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Labour must battle local scepticism and secure private cash to deliver a King’s Cross-style renaissance
Labour’s decision to take the High Speed 2 rail route through to London Euston station may make sense from a transport perspective.
But in pledging to finance the £6bn project through an injection of private money tied to the redevelopment of the wider area, the Government has set itself a daunting challenge.
Rishi Sunak tried and failed to raise funding through private channels after declaring last October that Euston’s makeover would no longer be bankrolled by the taxpayer, even after dangling the prospect of 10,000 new homes in an effort to boost the site’s appeal.
Sceptics say that at 60 acres, the footprint of Euston is ultimately too small to attract the levels of investment being sought, with scope for development limited to the area immediately above the existing station, together with a handful of side streets.
That’s in contrast to nearby King’s Cross, once notorious for crime, urban decay and prostitution, but now the poster child for UK station renewal, where a far larger area of sprawling former railway yards and brownfield plots were picked for construction.
Local people told The Telegraph they’d be glad to see an end to the disruption that has blighted Euston since the first clearance work for HS2 kicked off in 2018.
However, one 45-year-old resident, whose council flat is just yards from the wasteland that’s set to host the new station, said she had little faith in Labour’s ability to see the project through.
Josephine, who asked for her full name not to be used in order to protect her privacy, said: “All the money they have spent and it’s done nothing for us. And I don’t know if it’ll cost twice as much as it has already.
“People are unhappy here. Day and night there’s disruption. It’s like a huge black hole.”
Planning constraints – including a longstanding requirement to maintain clear views from Primrose Hill to the Houses of Parliament and St Paul’s Cathedral – appear to rule out the wholesale construction of high-rise blocks which might otherwise have proved lucrative.
One senior figure at a major developer said going ahead with the tunnelling to Euston, as announced in Rachel Reeves’s Budget, is simply the “least bad option”.
They added that the Government had little choice, given that the alternative would have been to “leave a hole in the ground” for several decades.
The executive, who has led some of London’s biggest regeneration projects, said it was unrealistic to expect a rush of investment into the area, particularly given HS2’s record of policy reversals and ballooning costs.
He also warned that the Government may ultimately need to fund much of the project from the public purse.
He said: “It’s tough. It’s big money, big decisions – and there’s just so much scepticism from the history of the project.
“Developers will wait and see what happens with planning policies, decisions about the amount of housing, whether there’s subsidies. To get any private sector commitment before it is almost finished is going to be very, very difficult.
“The point where people know Euston is going to be ready – in 18 months, say – is when a government should go, ‘Right, who’s interested in this amazing opportunity?’”
Al Watson, head of planning at City law firm Taylor Wessing, said that while Euston has value as one of the last major London stations to be redeveloped, there is still a risk the renewal project could be targeted by local Nimbys.
That is despite Euston’s distinct lack of heritage value, particularly since it was rebuilt in the 1960s after its 1837 Doric arch was demolished.
Watson said ministers may have to resort to offering plots on the site at a level below “best value” in order to stimulate interest, something the Treasury would need to sanction.
That’s a far cry from the optimistic tone struck by Reeves last month, when she announced the release of funds to enable the construction of a five-mile tunnel to Euston from HS2’s initial terminus at Old Oak Common in west London.
The Chancellor said in the Budget that the move meant Labour was “catalysing private investment into the station and local area”.
Her words hinted at a transformation akin to that seen at King’s Cross, now home to gleaming edifices including Google’s 1,000 foot-long “landscraper”, the commercial HQ of AstraZeneca and even a new university.
Yet the senior industry source said that replicating the success of King’s Cross and its much-vaunted Knowledge Quarter was an unrealistic aim.
He said: “The value and the attractiveness of Euston can never be compared to something like King’s Cross.
“At King’s Cross, you had the ability to create a really amazing place. Euston is more challenged physically. It’s a smaller site and you’re building on a concrete deck.”
Having resolved to extend HS2 to Euston, the next big decision facing Labour is whether to bow to mounting pressure to overturn Sunak’s decision to terminate the line in the Midlands or extend it to Manchester as originally planned.
Louise Haigh, the Transport Secretary, said this week that the Government was considering endorsing proposals for the route made by Andy Burnham, the Greater Manchester Mayor. But this decision would require a bigger station at Euston, and with it a bigger bill.
The National Audit Office said last year that the price for a 10-platform HS2 terminus had jumped to £4.8bn, almost double the 2020 estimate, not including about £1bn for tunnelling.
Sunak later revised the blueprint to just six platforms, a step that the former Tory government suggested would shave £6.5bn from the overall cost of the high-speed network.
The figure was based on the assumption that private funding would flood in, when in fact little progress was thought to have been made by the time of the election.
The Department for Transport (DfT) said it was working with partners to develop an affordable plan for Euston, including a station design.
It didn’t reveal whether the 10-platform plan, which includes the extension of Euston Tube station to Euston Square, was back in the running, as details will not be set out until the Government’s spending review is published in spring.
A DfT spokesman said: “Taking HS2 to Euston is a key part of realising HS2’s growth benefits. We are working at pace to explore a range of options for Euston, including funding.”
Jackie Sadek, who hopes the regeneration of Euston will create a life sciences hub as part of the UK Innovation Corridor initiative, which she chairs, said the lack of clarity is “frustrating” and risks constraining growth.
Construction firm Mace said it was still contracted to build the HS2 station in a venture with Dragados of Spain, with which it worked on the redevelopment of Battersea Power Station and Birmingham New Street station.
Lendlease also remains the master developer on the wider project.
Andrea Ruckstuhl, the chief executive of the company’s European arm, said Euston presents “a once-in-a-generation opportunity to deliver improvements for the local community while also generating significant value for the UK economy.”
Outline plans include a park and play area to be built above the existing station, which will continue to serve the North via the West Coast main line, alongside shops and cafes, though it is not clear whether revisions will be made now that private backing is being sought.
Complicating matters, Transport for London (TfL) is understood to be pressing for facilities including a bus station, which would serve people arriving in the capital at King’s Cross and St Pancras, as well as Euston, while other calls for land include a taxi rank.
Oversight of the wider Euston estate currently rests with the Euston Partnership, comprising HS2 Ltd, Lendlease, Network Rail and Avanti, which is due to run trains on the line, as well as the DfT, Camden Council, the Greater London Authority and TfL.
In stripping HS2 of responsibility for Euston, the former Tory government said it would establish a Development Corporation to take charge of the project, though a report published in July said that could take years.
In the meantime, Reeves has appointed Bek Seeley, a former Lendlease executive, to lead a housing delivery group for the area.
A source previously involved in Euston’s planning said Seeley may have been engaged to help accelerate the development of discrete plots on the fringes of the site in order to get the project moving and stimulate interest.
However, John Wilkinson, chief operating officer at Bam UK, part of a partnership responsible for viaducts, tunnels and bridges on a 50-mile stretch of HS2 north of the Chilterns, said the green light for the development may have come too late for some companies.
He said: “We were very much looking at some opportunity around Euston, maybe two years ago, but we pulled away from that.
“Now all of a sudden it’s coming back. In the meantime, we’ve gone ‘right, we need to divert and focus on different areas’. But I dare say somebody out there will show an interest.”