One of the most curious aspects of the Autumn Statement was the fact that of the promised rail improvements, the first in the list is the Northern Line Extension from Kennington to Battersea. This is odd for two reasons.
First, the scheme is supposed to be funded entirely by the private sector and therefore in a sense is nothing to do with Osborne’s statement. However, in fact, the developers have never promised to make up the whole cost – variously estimated at £500m (without optimism bias) to £900m – and the source of the remaining money seems to require legislative changes. At most the developers were committed to £200m, but there was some mention that they might be allowed to raise further money on the basis of securitising their future payments for Community Infrastructure Levy, the replacement of the current section 106 planning gain payments. However, this would require a change in legislation.
Secondly, the developers, Treasury Holdings, went bust barely a week after the Autumn Statement. It was widely known they were in trouble. So how come Osborne was still so keen on putting the scheme into his statement. Either he was remarkably badly informed or it was just pure cynicism. Either way, this story bears further examination especially as the whole scheme seems rather ill-thought out. That is perhaps, inevitably, why Boris supports it!
I shall be writing about this in more detail in a forthcoming column soon. But the whole thing smacks of desperation on the part of the government that their beloved private sector is helping the recovery.