Mayor Khan's Innovative Funding Plan for London's Transport Expansion

Sadiq Khan's Innovative Funding Strategy for London's Transport Network

The Mayor of London, Sadiq Khan, has detailed his plans to utilise innovative financing methods to deliver two major transport projects: the Bakerloo line extension and the new West London Orbital Overground line. This approach aims to bypass traditional tax-based funding, drawing inspiration from recent successful London infrastructure developments.

Funding Dispute with Government

Sir Sadiq Khan has confirmed that innovative financing will be essential for the upcoming London Overground expansion, a project notably absent from Chancellor Rachel Reeves's November Budget. While the government allocated £1 billion for the Docklands Light Railway (DLR) extension to Thamesmead, it declined to support the Mayor's proposals for the West London Orbital and Bakerloo line extension.

Reports indicate a heated disagreement erupted in Reeves's office last year, with tensions rising over the lack of funding for these infrastructure initiatives. According to sources, the Chancellor reportedly told the Mayor to leave her office during the confrontation, highlighting the friction between City Hall and Westminster on transport investment priorities.

West London Orbital Project Details

The proposed West London Orbital expansion involves transforming underutilised railway lines to create a new Overground route connecting Hounslow with Hendon and West Hampstead in North London. This ambitious scheme could see the construction of four new stations:

Old Oak Common Lane, providing future connections with HS2 services
Neasden
Harlesden
Lionel Road

The Mayor's draft budget has already earmarked £400,000 to advance the business case for this rail line, demonstrating early commitment to the project despite funding challenges.

Learning from Past Successes

Speaking at the launch of the Superloop 11 bus route from North Greenwich to Abbey Wood, Sir Sadiq emphasised that City Hall and Transport for London (TfL) would employ similar tactics to those used for the Northern line extension in 2021. He highlighted the government's willingness to collaborate on innovative financing approaches for both transport projects.

The Mayor explained: What the government has said, which we welcome, is they are going to work with us on innovative financing in relation to the West London Orbital and Bakerloo extension. This fiscal devolution will allow us to consider other ways of funding infrastructure in London.

Proven Funding Models

Sir Sadiq pointed to London's recent transport achievements as evidence that innovative financing works effectively. He noted: The rest of the country looks at us with envy in relation to what we've got. We've got the best rail line arguably in the world [Elizabeth line], the Northern line extension, Silvertown Tunnel and Barking Riverside extension.

The reality is when it comes to infrastructure, those four examples weren't funded by tax-based money, they were funded by innovative financing. What we have asked the government for is fiscal devolution and support in relation to new infrastructure.

Ahead of the Northern line extension to Nine Elms and Battersea Power Station opening five years ago, City Hall implemented levies on businesses and property owners in areas benefiting from the new connection, demonstrating a practical model for infrastructure funding.

Clarification on Funding Sources

A spokesperson for the Mayor later clarified that both the West London Orbital and Bakerloo line extension will require a combination of funding from multiple sources:

Government contributions
Transport for London (TfL) investment
Greater London Authority resources
Local funding mechanisms

This multi-source approach reflects the complexity of funding major transport infrastructure in the capital.

Complementary Transport Improvements

While pursuing these rail expansions, Sir Sadiq confirmed that the Superloop bus network will continue expanding to serve areas further from Central London. He emphasised: Particularly in outer London, there needs to be improved public transport. The DLR is going to be extended to Thamesmead, but I know having launched the Elizabeth line and the Northern line extension, it'll take some time to be built, so we don't want to wait for those train extensions.

Additional Superloop routes planned include: