Funding restrictions hamper Euston redesign

HS2’s ambitions for the comprehensive redevelopment of Euston station in London are being hampered by Treasury restrictions on Network Rail’s ability to source development funding, Building has learned.

According to minutes of a Euston Community Round Table meeting held earlier this year and released under the Freedom of Information Act, rules affecting the lending status of Network Rail imposed last September after it returned to public ownership mean wholescale redevelopment of Euston station has become “unaffordable”.

At the meeting, HS2 admitted that an unforeseen consequence of Network Rail becoming a public body has been restrictions to the way it can raise capital for development, meaning a bigger scheme at Euston could not be brought forward.

Speaking at the discussion, HS2 and Network Rail’s joint development director for Euston, who was named only as RW in the minutes, but is believed to be Rupert Walker, said: “A bigger scheme at Euston could not be brought forward so work stopped on this and a new joint team was put together to look at Euston and revisit key aspects of the scheme.

“Under Treasury rules, subsequent development funding cannot be relied upon to pay for a project.”

When asked by a member of the committee if restrictions in development funding was an unforeseen consequence [of returning to public ownership] Walker replied that they had “put it very nicely”.

Network Rail’s debt, which is set to reach £40bn by 2019, is now on the public books after Network Rail was reclassified as a government body in the public sector last September.

HS2 has ruled out building a new station within the existing footprint and has returned to what has been referred to as a new high speed terminus alongside the existing station, which is known as “Option 8” in the revised design for the project.

According to the plans, if a new station is built alongside the existing Eustion station, the residential block Regent’s Park Estate would be demolished. This outcome had previously been considered by the Euston Area Plan drawn up by Camden council as “the option which caused greatest damage to the local area whilst offering least in terms of economic regeneration and community benefit”.