The Government has said that ‘no decision has been made’ on whether a ballot with local firms over extra business rates to help pay for London’s £16bn Crossrail project would be required.
Cross London Rail Links’ business plan assumes that London businesses will cover one-third of the east-west rail link costs, through a mixture of direct contributions, a supplementary business rate, and the planned community infrastructure levy.
The Confederation of British Industry has urged that a vote is held with businesses for all proposals for supplementary business rates, unless there is a way of treating Crossrail as a unique scheme that would not set a precedent.
The Treasury had suggested that ballots should be required where supplementary business rates would pay for one-third of the cost of the scheme. A newspaper claimed this week that the mayor feared a legal challenge without a formal exemption, but that communities secretary Hazel Blears’ department had refused to give this.
A spokeswoman told Surveyor only that the plans were still ‘under discussion’, and would be ‘subject to approval by parliament’.
Line-by-line scrutiny of the Business Rates Supplements Bill is due to start in the Lords next week. Baroness Andrews, for the Government, said on its second reading in the Lords that she was ‘delighted’ with the response by peers.
Mayor Boris Johnson also hopes to raise around £300M from Section 106 contributions, which have been declining, and from the community infrastructure levy. The Government stated in last month’s Budget that the levy would be delayed until 2010 ‘to assist the property industry’.
The Treasury also unveiled plans to investigate a further way of raising money from businesses for infrastructure, seen as more palatable in the West Midlands – the ‘accelerated development zone’ concept.
This would entail borrowing against estimated new business rate income created by introducing new infrastructure – something the West Midlands conurbation’s local authorities have declared could pay the Midlands Metro extension (Surveyor, 6 November 2008).
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