Twenty-Fourth - Crossrail: A progress update

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 … Read more 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. Show less

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 … Read more 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. Show less

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 … Read more 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. Show less

The Department has still not demonstrated that it is embedding lessons learned into its major programmes. This Committee has examined many major transport programmes, such as HS2, Great Western route modernisation and Thameslink, many of which have had significant problems … Read more The Department has still not demonstrated that it is embedding lessons learned into its major programmes. This Committee has examined many major transport programmes, such as HS2, Great Western route modernisation and Thameslink, many of which have had significant problems in their delivery. We have told the Department many times that it needs to learn lessons, from Crossrail and from other major transport projects, so that it does not repeat the same mistakes. In our evidence session, the Department told us again about the report it produced with the Infrastructure and Projects Authority, the innovative approach to delivering railway systems in HS2, and its project delivery improvement plan. While these are welcome developments, with the exception of the approach to delivering railway systems on HS2, the Department has not explained to us in practical terms what it is doing differently, nor the real-world impact its changes have had on delivering major programmes. Recommendation: The Department should write to the Committee by the end of November detailing what it has changed in its approach to delivering major programmes with its arms-length bodies, giving examples of tangible improvements or impacts on specific projects where possible. 8 Crossrail: A progress update 1 Schedule risks, cost and funding Show less

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

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 … Read more 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 Show less

Crossrail Ltd is constructing stations along the central section which are then handed over to the eventual infrastructure maintainer - Rail for London Infrastructure (RfLi) or London Underground. TfL told us that completing the stations is on the critical path … Read more Crossrail Ltd is constructing stations along the central section which are then handed over to the eventual infrastructure maintainer - Rail for London Infrastructure (RfLi) or London Underground. TfL told us that completing the stations is on the critical path to opening the central section to passengers.14 Crossrail Ltd told us that five of the nine central section stations have now been handed over, and that Paddington and Whitechapel would be handed over in the summer.15 Crossrail Ltd told us that Canary Wharf and Bond Street will be the final stations to be handed over.16 The NAO reported that Crossrail Ltd expects all stations, except Bond Street, to be handed over before Trial Operations begins. Bond Street will instead be completed to a safety standard that will allow Trial Operations to start. The NAO report also highlighted a risk that Bond Street may not be ready for the start of passenger services.17 Show less

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 … Read more 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 Show less

The £1.9 billion estimated cost increase consisted of £1,510 million of Crossrail Ltd costs, and £390 million of Network Rail costs. Schedule delay was the largest category of cost increase of Crossrail Ltd costs, accounting for £934 million. This was … Read more The £1.9 billion estimated cost increase consisted of £1,510 million of Crossrail Ltd costs, and £390 million of Network Rail costs. Schedule delay was the largest category of cost increase of Crossrail Ltd costs, accounting for £934 million. This was followed by £228 million of COVID-19-related costs.22 However, Crossrail Ltd told us that COVID-19 10 C&AG’s Report, para 3.17 11 C&AG’s Report, para 19, 3.17; Committee of Public Accounts, Completing Crossrail, One Hundred and Ninth Report of Session 2017–19, HC 2127, 19 July 2019 12 C&AG’s Report, para 3.17 13 Q 8 14 Q 28 15 Abbey Wood was not included in this list of central section stations as it is being delivered by Network Rail. 16 Q 7 17 C&AG’s Report, para 3.14 18 Committee of Public Accounts, Completing Crossrail, One Hundred and Ninth Report of Session 2017–19, HC 2127, 19 July 2019; Q 19 19 Q 19–22 20 C&AG’s Report, para 11 21 Values have been rounded and are in cash prices 22 C&AG’s Report, figure 8 10 Crossrail: A progress update did not impact on the programme schedule as it was able to recover the lost time.23 The Department told us the £390 million increase in Network Rail costs was due to historical issues, such as adding previously missing scope; impacts of the Carillion liquidation which took time and money to re-tender contracts; and lower than expected productivity of contractors.24 Show less

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 … Read more 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 Show less

TfL told us that further funding may not be needed if the railway is opened earlier and everything goes to plan.29 By July 2021, Crossrail Ltd expected to have updated its plans to reflect progress and risks remaining, which would … Read more TfL told us that further funding may not be needed if the railway is opened earlier and everything goes to plan.29 By July 2021, Crossrail Ltd expected to have updated its plans to reflect progress and risks remaining, which would inform its range of potential opening dates and costs.30 This has been delayed by up to two months.31 Funding Show less

In August 2020, Crossrail Ltd announced that up to £1.1 billion of further funding would be needed to complete the programme. In December 2020, the government agreed to loan the Greater London Assembly (GLA) £825 million to complete the programme, … Read more In August 2020, Crossrail Ltd announced that up to £1.1 billion of further funding would be needed to complete the programme. In December 2020, the government agreed to loan the Greater London Assembly (GLA) £825 million to complete the programme, which represented the limit of what the GLA could prudently borrow.32 This additional funding brought total funding for Crossrail Ltd to £15,790 million.33 To date, the Department has provided £2,875 million of loans to Crossrail Ltd to complete the Crossrail programme These loans are: £750 million to TfL in December 2018; £1,300 million to the GLA in December 2018; and an additional £825 million to GLA in December 2020. 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 23 Q 11 24 Q 14 25 C&AG’s Report, figure 11 26 Q 12 27 Qq 26, 45 28 Q26; C&AG’s Report, para 3.23 29 Qq 12, 27 30 C&AG’s Report, para 3.19 31 Elizabeth Line Committee, 15 July 2021, page 30, para 4.7 32 C&AG’s report, Appendix 3 para 3 33 Funding for Network Rail costs is agreed separately to funding for Crossrail Ltd. Total funding for the Crossrail programme is currently £18.8 billion – £15,790 million to Crossrail Ltd and £2,980 million to Network Rail. Total funding excludes the cost of new trains and depot. Crossrail: A progress update 11 could take up to 2043 for full repayment.34 The TfL loan is to be financed and repaid from TfL’s own revenues.35 The government has separately provided over £4 billion of loans to TfL during the COVID pandemic to support the continued running of services.36 Show less

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 … Read more 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 Show less

The Elizabeth line services will open in stages as different part of the line are completed. Services have been running on the eastern and western ends of the line (under the brand name ‘TfL Rail’) since June 2017 and May … Read more The Elizabeth line services will open in stages as different part of the line are completed. 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.41 Crossrail Ltd expects the central tunnelled section to open between February and June 2022 and will operate a shuttle service between Abbey Wood and Paddington.42 Show less

Once the central section opens, commuters must still change to other Elizabeth line services to continue their journeys on the eastern and western ends. The opening of full east-west services must align with national rail timetable changes which take place … Read more Once the central section opens, commuters must still change to other Elizabeth line services to continue their journeys on the eastern and western ends. The opening of full east-west services must align with national rail timetable changes which take place in May and December each year. TfL told us it was reviewing the staged opening approach inherited from the previous Crossrail Board in order to deliver more services sooner. TfL told us there is potential to operate services, for example, from Shenfield in the east, through the central section to Paddington, or Heathrow through to Canary Wharf, as soon as September 2022. Crossrail Ltd told us that this approach would deliver the majority of passenger benefits by September 2022. TfL told us that it does not expect to run full east-west services, without an interchange, until December 2022. The Department told us that it expected the final Elizabeth line timetable of services to run from May 2023.43 We have previously reported on the challenges and risk of disruption following the introduction of timetable changes and new services onto the National Rail network. In our Rail management and timetabling report we found that the Department did not ensure, as it should have done, that those responsible for the railway were clear about their roles and that they worked together effectively, contributing to major disruption and misery for passengers.44 34 Qq66, 67 35 Mayoral Decision MD2702, Additional funding for Crossrail, November 2020, para 1.6 36 Government agrees conditions-based £1.08 billion funding deal with Transport for London - GOV.UK (www.gov. uk) 37 Q 18 38 Transport for London, Financial Sustainability Plan, January 2021. 39 Q 18 40 Q 48 41 C&AG’s report, para 10 42 Q 16 43 Q 32–35 44 Committee of Public Accounts, Rail management and timetabling, Eighty-first Report of Session 2017–19, HC 1793, 27 February 2019 12 Crossrail: A progress update Show less

In April 2019 we reported that the Department, TfL and the previous Crossrail Ltd management team had focussed on a fixed delivery date of December 2018, which led to warning signs that programme was in trouble being missed or ignored.45 … Read more In April 2019 we reported that the Department, TfL and the previous Crossrail Ltd management team had focussed on a fixed delivery date of December 2018, which led to warning signs that programme was in trouble being missed or ignored.45 The Department told us that it was not falling into the trap of past behaviours which is why it is presenting the opening date as a range.46 However, with the expected opening window of services fast approaching, passengers and businesses will need clarity on what Elizabeth line services will be available and when they will start in order to adequately prepare. 45 Committee of Public Accounts, Crossrail: progress review, Ninety second Report of Session 2017–19, HC 2004, 3 April 2019 46 Q 25 Crossrail: A progress update 13 2 Benefits and lessons learned from the programme Achieving the benefits Show less

Construction work on the programme started in 2009 and tunnelling began in 2012.47 The majority of major construction work is complete and Crossrail Ltd is now transferring assets, such as stations, to Rail for London Infrastructure (RfLi) and London Underground … Read more Construction work on the programme started in 2009 and tunnelling began in 2012.47 The majority of major construction work is complete and Crossrail Ltd is now transferring assets, such as stations, to Rail for London Infrastructure (RfLi) and London Underground who, along with Network Rail, will maintain and operate different parts of the railway.48 Crossrail Ltd estimates that the central section of the Elizabeth line will be open to passengers between February 2022 and June 2022.49 Our evidence session was in July 2021, some seven months before the earliest opening date. Show less

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 … Read more 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 Show less

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 … Read more 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 Show less

The Department told us that Crossrail had completed a property and regeneration study looking at 2008 to 2016 which identified some 90,000 homes and four million square feet of office space resulting from Crossrail. It also noted plans in place … Read more The Department told us that Crossrail had completed a property and regeneration study looking at 2008 to 2016 which identified some 90,000 homes and four million square feet of office space resulting from Crossrail. It also noted plans in place for 12 major developments around the Elizabeth line stations and Crossrail sites, such as 3,700 new homes at the Royal Arsenal site in Woolwich. The Department said it would do formal evaluations of Crossrail at two year and five year stages, and has set a baseline against which to measure some benefits.55 47 C&AG’s Report, Crossrail, Session 2013–14, HC 965, 24 January 2014, Figure 2 48 C&AG’s Report, para 10 49 Qq 10, 16 50 Q 75 51 C&AG’s Report, paras 4.2, 4.13. 52 Q 75 53 Q 72 54 Q 70 55 Q 74 14 Crossrail: A progress update Show less

The NAO report sets out what it would expect to see in place to achieve benefits. It reported that the Department and TfL did not have a clear overarching benefits management strategy or plan for the Elizabeth line, but had … Read more The NAO report sets out what it would expect to see in place to achieve benefits. It reported that the Department and TfL did not have a clear overarching benefits management strategy or plan for the Elizabeth line, but had started work on one since its fieldwork.56 Local economic growth and regeneration requires sustained effort and vision over a long period, as well as buy in from local stakeholders.57 The Department told us that TfL was developing a full strategy which would be published in the summer, setting out the actions to help realise those benefits.58 Crossrail Ltd told us that the Elizabeth line has a 120 year design life and so there is “plenty of time and opportunity for people to come back to the Elizabeth line”.59 Learning lessons Show less

We have examined many major transport programmes over the years, including modernising the Great Western railway, the Sheffield to Rotherham tram-train, the Thameslink programme, the A303 Stonehenge tunnel, High Speed Two and Crossrail. We have seen common issues around programmes … Read more We have examined many major transport programmes over the years, including modernising the Great Western railway, the Sheffield to Rotherham tram-train, the Thameslink programme, the A303 Stonehenge tunnel, High Speed Two and Crossrail. We have seen common issues around programmes not keeping to cost or schedule, a lack of transparency about how programmes are progressing, and weaknesses in leadership and governance.60 Show less

We have asked the Department for the lessons it has learned from these experiences on several different occasions and we asked again at this session in July. The Department referred again to the report it had produced with the Infrastructure … Read more We have asked the Department for the lessons it has learned from these experiences on several different occasions and we asked again at this session in July. The Department referred again to the report it had produced with the Infrastructure and Projects Authority, following the announcement of delays and cost increases on the Crossrail programme in July 2018: Lessons learned from transport for the sponsorship of major projects.61 The Department repeated that as well as the lessons learned report, it has run an “extensive project development improvement plan” across the Department. It told us that the plan aims to strengthen the Department’s capability, governance, culture and transparency. It also said that it had shared its plan with colleagues across government through an infrastructure steering group.62 Show less

The Department also referred to the lessons it and HS2 Ltd have learnt from the difficulties Crossrail had in integrating the 36 main works contracts and ensuring that they work together. Informed by the Crossrail experience, at our June 2021 … Read more The Department also referred to the lessons it and HS2 Ltd have learnt from the difficulties Crossrail had in integrating the 36 main works contracts and ensuring that they work together. Informed by the Crossrail experience, at our June 2021 session on HS2, HS2 Ltd and the Department told us of their different approach to contracting for railway systems, which involves an alliance approach.63 However, the Department has not demonstrated to us in practical terms what it is doing differently in its management and oversight of major projects, what tangible improvements it has seen, nor the real- 56 C&AG’s report, paras 4.14, 4.16 57 C&AG’s report, para 4.17 58 Q 74 59 Q 76 60 Committee of Public Accounts, Modernising the Great Western Railway, 44th Report of Session 2016–17, 22 February 2017; Committee of Public Accounts, Sheffield to Rotherham tram-trains, 9th Report of Session 2017–19, 11 December 2017; Committee of Public Accounts, Update on the Thameslink Programme, 20th Report of Session 2017–19, 5 February 2018; Committee of Public Accounts, High Speed 2: Spring 2020 Update, 3rd Report of Session 2019–21, 6 May 2020; Committee of Public Accounts, Transport infrastructure in the South West, 104th Report of Session 2017–19, 24 June 2019. 61 Q 78; Lessons learned from transport for the sponsorship of major projects, Department for Transport and the Infrastructure and Projects Authority, April 2019. 62 Q 78 63 Q 78; Committee of Public Accounts, Oral evidence: High Speed 2, HC 329, Qs 22–23 Crossrail: A progress update 15 world impact its changes have had. Without this information, we cannot be assured that the Department has embedded lessons throughout the Department and its arms-length bodies. 16 Crossrail: A progress update Show less