James Ford is a columnist for City AM and was an adviser to former Mayor of London Boris Johnson on transport policy
If I told you that there was a transport project for London that would create an estimated 23,000 jobs, facilitate 11.9m journeys and it cost millions of pounds rather than billions, would I have your attention? Let me introduce you to the West London Orbital (WLO), a proposed expansion of the London Overground network from West Hampstead and Hendon to Hounslow. Projected to cost just £610m in 2021 prices (that is a lot less than the £8.2bn price tag for the Bakerloo line extension and the £40bn plus cost of Crossrail 2) and with a cost-benefit ratio of 2.2, the construction of this game-changing project would be just 3 or 4 years on current estimates. As transformational transport projects go, WLO is pretty much perfect.
Of course, London isn’t getting the WLO under current plans. Instead, London is getting the DLR extension to Thamesmead. A project that costs three times as much as WLO (£1.7bn versus £610m). A project that delivers only 3km track and two new stations compared to WLO’s 18.5km of track connecting between 15 and 21 stations. A project that extends the DLR but does not connect to any other lines, whereas WLO would connect 10 new and existing rail, tube and Overground connections. And, let’s not forget, the DLR extension would create barely half the number of jobs that WLO would.
Worse still, the Thamesmead extension is really only half the DLR extension that we need. The proposed DLR extension is only half a solution to Thamesmead’s connectivity problems. The real economic and interchange benefits would come by carrying this extension on to nearby Abbey Wood, where passengers would be able to access the Elizabeth Line, Thameslink and commuter services on the North Kent Line.
So, to summarise, the DLR extension costs three times as much, delivers half as many jobs and is only half the railway that is needed. And, best of all, it looks as though Londoners are going to be picking up the tab for it. The Treasury has not announced it is stepping in with so much as a penny of funding to help. Instead, HMT is simply letting the Mayor and TfL borrow against future earnings and fare revenue to fund the scheme. Even by the admittedly low standards that we have comes to expect from this government – and from this administration at City Hall – this is a pretty ropey deal.
Now, I’m no economist, but even I can spot that creating twice as many jobs for one-third the cost to the taxpayer sounds like a pretty good deal. That, if we want to grow London’s economy, we would build WLO and not the DLR extension. Which begs the question: why are we pushing ahead with the DLR extension? The answer is simple: housing. The only measure by which the DLR extension trumps the WLO is in terms of potential new homes built: 25,000 versus 15,800. The project will support Peabody’s existing regeneration of social housing in the area and be essential if the proposed Thamesmead New Town is ever to be more than just a pipedream.
Indeed, the prism through which this decision – and, indeed, all head-scratching London policy decisions from now on – must be viewed is City Hall’s chronic inability to build new homes. Why is the mayor abandoning his long-standing pledge to protect the greenbelt? Why are London’s affordable housing targets being torn up? And, now, why are the good burghers of West London going to have to wait even longer for the railway, jobs and growth that they need? Because Sadiq Khan has failed to build houses. Spectacularly so. Indeed, he is failing to build on such an epic scale that it is jeopardising the government’s national housebuilding targets, hence why their policy interventions are becoming more and more dramatic.
It has become much harder for the mayor to hide the scale of his failure to deliver against his existing housing targets. Within days of taking office, then Deputy Prime Minister Angela Rayner publicly rebuked Sadiq Khan for “falling well-short” on his housing targets. The mayor has already missed his own target – 52,000 a year – every year since he set it in 2021, building only around 35,000 homes per annum on average. And even that is looking like it cannot be maintained. Last year the Evening Standard reported that housebuilding in London had slumped to its lowest levels since the midst of the Global Financial Crisis in 2009. According to data from analysts Molior, work began on just 1,210 new private flats and houses in the first quarter of 2025. Perhaps most alarmingly, there were no house building starts at all in 23 out of London’s 33 local authority areas between January and March last year.
A report in January 2025 by the Centre for Policy Studies (CPS) went further, claiming that London is facing the “worst housebuilding challenge” since the second world war as there were 10,000 fewer homes which started to be built last year. According to the CPS, despite London completing more that 10,000 homes every year since 1946, the low numbers for housing starts in the region suggests that only 4,550 homes will complete constructions in both 2027 and 2028. CPS found, in the 2024/25 financial year, there were 4,170 new homes built in London, a 72 per cent fall on the 15,070 house starts the previous year.
The DLR extension is the wrong railway, at the wrong price, for all the wrong reasons. Because it is a housing project masquerading as transport policy. The citizens of Thamesmead may rejoice at their good fortune. And Sadiq Khan must be delighted that he continues to avoid being held responsible for his greatest policy failure. But let there be no doubt: this is not the railway that London needs most right now.