Press release: Chancellor must look at new funding models to futureproof London’s transport infrastructure

• London property sector calls for innovative funding to ensure the much-needed Bakerloo line extension, Euston terminus and Crossrail 2 projects progress 
• Transport upgrades are critical to driving growth in London’s ‘Central Activities Zone’ which contributes 11% of all UK economic output 

The London Property Alliance (“LPA”), which represents the leading real estate developers and investors in central London, has called for the Chancellor to adopt innovative funding models to prevent major transport infrastructure projects stalling and continue to drive growth in central London.   

London’s Central Activities Zone (CAZ), which equates to roughly ‘travel zone 1’, contributed £315bn to the UK economy in 2024, 11% of the total national output, and supports 2.2 million jobs. 

Ahead of the Spring Statement (26 March 2025), the LPA has highlighted that improvements to the capital’s transport infrastructure can serve as a catalyst for investment and job creation, with the opening of the Elizabeth line leading to 171 hotel openings, 2,666 new food and beverage outlets and 12 museums, all of which were vital to London’s economic recovery post-COVID.  

Recent analysis by the LPA and think-tank Centre for Cities found that Tube ridership in London reached 87% of pre-pandemic levels at the end of 2024, significantly ahead of New York (77%) and Hong Kong (82%). However, despite a robust recovery in usage, Transport for London’s (TfL) capital programme is significantly smaller than that of its main international peers, with the £1.86bn per year committed for 2022/23 – 2026/27 equivalent to just 11% of the resources slated for New York state’s Metropolitan Transportation Authority (MTA) and 44% of that of Paris region’s île de France Mobilités (IDFM).  

Amid fiscal pressure and cuts to Government spending, the LPA has called on the Chancellor to adopt innovative funding models to move forward with key infrastructure projects such as the Bakerloo line extension, Euston HS2 terminus and Crossrail 2. Its recommendations include: 

1. Explore the introduction of additional development taxes, similar to the Mayoral Community Infrastructure Levy (MCIL) which contributed to the funding of the Elizabeth Line
2. Consider business rates supplements within central London to create additional long-term funding streams  
3. Use farebox income to secure debt to unlock major projects 
4. Introduce mechanisms that accelerate the release of unspent Community Infrastructure Levy (CIL) contributions to help unlock transport projects.  

Alexander Jan, Chief Economic Advisor, London Property Alliance said: “Central London is the most economically productive area in the UK and therefore absolutely critical to the Chancellor’s growth mission.  

“The opening of the Elizabeth line brought a huge economic boost but, with London’s population set to reach 10 million in the coming years and amid fierce competition for businesses and talent from Paris and New York, we cannot afford to stand still.  

“Government must be bold in providing a clear timetable for the delivery of projects such as the Bakerloo line extension, the new terminus at Euston and Crossrail 2. With little fiscal headroom, the Chancellor must look at all funding options, including additional levies for those businesses in central London that will benefit from these ambitious projects. Now more than ever, we need a creative and collaborative approach between public and private sectors.”