Budget unlocks £10billion that can be borrowed for London infrastructure projects, Sadiq Khan confirms

The Budget gives London greater control over borrowing and locally raised revenue. That matters because the mayor can use these powers to support large infrastructure schemes instead of relying only on central government funding. Lord Sadiq Khan said London could raise more than £10 billion for major projects.

The city will be able to retain some income tax and business rates raised locally. It can also introduce an overnight visitor levy, often called a tourist tax. A Business Rate Retention Zone will help fund the £20 million upgrade needed to bring international rail services to Stratford International.

These powers do not mean projects are already approved or fully funded. Business cases, legislation, borrowing decisions, funding arrangements and individual approvals still have to be completed. If those steps succeed, London could invest more in transport, housing and economic growth.

Borrowing more than £10 billion gives London access to money before projects generate their full benefits. This can pay for construction, station upgrades and railway improvements that would be difficult to fund from one year’s budget. It creates financial capacity, not an automatic guarantee that every scheme will proceed.

For example, the funding could support the Bakerloo Line extension, the West London Orbital and international services at Stratford International. The Stratford upgrade is expected to cost about £20 million. The mayor said London could raise north of £10 billion, giving the capital substantial potential borrowing power.

Borrowing still requires decisions and safeguards. Business cases, legislation, funding arrangements and individual project approvals must be addressed first. Once approved, London would use its new revenue powers and other funding arrangements to support repayment while the infrastructure delivers longer-term benefits.

The proposed borrowing is exceptionally large compared with the Stratford International upgrade. The article gives a figure of more than £10 billion for London’s potential borrowing and about £20 million for the station work. Using those figures, £10 billion is 500 times £20 million, and “north of” £10 billion makes the comparison slightly larger.

The Stratford project is one defined upgrade. It would help bring international rail services to Stratford International and make the station truly international for the first time. By contrast, the larger borrowing capacity is intended to unlock several major transport schemes across London.

The figures show scale, but they do not mean £10 billion has already been spent or allocated. The article says business cases, legislation, borrowing and funding decisions, and individual approvals remain necessary. The final amount available to each project will depend on those future decisions.

The proposed funding could move several important rail projects forward. These include the West London Orbital, the Bakerloo Line extension and international services stopping at Stratford International. The schemes matter because they would improve connections between areas that currently have fewer direct rail links.

The West London Orbital would connect Hendon with Hounslow using existing railway lines, mainly used by freight trains. The Bakerloo extension would add stations at Burgess Park, Old Kent Road, New Cross Gate and Lewisham. It could eventually run up to 27 trains an hour. Stratford would receive international rail services after a planned station upgrade.

The network changes are proposed, not yet complete. London still needs business cases, legislation, borrowing and funding decisions, plus individual project approvals. If those steps are secured, the projects could support new homes, jobs and wider economic growth while improving rail access.

Retaining more locally raised income tax and business rates would let London keep part of the money generated within the capital. That could provide funding for construction or help repay borrowing over time. The approach gives the mayor more control over how local economic activity supports local infrastructure.

The Budget also includes a possible overnight visitor levy, or tourist tax. Business-rate retention could support specific schemes, such as the £20 million Stratford International upgrade. Tax-increment financing was also backed to help fund a new Euston Station. Together, these mechanisms connect revenue collection with infrastructure investment.

They do not remove financial risks or guarantee repayment. The article says legislation, business cases, borrowing and funding decisions remain outstanding. If approved, stronger local revenues could help London invest billions more, support transport improvements and contribute to new homes, jobs and economic growth.

The West London Orbital may progress sooner because it can run on railway lines that already exist. That could reduce the need for entirely new rail infrastructure and allow planning to focus on adapting the current route. Lord Khan said this project could proceed most quickly.

The proposed route would connect Hendon in north London with Hounslow in west London. It would use lines mainly used by freight trains. By comparison, the Bakerloo Line extension would add stations at Burgess Park, Old Kent Road, New Cross Gate and Lewisham, with the possibility of up to 27 trains an hour.

Using existing lines does not mean the Orbital is ready to build. The article still says business cases, legislation, borrowing, funding decisions and individual approvals are needed. Its relative advantage is speed, not guaranteed delivery or completed funding.

Infrastructure is expensive to build, but its benefits can last for decades. Borrowing lets a government pay for construction now rather than waiting until it has saved the full cost. Transport investment can improve connections, unlock development and make it easier for people to reach jobs and services. Future local revenue can help support repayment.

London’s proposed projects show this principle. The West London Orbital would connect Hendon and Hounslow, while the Bakerloo extension would improve connections in south-east London. International trains at Stratford would make the station truly international. The mayor linked these investments with tens of thousands of new homes, jobs and economic growth.

Borrowing is not an automatic spending approval. London still needs business cases, legislation, funding and borrowing decisions, and individual project approvals. If those are secured, the new powers could help turn long-term transport plans into infrastructure that supports broader development.