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Transport / Mass transit

Major government project in "going well" shocker

Well here’s a sentiment you don’t see every day:

“With Crossrail, we see a textbook example of how to get things right”

Shocking, isn’t it? In fact, since it’s so rare to see one of these in the wild, let’s take another look at it:

“With Crossrail, we see a textbook example of how to get things right”

The speaker is Richard Bacon MP, the chair of the Public Accounts Committee, which has just released a report on the new rail link. And, unusually for that august institution, which specialises in eviscerating ministers and officials for their financial screw ups, the PAC is, well, pleased. Crossrail is “broadly on schedule and being delivered within budget”, Bacon said.

This is no small thing. Crossrail is the most major of major works, a £15.8bn project to build a tunnel under central London and create a new 118km rail link from Essex to Berkshire. And major projects in this country have a habit of being a) expensive and b) late.

So why has this one gone so well? The PAC highlighted three things: a decent management team; securing the funding before they started digging; and “realistic scope”. This last is a reference to officials’ historic tendency to panic that this was the only chance they’d have to get anything built for a generation; consequently, they’d chuck everything going into a single scheme, delaying progress and sending costs through the roof.

Praise is novel – but it’s also quite boring. So, let’s look at what the PAC thinks the Department for Transport (DfT) could do better.

One thing is to share its data and expertise with local authorities, to help out with their own transport schemes. At the moment, councils effectively compete for funding with national projects like Crossrail. That’s unfortunate because councils, all too often, suck, and struggle to make their case.

As a result, projects that have “very high benefit-cost ratios” can find it hard to secure funding. Getting the DfT to help with councils’ homework makes it less likely that scarce public money is going to the wrong place: this could, if we’re very lucky, mean less focus on London, and more money for regional cities.

The other thing the DfT could do better is to explain its own thinking. The benefit:cost ratio it publicised for Crossrail was around 2:1. But this focused entirely on the basics of being able to move people around: throw in the economic benefits (greater clustering, a bigger labour pool), and it goes up to 3:1.

It was this higher figure which the DfT used when making the decision to proceed. And yet, it went mysteriously unstated, with a knock on effect on how easy the project was to fund. To quote Bacon again:

“The Department cannot maximise contributions from private sector beneficiaries of transport projects if it does not fully understand the benefits that projects will bring.”

Consequently, it struggled to prise money out of Heathrow Airport – which is, let’s remember, a business, and one which stands to benefit enormously from the shiny new rail link. The airport paid £70m towards the project. It promised three times that.

Saying Crossrail is running “on time and to budget” don’t necessarily mean it’s happened fast, of course. The new route has been on the cards for (drumroll please) 73 years now, and it took four different sets of proposals before it finally won parliamentary approval in 2005. How much money was spent investigating and promoting these earlier efforts is unclear – but it’s safe to say it was a lot.

But anyway, it’s now happening, it’s on time and it’s on budget. Risks, inevitably, remain – but if all goes well, the first trains should run in 2018.
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