A new report from the National Audit Office (NAO) finds that the revised schedule and budget agreed for Crossrail in April 2019 was unachievable because the programme was further from being complete than Crossrail Ltd and the programme's sponsors understood.
Although cost increases and schedule delays are in line with Crossrail Ltd's 2020 estimates, they exceed the available budget and there are still significant issues that could arise as the railway is brought into service.
The joint sponsors (the sponsors) for Crossrail are the Department for Transport and Transport for London (TfL), while Crossrail Ltd, a subsidiary of TfL, is responsible for delivering the programme.
In 2018, the sponsors strengthened their oversight of the programme and brought in a new management team for Crossrail Ltd when it became clear became clear that Crossrail central section would not be opened on time, or within the available funding. When the NAO last reported in May 2019, the funding package for Crossrail stood at £17.6 billion, the forecast cost was £17 billion, and the central section of the Elizabeth line was due to open by March 2021 at the latest.
The new management team hired in November 2018 had to start largely from scratch when setting a revised plan to complete the programme. Milestones were repeatedly missed in 2019 and into 2020 due to Crossrail Ltd continually uncovering problems or identifying requirements for new work. Despite contractors meeting only 30% of milestones on average throughout 2019 and early 2020, Crossrail Ltd continued to base its plans on more optimistic levels of productivity.
The COVID-19 pandemic added further cost and delay to the programme, but Crossrail Ltd took the opportunity to improve its planning of remaining work. Crossrail Ltd estimates that £228 million of the increase in cost since April 2019 is a direct result of factors relating to COVID-19. In response to the delays and the need to make workspaces safe, it worked closely with contractors to plan and re-sequence remaining work. Between August 2020 and April 2021, contractors met around 90% of milestones.
As at May 2021, most major construction work is complete, and Crossrail Ltd is in the process of transferring assets, such as stations, to Rail for London Infrastructure (RfLi) and London Underground, who will maintain and operate different parts of the Elizabeth line. In March 2021, Crossrail Ltd achieved a key milestone to allow it to begin operational testing of the railway, known as trial running.
The cost estimate for Crossrail exceeds the funding package. In August 2020, Crossrail Ltd confirmed it would need between £800 million and £1.1 billion more funding to complete the programme. In December 2020, the Department agreed £825 million of additional funding. The latest cost estimate of £18.9 billion at May 2021 exceeds the available funding package by £120 million, but it is within the upper limit of Crossrail Ltd's August 2020 cost estimate.
There are still significant issues that could affect cost and schedule. Cost control depends on Crossrail Ltd completing its main contracts, which represent a significant proportion of spend, and work progressing to time. So far, the first stage of operational testing, known as trial running, is six weeks behind the ‘best case' target date, but still within the range of dates as set out in the revised August 2020 schedule. The software update needed for the next stage of testing is also delayed by three-to-eight weeks.
Several organisations are now responsible for bringing the Elizabeth line into service, which adds complexity. As the central section approaches the start of passenger services, responsibility for completing, maintaining and operating the Elizabeth line is shared between London Underground, RfLi, Network Rail and Mass Transit Railway Elizabeth line (MTREL). The NAO often finds that programmes have problems when roles and responsibilities change, and when they are shared between different bodies.
More needs to be done to plan for and deliver the wider benefits of the Elizabeth line. The initial business case (2011) set out the benefits of building an accessible railway that achieved wider economic and environmental aims. However, the context within which the Elizabeth line will open is different from 2011, particularly given the increase in flexible and remote working. Achieving the wider economic benefits of the original business case will require sustained vision over a long period. Although TfL has a plan for integrating the Elizabeth line into its transport network, it does not yet have a plan for maximising the benefits set out in the business case.
The NAO recommends that Crossrail Ltd and RfLi should work together to set out a clear plan for handing the Elizabeth line over to RfLi in preparation for the start of passenger services. TfL and government should also set out a strategy to maximise the potential benefits of the Elizabeth line.
Gareth Davies, the head of the NAO, said: "Crossrail was further from completion than anyone understood when the Department, TfL and Crossrail Ltd reset the programme in 2019. The problems we identified in our previous report have been difficult to address and have continued to affect the programme.
"There are now encouraging signs that Crossrail is in a more stable position. However, it will require further funding to complete, and there are still significant risks that must be managed as the Elizabeth line undergoes operational testing. As the Elizabeth line nears the start of services in 2022, TfL and government must think through how to realise the benefits of the railway in order to maximise the return on almost £19 billion of investment."
