West London Orbital rail plan needs funding solution

Plans for a new West London Orbital (WLO) rail service, which would run on existing railway corridors including the Dudding Hill freight line, are progressing, but a clear funding strategy remains a key hurdle. Transport for London (TfL) has consulted on the proposal, which aims to enhance connectivity between employment hubs across west London and alleviate the need for journeys into central London and back. The project is intended to fill a gap in the existing rail network, potentially transforming economic opportunities for communities historically less connected to the capital's job market.

Economic and Housing Benefits

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TfL's projections indicate that the WLO could be a significant driver of growth. The service is estimated to support approximately 25,000 new homes and create around 11,500 jobs. Beyond direct job creation, the wider economic benefits are forecast to reach up to £1.3 billion. The scheme also aims to reduce reliance on private vehicles, with an estimated removal of 650,000 car journeys each year. Key economic centres such as Brent Cross, Old Oak and Park Royal, and the Golden Mile and Great West Corridor would be better linked, benefiting sectors from technology and media to logistics and manufacturing.

The improved public transport access could also benefit Heathrow Airport, a critical piece of national infrastructure, by providing better connections via Old Oak Common to HS2 and the Elizabeth line. For communities along the proposed route, particularly in areas of Brent identified as among the most deprived nationally, enhanced access to employment, education, and services is a key objective.

Funding Challenges and Potential Solutions

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The primary challenge for the WLO is securing adequate funding. BusinessLDN, a business advocacy group, is championing greater financial autonomy for London to enable investment in such infrastructure projects. They propose exploring tax-increment financing (TIF) models, where increased property tax revenues generated by new housing development along the route could be reinvested to help fund the railway. Research by BusinessLDN and WSP modelled potential gross council tax and Stamp Duty Land Tax receipts of up to £1 billion over 25 years from housing growth associated with the WLO, against an estimated scheme cost of £1.2 billion. These figures are indicative, but demonstrate how development can contribute to infrastructure costs.

London has prior experience with TIF, notably in supporting the £1 billion contribution to the Northern Line Extension to Battersea and Nine Elms, where future business rates growth helped repay borrowing. The UK Chancellor's recent announcements on fiscal devolution, including exploring a 'London Deal' for greater control over locally raised revenues and borrowing powers, offer potential avenues for future project funding. The government has previously cited the Bakerloo Line Extension as an example of infrastructure that could benefit from greater fiscal devolution, and the WLO could similarly be supported.

Next Steps

While the case for the WLO is considered strong, with potential for improved connections, housing, jobs, and economic growth in west London, the project's realisation depends on developing a concrete funding plan. The government is expected to work with the mayor of London to explore financing mechanisms, including residential tax-increment financing, to turn the proposal into a reality with trains running on the tracks.