The NAO says that the benefit:cost ratio in the latest update of the business case, in 2011, is 1.97:1. This is within the Department for Transport’s definition of ‘medium’ value for money, a range of 1.5 to 2.
If estimated wider economic benefits are included, the benefit–cost ratio increases to 3.1:1. That means that the £14.8bn being invested on Crossrail will give a return of £45.9bn.
The 48-page report says that The Department for Transport, together with its co-sponsor Transport for London and its delivery body, Crossrail Ltd, “have done well to protect taxpayers’ interests in the Crossrail programme”.
It says: “In the early years, they took effective action to stop costs escalating and to obtain more competitive rates from suppliers during the recession. During the construction phase, the governance arrangements and oversight of the project have ensured tight management of the programme so that delivery to both cost and schedule are well managed.
“The late decision to change funding of the rolling stock introduced a new delivery risk, but this is now being managed. The strategic need for Crossrail has become clearer over time as forecasts of population and employment growth in London have increased. The Department forecasts that Crossrail will bring £1.97 of transport benefits for every £1 of cost. Overall, if progress to date can be maintained, and risks managed, Crossrail is on track to achieve value for money.”
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About half of the infrastructure work is now complete. Progress is just behind schedule, but Crossrail Ltd has taken steps to improve the progress against schedule and it remains confident that it will meet the planned delivery date. Forecast costs remain within available funding of £14.8bn. However, Crossrail will not fully open until December 2019 and a number of risks remain, in particular the delivery of the Crossrail trains and the appointment of the operator.
Amyas Morse, head of the National Audit Office, said: “The sponsors and Crossrail Ltd have so far done well to protect taxpayers’ interests, by taking early action to stop costs escalating and, during construction, tightly managing the programme. There is still a long way to go and the Department [for Transport] must continue to manage risks to protect its investment in Crossrail.”
Margaret Hodge MP, who chairs the House of Commons Public Accounts Committee, concurred: “The Crossrail project has been well managed and controlled to date. It is on track to deliver on time and within budget, and they deserve praise for their success so far.”
She added: “I was concerned to learn that in 2009, the estimated costs of Crossrail had increased to £17.8bn. However, Crossrail Ltd, the Department for Transport and Transport for London appear to have worked together to reduce these estimated costs by around £3bn, which is £1.1bn below the initial funding package.”
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