14. The Crossrail programme will provide a new railway that connects Reading and Heathrow west of London, with Shenfield and Abbey Wood in the east. The Department and Transport for London have jointly sponsored the programme, since the introduction of the Crossrail Bill to Parliament in 2005. Crossrail Limited, a wholly-owned subsidiary of the Transport for London, was set up to build the new railway. In 2010, a funding package of £14.8 billion was agreed for the programme, with contributions from Transport for London, the Department, Network Rail and London businesses.24
15. In August 2018, Crossrail Limited announced that the central section of the new Elizabeth line would not open as planned in December 2018. The Department and Crossrail Limited had attributed the delays to be a result of some infrastructure not yet being complete, the complexity of work to integrate the required signalling and other systems, and the need to set aside more time for testing of the railway before opening.25 The Department told us that Crossrail was an extremely complex programme to complete, but it believed it could be delivered and that it did not depend on "world-beating" technology.26
16. The Transport Committee of the London Assembly reviewed the Crossrail programme in the Autumn of 2018. In written correspondence to us, it told us that transparency in key decision-making forums, and independent scrutiny of the programme, had been lacking from the outset of the programme. It concluded that the programme entered serious difficulties when an electrical explosion happened at Pudding Mill Lane in late 2017, but commercial issues were used to prevent scrutiny of the issues at the time.27 In October 2018, we questioned the Department on when it became concerned about delivery of the programme. The Department told us that although Crossrail Limited formally notified the Secretary of State and Mayor of London on 30 August 2018 that the programme would be delayed, it began to have concerns in "spring" 2018. It told us that Crossrail Limited was answering the Department's questions on delivery of the programme and Crossrail Limited maintained that the schedule was still possible, although its level of confidence started to diminish overt time. The Department also told us that it questioned Crossrail Limited's Chief Executive at the Department's June 2018 executive committee to probe further on delivery, but it was not confident in the assurances given.28 We remain unconvinced that the Department had a sufficient and timely grip on the programme.
17. On 10 December 2018, the Department and Transport for London announced that they would provide additional funding of £1.4 billion for Crossrail, bringing the total funding envelope for the programme to £17.6 billion, excluding contingency.29 This additional funding comprised: a £1.3 billion loan from the Department to the Greater London Authority (GLA) at gilt plus 0.8% over ten years; and a £100 million contribution from the GLA. A gilt is a loan security issued by the government. The Department told us it was not possible to specify what the equivalent interest rate would be as this will be determined by the gilt levels in the market at the time the loan is drawn down.30 In addition to the £1.4 billion, the Department has agreed that a further loan of £750 million could be made available to Transport for London as a contingency. The Department told us that, while the details of the £1.3 billion loan were still to be finalised, Londoners as the primary economic beneficiaries of Crossrail would ultimately pay for the cost overrun through business rate supplements and the mayoral community infrastructure levy. The Department told us that it had tasked the new Chief Executive of Crossrail Limited, to devise a new schedule for the programme which it expected in January 2019. In the absence of this work, the Department would not commit to a revised completion date for Crossrail.31
18. We were concerned by the extent of the additional costs of the programme and whether the Department was sure that the new financing package was sufficient to cover the remaining costs of the programme. The Department accepted that this was a significant cost overrun, and that it was deeply disappointed and frustrated by it. While accepting that there was continuing uncertainty regarding the timetable and therefore remaining costs, the Department told us that the financing package should be sufficient to cover the remaining costs of the programme, given KPMG's advice that the remaining programme costs could be between £1.6 billion and £2 billion.32 We expect to examine the Crossrail programme in further detail when the NAO reports on the programme in 2019.
19. We, and our previous committees, have scrutinised a number of large transport programmes in recent years, including the Thameslink upgrade programme and the modernisation of the Great Western Railway. The Thameslink programme aims to increase capacity and relieve crowding on rail services in London and the south east. It represents a substantial change in how the railway functions in this region, involving new technology, new ways of managing passengers at stations and new maintenance arrangements. When we examined the programme in February 2018 we found that, given the scale and scope of changes, the Department did not plan early enough how new services would be introduced. It decided at a late stage that, in order to minimise the risk of passenger disruption, the full introduction of planned services should take place 12 months later than previously planned.33 The Department is modernising the Great Western Railway to upgrade infrastructure, trains and services along the route from London to south-west England and south Wales. When we examined the programme in March 2017 we found that the Department failed to integrate all the elements, including plans for electrification of the line and for buying new trains, successfully at the planning stage and did not manage the programme in a joined-up way. It also failed to challenge Network Rail's plans effectively and did not put in place a clear structure of accountability.34
20. In September 2017, the Department announced that it would upgrade the Trans-Pennine route to reduce journey times and improve passenger services. The Department told us that it was committed to the £2.9 billion upgrade, the largest programme within Network Rail's programme from 2019 to 2024, and that the first works were due to start in Spring 2019. Network Rail told us that between Manchester to Leeds and York the route crosses the Pennines and there is lots of tunnelling. Because the route was primarily a two- track railway, with limited rail or road alternatives, it had sought to achieve a balanced package of improvements that prioritised capacity improvements, without improvement works causing such disruption that passengers abandon the railway.35 We asked the Department and Network Rail what lessons they had learned from major programmes. The Department identified improved board oversight and closer working with train operators. Network Rail told us that it was important to be clear what the programme will deliver at the outset, to work in close co-operation with other stakeholders, and to work closely with the supply chain to use new technology.36
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24 Report by the Comptroller and Auditor General, Crossrail, Session 2013-14, HC 965, 24 January 2014
25 Q 28; Crossrail Ltd announcement: 'Elizabeth Line services through central London to start in 2019', 31 August 2018; Committee of Public Accounts, Oral evidence: Department for Transport: Implementation of Brexit, HC 1657, 24 October 2018, Q 44; Crossrail Ltd oral evidence to the Transport Committee of the London Assembly, 12 September 2018
27 Letter from the Chair of the London Assembly Transport Committee to the Chair of the Public Accounts Committee, 7 December 2018
28 Committee of Public Accounts, Oral evidence: Department for Transport: Implementation of Brexit, HC 1657, 24 October 2018, Qq 36-43, 46-48; Department for Transport letter to Chair, 5 November 2018
29 Q 1; HC Deb, 10 December 2018, Col 8WS
32 Qq 23-24
33 Committee of Public Accounts, Update on the Thameslink Programme, Twentieth Report of Session 2017-19, HC 466, 23 February 2018
34 Committee of Public Accounts, Modernising the Great Western Railway, Forty-fourth Report of Session 2016-17, HC 776, 3 March 2017
35 Qq 121-125; Department for Transport press release, 'Government invests in northern digital plans to improve trans-Pennine journeys', 22 September 2017
36 Q 126