There’s no questioning that Transport for London (TfL) is a global leader in its field. Not only has it bounced back from the pandemic to once again support millions of travellers daily and deliver an operating surplus, it continues to expand, of late through the Elizabeth Line and a Grimshaw-designed extension to the Northern line.
When we sat down with BusinessLDN and Deputy Mayor for Transport Seb Dance last month, he set out his stall as an ambitious advocate for public transport as the mayor’s most effective lever to support sustainable growth and a fairer, greener city.
It’s against this backdrop that TfL is driving a substantial modal shift for Londoners, aiming to increase the proportion of journeys made using public transport and active means from 60% to 80% by 2041. Seb identified two primary challenges to this ambition: the expense of maintaining and upgrading the world’s oldest metro system, and the need for a long-term and reliable TfL funding settlement from central government.
Where the latter is concerned, TfL does of course have access to its own revenue creation assets outside of ticket sales and central government funding. It is the largest landowner in London, after the Duke of Westminster, and its property arm, Places for London (PfL), plans to utilise assets to grow revenue for reinvestment in transport infrastructure over the long-term. In addition, PfL aims to deliver 20,000 new homes and 3 million square foot of workspaces by 2033, with a view to unlocking over £2 billion in new revenue.
The PfL estate is broad and diverse in nature, encompassing everything from refurbished viaducts, to oversite developments (OSD) above transport hubs, to car parks, to large-scale masterplans. As such, maximising its potential will demand a varied approach to delivery methods and Land Value Capture (LVC), whereby stakeholders receive a fair share of site value increases resulting from their investments.
Our work on the Northern line extension demonstrates how transport can be used to support new jobs and homes, directly linked to new infrastructure funding. However, many OSD projects still struggle for viability because of expense and complexity – the Northern line model is not easily replicable on smaller sites.
The Mayoral Community Infrastructure Levy has had some success in generating revenues to help fund Crossrail but normally the public sector only captures a small portion of the total land value uplift from transport projects.
TfL will need a more effective mechanism for longer-term LVC for strategic projects, such as the Bakerloo line and DLR extensions, to justify viability to the Treasury, particularly with the largest proportional value uplift likely to occur outside the already well-served inner boroughs. It is positive that new LVC mechanisms, like Development Rights Auctions, are being considered by TfL and it is likely we will see these utilised on larger projects in the future.
PfL is also showing vision in its packaging of development sites which balance complexity and reward, and teaming up with private sector developers to unlock value on sites that either the public or private sector would struggle to deliver on their own. PfL’s commercial Platinum Portfolio, led by a joint venture between PfL and Helical, with us leading on the design of Paddington Triangle Site OSD, is a good example. PfL retain shared ownership in the development, ensuring long-term revenue for TfL, whilst also leveraging their ability to deal with complex transport stakeholder networks to improve development viability.
Our work on the La Défense station for the Grand Paris Express, as well as the Dublin Metro, demonstrates how other countries are learning lessons from TfL in leveraging private revenue into transport projects. London also has much to learn from other international models too, such as the Martin Place Metro station in Sydney – designed by us, funded by Macquarie Group and delivered by Lendlease alongside Sydney Metro.
TfL and PfL are clearly seeking positive and creative ways to deal with funding challenges. As Seb reminded us in his briefing, the London transport network is one of the best in the world, so we must go on learning lessons to ensure our infrastructure serves the needs of all Londoners for an even better city.