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Nine Elms business rates to fund Northern Line extension

An 'innovative' finance package to fund the London Underground extension into the Vauxhall Battersea Nine Elms Opportunity Area is set to be agreed between the London Boroughs of Wandsworth and Lambeth and Transport for London (TfL).21 Feb 2013

According to a statement by Wandsworth Council, the package will use Enterprise Zone legislation to retain business rates to fund the planned London Underground extension.

Under the proposals, which Councils, the Greater London Authority (GLA) and the Treasury have been working on over the last year, the GLA will borrow up to £1 billion to fund the extension of the Northern Line and the Government will provide a repayment guarantee to minimise borrowing costs.

Repayments will be made partly from developer contributions under section 106 agreements or community infrastructure levies and partly from revenue collected from business rates within the Nine Elms Enterprise Zone.

"This project could represent a major breakthrough in the way we pay for vital infrastructure projects in this country," said Wandsworth Council leader Ravi Govindia in a statement.

"We plan to use an enterprise zone as a funding tool for a major transport upgrade, which in turn, will create new growth, new jobs, and even greater tax receipts in the future."

"Over the long term the scheme would pay for itself while delivering a major economic and inward investment stimulus for London. It would give Battersea its first underground station and help bring an underused part of the Thames riverside back to life," Govindia said.

The £1bn Government guarantee was announced by Chancellor George Osborne in his autumn statement in December.

TfL plans to submit its application for the extension by the end of April. The Councils and TfL will need to agree the financing package beforehand so it can be included in the application.

Wandsworth Council said the proposal will go before its strategic planning and transportation overview and scrutiny committee followed by its finance and corporate resources overview and scrutiny committee and the executive will then make a final decision on 4 March.