Tube link to unlock billions in growth

Published on
February 17, 2012

A leading economic consultancy says extending the Northern Line to Nine Elms could deliver between £1.6bn and £7.9bn in growth to the UK economy.

The independent report by Volterra Partners says the economic benefits of building the two new Tube stations would pay for the scheme between three and nine times over.

The top rate of return could be achieved if the scheme generates a high level of foreign investment in the Nine Elms regeneration area.

The figures compare well to the Crossrail project which delivers a return on investment of between 4 to 1 and 5.9 to 1 using the same Department for Transport (DfT) cost benefit model.

According to the report, the Northern Line Extension (NLE) would enable the underdeveloped Nine Elms district to support the same high levels of commercial activity as the rest of central London.

This subsequent rise in economic outputs and inward investment means the scheme offers exceptionally high value for money.

Nine Elms is a 450 acre regeneration area on the South Bank of the Thames, opposite Westminster . A multi-billion development programme has now begun transforming this industrial district into a high density residential and business quarter.

The NLE will provide the extra transport capacity the area needs to support its growing uses and will speed up the regeneration process, according to Volterra.

A fully developed Nine Elms could provide up to 25,000 new jobs, 16,000 new homes and will include the new home of the US Embassy and a redevelopment New Covent Garden Market.

The Volterra study was commissioned by Transport for London (TfL) and Wandsworth and Lambeth Councils. The findings add to the scheme’s business case and will be included in its planning application – called a Transport and Works Act Order (TWAO) – which is now being prepared by TfL.

The project is backed by Her Majesty’s Treasury and the Mayor of London as a key measure to drive up economic growth.

The TWAO application could be submitted in early 2013 subject to agreeing funding and financing arrangements. The new Tube stations could be open by 2018.

Key findings from the Volterra report:

• The NLE would expand the Central London Activity Zone – one of the most productive commercial districts in the world.
• The NLE would generate approximately £4.5 billion in additional tax revenue for the Exchequer.
• The money spent delivering the NLE would be repaid between three and nine times over through increased economic outputs and increased foreign investment in the UK .
• The NLE would more than treble the number new of jobs created in the area – 25,000 compared to 8,000 without the NLE.
• It would almost double the number of new homes in the area – 16,000 compared to 7,500 without the NLE.
• The NLE would mean Nine Elms could support an additional 20,000 new residents. Approximately 1,500 of the new jobs created could go to local people who would otherwise be out of work. This would represent a 25 per cent drop in local unemployment.

The report concludes:

“The Vauxhall, Nine Elms, Battersea Opportunity Area offers the capability of providing an extension to London ‘s Central Activity Zone. This is the area of London which provides the highest density of activity and the highest productivity and economic added value. Facilitating such investment [through an extension of the Northern Line] is thus a contribution to economic growth as a whole.

“…the real benefit is in its potential to catalyse development [in Nine Elms] by providing accessibility and enabling more productive jobs to be created, increasing the overall effectiveness of London ‘s high productivity area.”

Volterra chairman Bridget Rosewell said:

“Nine Elms sits within the most productive commercial territory in the UK . The Northern Line Extension will unlock its clear potential as an international business district with a high level of employment density.

“The new Tube link would give Nine Elms the transport capacity it needs to close the gap on its neighbours and would effectively expand the engine room of the UK economy. In terms of value for money the scheme compares well with much larger investments such as Crossrail and the benefits would start to be realised quite quickly.”

Leader of Wandsworth Council Ravi Govindia said:

“This scheme would expand one of the world’s the most productive commercial centres and create 25,000 new jobs. A large proportion of the construction costs will be met directly by private development in Nine Elms and the public investment will be repaid many times over.

“We’re not talking about a far-off scheme like High Speed 2 or the Estuary Airport – the design, planning and consultation process is well advanced and work could begin at the end of next year.”

Leader of Lambeth Council Steve Reed said:

“As well as creating 25,000 jobs and providing a major boost to the UK economy, this scheme is going to bring fantastic benefits for people in south London , including a new tube station in the borough at Nine Elms, homes, leisure facilities and public spaces. It’s a huge opportunity that we want to see realised as soon as possible.”

Boris Johnson, the Mayor of London, said:

“This report really rams home just how much potential there is in the Nine Elms area, which offers the greatest potential for growth and development in London since Canary Wharf.

“Developers have been reluctant to build there without adequate transport links; but the Government have outlined their support for an extension of the Northern Line and we hope to have submitted a formal planning application by early next year.”

A full copy of the reoprt can be downloaded from the council’s website.