Recommendations & Conclusions
10 items
2
Recommendation
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
The collapse in passenger numbers owing to the pandemic, and subsequent bailout to TfL, has complicated how and when TfL and the Greater London Authority will be able to repay the taxpayer loans for Crossrail. To date, the taxpayer has provided nearly £2.9 billion in loans to TfL and the …
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The collapse in passenger numbers owing to the pandemic, and subsequent bailout to TfL, has complicated how and when TfL and the Greater London Authority will be able to repay the taxpayer loans for Crossrail. To date, the taxpayer has provided nearly £2.9 billion in loans to TfL and the Greater London Authority (GLA) to fund Crossrail Ltd’s costs on the programme: £750 million to TfL in December 2018; £1,300 million to the GLA in December 2018; and an additional £825 million to the GLA in December 2020. However, this funding may still not be enough, with Crossrail Ltd’s middle estimate cost of the programme in July 2021 (£15,940) coming in £150 million above its current available funding, thus potentially creating a shortfall. The Department expects the £750 million loan to TfL for Crossrail to be financed and repaid from TfL’s own revenues. This loan is separate from over £4 billion of loans from government to support TfL during COVID. Fare revenue is critical to TfL’s finances. Prior to the pandemic, TfL said it received 72% of its income from fares however passenger numbers were plateauing before the pandemic, and have since collapsed. There may be long-term changes to travel patterns, with TfL estimating an 18% drop in demand for rail by 2031 compared with what was expected before the pandemic. Government lending to TfL during the pandemic includes a target to become financially self-sufficient within two years, meaning TfL must identify new revenue streams. The GLA loans are expected to be paid back via London’s Business Rate Supplement (BRS) and Mayoral Community Infrastructure Levy (MCIL), with the Commissioner telling us it could take up to 2043 for full repayment. 6 Crossrail: A progress update Recommendation: The Department and TfL should write to the Committee by the end of November setting out TfL’s revenue forecast scenarios, and what they mean for whether the loans for Crossrail will be fully repaid and when.
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Government response AI summary
The government agrees with the committee's general conclusion but does not commit to providing TfL’s revenue forecast scenarios or their implications for Crossrail loan repayment by the requested deadline. Instead, it describes its general value for money assessment processes and commitments for future letters.
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HM Treasury
3
Recommendation
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
It is not clear to passengers and businesses when the Elizabeth line will open or what services will be available. The Elizabeth line services will open in stages. Services have been running on the eastern and western ends of the line (under the brand name ‘TfL Rail’) since June 2017 …
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It is not clear to passengers and businesses when the Elizabeth line will open or what services will be available. The Elizabeth line services will open in stages. Services have been running on the eastern and western ends of the line (under the brand name ‘TfL Rail’) since June 2017 and May 2018, respectively. Opening of the central section, known as stage 3, is expected in the first half of 2022. It will operate a shuttle service between Abbey Wood and Paddington. Commuters must change to other Elizabeth line services to continue their journeys on the eastern and western ends. Full east-west services, without an interchange, are not expected until December 2022 or May 2023 as these need to be aligned with National Rail timetable changes which occur in May and December each year. However increased services, such as from the eastern ends through the central section and terminating at Paddington, may open by September 2022. Crossrail Ltd has not yet publicly announced an exact opening date. However, with the opening of central section potentially as soon as February 2022, and the staged opening of different routes, commuters and businesses will need increased certainty to better plan for Crossrail opening. Recommendation: Crossrail Ltd, TfL and the Department should develop a clear communication strategy to the public to explain when and what Elizabeth line services will be open.
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Government response AI summary
The government's response discusses managing supplier performance, financial and programme risk, and contract mechanisms, which does not address the recommendation for a clear public communication strategy regarding Elizabeth Line service openings.
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HM Treasury
4
Recommendation
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
We are concerned that TfL and the Department do not have a plan to maximise the long-term, wider economic benefits of Crossrail. When open, the Elizabeth line should increase capacity in central London by around 10%, reduce journey times, improve connectivity and be a fully accessible railway. TfL expects the …
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We are concerned that TfL and the Department do not have a plan to maximise the long-term, wider economic benefits of Crossrail. When open, the Elizabeth line should increase capacity in central London by around 10%, reduce journey times, improve connectivity and be a fully accessible railway. TfL expects the Elizabeth line to contribute towards its net zero objectives by getting cars off the road. Since 2010, the Department and TfL have referred to Crossrail resulting in £42 billion of benefits to the economy. Crossrail has delivered some benefits during the build phase, such as apprenticeships, and the Department and TfL have commissioned work to examine how the programme has affected property and regeneration along the route, and on establishing a baseline to measure some benefits. The Elizabeth line could be open to passengers in as early as February 2022, some seven months from the date of our evidence session. Achieving economic growth and regeneration requires sustained effort and vision—in this case, effort and vision shared by local authorities and boroughs, and businesses. It is surprising therefore, particularly considering how travel patterns were already changing before the pandemic, that that there is still no strategy or plan for how to achieve the wider benefits of the Elizabeth line. Recommendation: TfL and the Department should publish a detailed plan before the central section opens for setting out how they intend to maximise the long- term, wider economic benefits of Crossrail, including: • What the benefits are; • Who is responsible for delivering them; Crossrail: A progress update 7 • The levers or support that TfL and the Department require to deliver these benefits; and • How these benefits will be monitored and reported over time.
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Government response AI summary
The government's response discusses the Ministry of Defence's track record on delivering savings and improving programme delivery, failing entirely to address the recommendation for TfL and the Department to publish a plan for maximising Crossrail's long-term economic benefits.
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HM Treasury
1
Conclusion
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Transport (the Department), Transport for London (TfL) and Crossrail Ltd on progress with the Crossrail programme.1
Government response AI summary
The government response serves as an introduction to its overall response, providing background on the Crossrail project and the committee's report, rather than directly addressing the conclusion which merely states the committee took evidence.
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HM Treasury
6
Conclusion
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
A significant software update is needed to begin Trial Operations, which will allow up to 24 trains an hour to run through the central section.10 Any unexpected issues with software may take time to fix and we have reported on previous challenges with software in our Completing Crossrail report.11 The …
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A significant software update is needed to begin Trial Operations, which will allow up to 24 trains an hour to run through the central section.10 Any unexpected issues with software may take time to fix and we have reported on previous challenges with software in our Completing Crossrail report.11 The update was expected in Summer 2021 but has been delayed by up to 8 weeks.12 The earliest Trial Operations can start is November 2021.13
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Government response AI summary
The government response states agreement with the conclusion but then discusses defense spending and equipment plans, which does not address the conclusion regarding Crossrail software updates and trial operations.
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HM Treasury
8
Conclusion
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
The estimated cost of Crossrail has increased by £1.9 billion since we last reported and now stands at £18.9 billion.18 This excludes the £1.1 billion cost of the new trains and the depot at Old Oak Common which have historically been reported separately.19 The estimated cost has increased because the …
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The estimated cost of Crossrail has increased by £1.9 billion since we last reported and now stands at £18.9 billion.18 This excludes the £1.1 billion cost of the new trains and the depot at Old Oak Common which have historically been reported separately.19 The estimated cost has increased because the programme was further from being complete than anyone understood when the revised cost and schedule was set in April 2019.20 Figure 1 – Cost increases in the Crossrail programme (excluding trains and depot)21 Estimated cost at Estimated cost at Cost increase April 2019 May 2021 Crossrail Ltd costs £14.4 billion £15.9 billion £1,510 million Network Rail costs £2.6 billion £3.0 billion £390 million Total programme costs £17 billion £18.9 billion £1.9 billion Source: National Audit Office
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Government response AI summary
The government's response lists unrelated reports on Greensill Capital and completely fails to address the committee's conclusion regarding Crossrail's cost increases.
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HM Treasury
10
Recommendation
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
At May 2021, Crossrail Ltd estimated that its cost to complete the programme would be between £15,820 million and £16,008 million, with a middle value of £15,910 million. This was between £30 million and £218 million above the current funding of £15,790 million. The middle estimate was £15,910 million which …
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At May 2021, Crossrail Ltd estimated that its cost to complete the programme would be between £15,820 million and £16,008 million, with a middle value of £15,910 million. This was between £30 million and £218 million above the current funding of £15,790 million. The middle estimate was £15,910 million which was £120 million more than funding.25 In July 2021, Crossrail Ltd reported that costs had increased and were now £150 million above funding. Crossrail Ltd told us that this latest increase was to top up a “management reserve” which could be used for any “unknown unknowns” in the programme and that one of the lessons learned from the past was that the Crossrail programme had not previously had such a reserve.26 TfL and Crossrail Ltd told us that much of the difference between estimated cost and current funding was to mitigate prolongation risk and the inclusion of a management reserve for any unexpected costs. Crossrail Ltd must end the expensive Tier 1 contracts as soon as possible to control costs.27 The programme spent approximately £56 million a month between October 2020 and March 2021, so any delay to the programme remains a significant risk to the eventual cost of the Elizabeth line.28
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Government response AI summary
The government's response provides an update on Crossrail's overall funding status, but it does not address the specific recommendation for Crossrail Ltd to end expensive Tier 1 contracts to control costs.
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HM Treasury
13
Conclusion
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
TfL told us that it is over-reliant on income through the farebox which accounts for 72% of TfL income. TfL compared this to New York City Transit which received 38% of its income from fares.37 It told us that COVID had caused revenues to collapse because ridership had collapsed. At …
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TfL told us that it is over-reliant on income through the farebox which accounts for 72% of TfL income. TfL compared this to New York City Transit which received 38% of its income from fares.37 It told us that COVID had caused revenues to collapse because ridership had collapsed. At the start of 2021, TfL’s long-term demand planning indicated an 18% drop in demand for rail as of 2031 in the most likely scenario, compared with what was expected before the COVID pandemic.38 TfL told us that the government lending it had received during the pandemic included a target to become financially self-sufficient within two years.39 TfL told us it must diversify its income and identify new revenue streams of around £500 million a year.40 Opening the Elizabeth line
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Government response AI summary
The government's response discusses updated Elizabeth line passenger forecasts and the impact of the COVID-19 pandemic on ridership, but does not address the committee's conclusion about TfL's over-reliance on farebox income or the need to diversify revenue streams.
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HM Treasury
18
Conclusion
Twenty-Fourth - Crossrail: A progress u…
Not Addressed
The Department and TfL told us that, when the Elizabeth line opens, they expect it to increase rail capacity in central London by around 10%, reduce journey times, and be fully accessible.50 These were the transport benefits set out in the last published business case in 2011.51 TfL explained that …
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The Department and TfL told us that, when the Elizabeth line opens, they expect it to increase rail capacity in central London by around 10%, reduce journey times, and be fully accessible.50 These were the transport benefits set out in the last published business case in 2011.51 TfL explained that the extra capacity would be useful as we emerge from the pandemic as the large stations and spacious trains would enable social distancing. Journey times to key destinations would significantly reduce, for example, the journey time from London Heathrow Airport to the City of London would reduce from 55 to 34 minutes. The line would bring 1.5 million more people within a 45-minute commute of existing major employment centres. All stations are fully accessible for passengers. Crossrail Ltd told us that there is “£42 billion of agglomerated business and personal benefit” to come from the Elizabeth line.52 TfL also told us that the Elizabeth line would contribute towards its plans to be net zero by getting cars off the road.53
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Government response AI summary
The government's response details its communications strategy regarding the Elizabeth line's opening dates and phases, but does not address the committee's observations about the expected transport and economic benefits.
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HM Treasury
19
Conclusion
Twenty-Fourth - Crossrail: A progress u…
The Department and Crossrail Ltd told us about the benefits Crossrail has achieved during construction. Crossrail Ltd told us that Crossrail had “overreached” on its apprenticeship targets, achieving 1,000 apprenticeships. Many of the 1,000 were in civil engineering in the Tier 1 contractors, and Crossrail Ltd does not know where …
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The Department and Crossrail Ltd told us about the benefits Crossrail has achieved during construction. Crossrail Ltd told us that Crossrail had “overreached” on its apprenticeship targets, achieving 1,000 apprenticeships. Many of the 1,000 were in civil engineering in the Tier 1 contractors, and Crossrail Ltd does not know where they work now. There are a further 100 to 200 apprenticeships on the Elizabeth line at the moment. The tunnelling academy is now a training centre for TfL.54
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HM Treasury