Why the City of London Corporation supported Crossrail
Details of a £250m deal between the City of London Corporation and the Labour government for the Crossrail project have been discovered by the BBC.
In return, the government reinstated the "City Offset" fund from April 2010 for £10m a year.
The fund was cut by Labour in 2003.
"One of the conditions for us giving approval for this was the reinstatement by the government of the "offset", said the corporation in a statement.City cheerleader
The City of London Corporation is the local authority for the square mile with its own schools and police force.
It is also responsible for the maintenance of open spaces including much of the area around St Paul's Cathedral where it is fighting a legal battle to evict Occupy London protesters.
But it has another equally important role acting as cheerleader and lobbyist for the City of London both in the UK and internationally.
End Quote Stuart Fraser Chairman of the City of London Corporation Policy Committee
It is not public money, it's not been given to us by the government. This is private money”
It does this with private funds believed to total around £1bn which are separate from the government funds it receives.
The Crossrail deal struck between the corporation and the Labour government highlights the blurring between the corporation's two roles, that of a local authority with public funds and a lobbying body with even larger private funds.
An internal corporation document presented to councillors in October 2007 - seen by the BBC - stated that, "there would be a number of pre-conditions to be satisfied before funding was released".
One of these was "a net real terms improvement in government funding of the City Corporation".
The corporation wanted the government to reinstate a fund known as the "City Offset" which helps to pay for the local services it provides such as maintenance of Epping Forest and Hampstead Heath.
The corporation told the BBC that in return for its donation to Crossrail - which will connect Maidenhead in Berkshire with Shenfield in Essex, passing through London - the government agreed it would provide extra funding of around £10m a year from April 2010.
"The City Offset was re-instated by the previous government in 2007 following representations from the City of London Corporation," said a spokesman for the Department for Communities and Local Government.
"[It] reflects its circumstances as a local authority, and the range of functions that the City takes on that have wider resonance for London and the country as a whole,"Demand for transparency
This means the corporation could end up recouping much, if not all, of the money it is contributing to Crossrail.
As the internal corporation document the BBC has seen states, if the extra government funding to the corporation continued for fifteen years, "the eventual adverse impact on our asset base would be £15m or less".
The chairman of the Corporation Policy Committee Stuart Fraser conceded things need to change.
"I think it's fair to say we've got to look at this," he told the BBC, but defended the corporation's lack of transparency:
"The City's cash is certainly not part of the local authority's fund. It doesn't come from government so why should we, in a sense, because it is not public money, it's not been given to us by the government. This is private money," he said.