line extension or the Docklands Light Railway (DLR) extension to Thamesmead, essentially by “borrowing against” the schemes’ future economic benefits. The authors’ recommendations support those ideas.
Technically speaking, this argument is called “land value capture” and entails borrowing funds that the government will subsequently recover through windfall taxes on the land’s increased worth.
The Northern line extension to Battersea Power Station was partially financed by a version of it that was geared towards corporate rates.
“Richer areas like London should have the powers and incentives to fund their own infrastructure, freeing up central government funding for the parts of the country that can’t yet stand on their own two feet,” the report’s authors state.
“That means beefing up their tools to get more money out of landowners who make windfall gains in land values as a result of development, and from businesses who will see bumper footfall and profits.
But with more power comes more responsibility. In return for those tools, London must use them to pay for its own infrastructure. It can’t be made to bring its begging bowl to Whitehall. London could fund the Bakerloo line extension, for example, if the Mayor fought the boroughs along the line to build much more housing.”
A spokesperson for the Mayor told the Local Democracy Reporting Service:
“The Mayor welcomes the new era granted to London through the latest Devolution Bill, which means we can move forward with innovative new policies to boost economic growth and raise living standards in the capital as well as across the country.
More devolution would allow us to unleash London’s economy further, and compared to other global cities we remain a heavily centralised country, with too much power still in the corridors of Whitehall.
The Mayor will continue working closely with the Government to deliver more devolution for the capital as we build a fairer, safer, more prosperous London for everyone.”
The Treasury was contacted for comment.
What legal powers let a Mayoral Development Corporation force housing on Bromley?
MDCs can be designated as the local planning authority for their area (or parts of it), enabling them to prepare local plans, make decisions on planning applications, and control development processes independently of the borough council.
MDCs can acquire land compulsorily within their development area, subject to Secretary of State authorization and Mayor of London consent, enabling them to secure land needed for housing development even against current owners’ wishes.
MDCs have the power to acquire land and rights over land, manage property, and dispose of land for development purposes, including granting leases and planning permissions aligned with housing delivery objectives.