Lambeth Council to choose Northern Line extension route

The success of the local area depends on the delivery of this long awaited development, a planning expert said.

The transport planning officer has recommended to the Council's cabinet that it choose an underground extension to Battersea, with an intermediate stop near to Wandsworth Road. The cabinet next sits on the 16 January and details of the proposals are outlined in Lambeth's cabinet report.

The proposed transport link would accommodate the additional demand for public transport resulting from any redevelopment of Battersea Power station and other proposed developments within the area.

"The future success of the Vauxhall and Nine Elms Opportunity Area depends on the successful delivery of these stations. Funding via TIF, s106 and CIL is key," said Richard Ford, a planning law expert at Pinsent Masons, the law firm behind Out-Law.com.

Tax incremental financing (TIF) is a proposed new power that would allow councils to borrow against their predicted future increase in business rates and can be used to fund developments. Councils can also raise money by using an agreement under section 106 of the Town and Country Planning Act, which enables councils to seek contributions towards local infrastructure. Councils can also now charge a new Community Infrastructure Levy (CIL) on new developments, the proceeds of which can be used to fund local infrastructure.

"Any new owners of Battersea power station will need to look at this very carefully. There remains a desire for Greater London Authority, Transport For London or Department for Transport guarantees to facilitate the flow of private investment," said Ford.

Following consultations on four proposed route options, all situated within the Vauxhall Nine Elms and Battersea (VNEB) Opportunity Area (OA), option two was strongly supported by the public, the VNEB Strategy Board and the Council. Option two proposes an extension to the underground from Kennington to Battersea with an intermediate station on Wandsworth Road, in Lambeth.

Following a decision by the Council on the preferred route option and ventilation shaft locations, Transport for London will submit a formal planning application to the Department for Transport for final approval.

The project is expected to go ahead despite there being no agreed funding, following the administration of the former owner of the power station, Treasury Holdings. Treasury Holdings had agreed to contribute £200m to the extension as an obligation attached to the planning permission.

The Government has agreed to underwrite the £200m commitment to the scheme whilst a new developer is found.

Additional funding for the scheme would be provided through planning obligations using section 106 contributions from developers within the OA. Other options to bridge the funding gap are being investigated and tax increment financing and the community infrastructure levy are currently being discussed, but no option has been confirmed as yet.

The Government announced its support for the scheme in the Chancellor's Autumn Statement. However, its support is subject to a commitment by April 2013 from a developer to develop the Battersea Station site and make agreed contributions to the extension of the underground.

Following development of the former power station, the Government will consider allowing the Mayor of London and partner authorities to borrow against the Community Infrastructure Levy (CIL) to support the scheme, according to the Council.

It is likely that the timetable will slip as a result of the uncertain funding agreements and therefore an alternative means to bridge the funding gap will need to be sought in order to ensure delivery of the Northern Line extension, the Council said.

The extension is planned to open in 2018.