Land auctions model 'not enough to fund major London transport schemes'

A key model of levering cash for infrastructure will not generate enough money for major transport schemes in the capital, London's deputy mayor has said.

Major infrastructure: DRAM being trialled in London
Major infrastructure: DRAM being trialled in London

Jules Pipe, the capital’s deputy mayor for planning, regeneration and skills, told an event at the Mipim UK property festival that the development rights auction model (DRAM) - currently being trialled by mayoral agency Transport for London - would fail to produce sufficient cash for major projects like the Bakerloo Line extension.

"I don't think the DRAM model generates enough money for the type of projects we want funded," Pipe said.

"What we do need is increased devolution of property and other taxes in London."

"If the government has decided that they are getting out of the game of delivering infrastructure and leaving it to land value capture from developments, that is not going to be producing enough money and it is the wrong way around regarding timing," he said.

"Schemes will be built out before they build the infrastructure."

"But if you have devolution of the funding streams then [we] could make our own decisions in the capital."

Michele Dix, managing director of Crossrail 2, said one of the biggest issues for transport infrastructure was "where is the money coming from".

"We've got to find that money, as we have to have half the money up front, which is a big, big ask," she said.

Dix said that the Community Infrastructure Levy (CIL) had worked well in London as a funding mechanism, but added that Crossrail 2 would be doing further work on how to capture value from a wide range of beneficiaries of the project, as well as assessing the potential of DRAM.

Work would look at whether the model "could generate more income than some of the existing mechanisms in place and whether it will be a fair mechanism", she said. 

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