Should Oxford & Cambridge pay for the East West Rail?

The East West Rail project, connecting Oxford and Cambridge, is set to cost about £6bn and generate £43 billion GVA in economic growth, 710,000 jobs, and £14 billion in tax revenue. 

The University of Oxford and the University of Cambridge hold two of the largest university endowments in Europe - more than £7.1 billion and £9.1 billion, respectively. 

They are also two of the biggest beneficiaries of the East West Rail (EWR) project. This new railway, set to connect Oxford, Milton Keynes, Bedford, and Cambridge, will unlock easier commutes for employees, entrepreneurs, students and researchers, strengthen the regional tech and life sciences hubs, and make collaboration between the universities more seamless. Yet, while the public is being asked to foot the bill for EWR, there’s no clear sign that these two elite institutions, whose prestige and growth will be amplified by the project, plan to contribute.

The UK has mechanisms to involve private actors in funding public infrastructure, particularly when those actors stand to gain. Crossrail (now the Elizabeth line) was partially funded through a Business Rate Supplement (BRS), which taxed businesses that would benefit from improved connectivity. Another example is the Barking Riverside extension to the London Overground, where developers who gained from rising property values contributed to the project’s costs. Internationally, cities like Denver have successfully used Public-Private Partnerships (PPPs) to co-fund transit projects by offering private investors a share in the long-term revenue or commercial development opportunities. The question isn’t whether Oxford and Cambridge could help pay for EWR, but how.

A Business Rate Supplement could be applied, as it was for Crossrail. Oxford and Cambridge own substantial commercial real estate, from research parks to retail spaces. With better rail access, these assets will appreciate, and businesses within these university ecosystems will become even more valuable. A modest, temporary BRS on commercial property holdings could be a logical way for the universities to reinvest in infrastructure that directly benefits them. Of course, they might resist, arguing that they are academic institutions and charities, not businesses. But their influence in shaping regional economies and real estate markets (it could be argued) make them more like major corporate landowners than purely educational charities.

Another approach is Land Value Capture, which ensures that a portion of the increased property value from new transport links is reinvested into the infrastructure itself. Both universities own vast real estate portfolios, areas set to see a sharp rise in demand when EWR is completed. Capturing just a fraction of this value uplift could provide a sustainable funding stream for the railway. The main challenge is timing - property values rise over time, whereas EWR needs investment now. That said, mechanisms like tax increment financing could bridge this gap by allowing future gains to be used as collateral for immediate infrastructure investment. I imagine the challenge here is baselining and measurement, but surely there’s lessons learned in projects this has been applied that can be helpful to the EWR case.

If Oxford and Cambridge want more direct control, a Public-Private Partnership could be the answer. Universities could invest endowment funds into EWR in exchange for a stake in the commercial developments around stations, a share of ticket revenues, or long-term lease agreements on university-affiliated facilities built near new transport hubs. This model has worked in the U.S., where transit-oriented development has been co-funded by private sector players. The challenge is convincing university endowment managers that rail infrastructure is an attractive investment, given their preference for diversified, low-risk assets. But if they’re willing to fund innovation districts and student housing, why not a rail link that strengthens the entire ecosystem that fuels their success?

Then there’s the most direct option: Oxford and Cambridge could simply invest in EWR as an infrastructure asset. The universities already invest in property, venture funds, and long-term research projects. A strategic commitment to fund part of the railway, either as a philanthropic contribution or an investment with a long-term return, would be an opportunity to align their institutional mission with regional economic growth. There’s precedent for this - Manchester University has invested heavily in its surrounding infrastructure, creating an innovation district with long-term benefits for both the institution and the local economy. Btw, so have Oxford and Cambridge in their own surrounding areas - so there’s a precedent for development through direct investment. The biggest barrier here is political: universities might be reluctant to set a precedent for using endowment funds on public projects. But at a certain point, refusing to contribute to a project that will so clearly benefit them begins to look like negligence rather than financial prudence.

Among these options, direct investment as an infrastructure asset, Land Value Capture and Public-Private Partnerships seem the most viable. They align university finances with the success of EWR while mitigating direct taxation or politically risky capital outlays. If Oxford and Cambridge truly believe in the power of connectivity, research collaboration, and economic growth, then putting their money into EWR isn’t just a logical step - it’s betting on themselves. For two institutions that pride themselves on being at the forefront of innovation, it’s time to stop waiting for the public to pay and start investing in the infrastructure that will define the next stage of their own success.

I’d welcome thoughts on this as I am still learning how these mechanism work in theory - any notes welcome or resources on public finance mechanisms for projects like EWR that can help expedite the completion of the line to unlock the flywheel.

Britain can build, together.