Recommendation 4

Developing Euston is dependent on attracting private finance to pay for it, but the Department does not yet have any plan for how to do so and has to make investment decisions soon to protect long-term value for money. Despite the intention to scale back the station itself compared with previous plans, redevelopment work at Euston remains a huge and complex project. Government has redirected £6.5 billion (in 2023 prices) of expenditure away from Euston, and the Department is now looking for private funding to cover the costs of the re-scoped Euston station and the over-site development. It is also considering ways the private sector might contribute towards the cost of tunnelling from Old Oak Common to Euston. The Department has previously had more modest proposals for private sector investment HS2 and Euston 7 at Euston rejected by HM Treasury due to the risks involved. The Department told us there is ‘in principle’ interest from the private sector, but that it needs to decide on the financing model. The Department does not yet have a plausible or detailed proposition it could take to the market and it is likely to take significant time to develop one. There are urgent decisions the Department must make on funding the tunnelling from Old Oak Common to Euston or it will incur much greater costs from stopping and restarting work. Recommendation 4: The Department should: a) Develop plans for a range of private investment scenarios, including different levels of public finance, as part of its consideration of how to progress with the station at Euston; and b) Decide soon how to proceed with the tunnelling from Old Oak Common to Euston to best protect value for the taxpayer.