With a national Labour Government in power for the first time in 14 years, Peter Hendy faces perhaps the most important political transition yet – the party vowing to return the whole rail industry to public ownership. And all this at a time when the transport supremo is turning his attention to the development potential of Network Rail.
Over a stellar five-decade career, Hendy has become transport royalty and survived numerous political changes. Chairing Network Rail since 2015, before that he was London Transport Commissioner for nine years working his way to the very top after joining London Transport as a graduate trainee in 1975. He was appointed Chair of the London Legacy Development Company by Sadiq Khan and awarded a life peerage by Prime Minister Boris Johnson.
Now, as Chair of Network Rail, a role he has held since 2015, Hendy is responsible for over 42,000 employees, 20,000 miles of track and eleven major stations in London, including all the major iconic mainline termini. It’s also a major landowner, although – as Hendy himself is quick to point out – “not as major as people sometimes think.”
But land in and around stations – particularly in major towns and cities – is something Network Rail does have. “These are naturally good places to build new housing and develop spaces for businesses because of their connectivity. With our land ownings, we’ve enormous potential to bring forward development on these kinds of sites,” says Hendy.
The parallels with Transport for London are obvious. TfL is also primarily a transport authority and a significant landowner in London, seeking in recent years to be more aggressive in bringing forward development. While creating new homes, jobs and skills, this also generates income which can be recycled back into the transport network. With his history with TfL, it’s little wonder Hendy is eager to bring the organisations closer together, and for Network Rail to learn from London’s experiences.
Hendy points to the combination of the London Mayor’s responsibility for TfL, his duty to publish a transport strategy and set the strategic planning framework through the London Plan as key ingredients behind the city’s success. “The transport strategy sets out the schemes London needs to deliver on in order to support the London Plan, and over the last two decades that’s been really powerful and one of the reasons why TfL has achieved so much,” he says. He lasers in on the direct link between transport investment and economic growth, adding “transport investment is key to making London work and creating jobs and building homes – essential to the economic development of the city – and not just about running trains.”
So Network Rail under Hendy is on a steep curve to catch up with London, but public money is tight, with government spending likely to be outside London. “Development,” Hendy says, “gives us the money to spend on passenger enhancements we otherwise wouldn’t have.” He’s of the view, however, that the Treasury is on board with plans for a development arm for Network Rail and “can’t believe any future Chancellor of the Exchequer won’t also be enthusiastic”. He may well get what he wants in the months ahead.
Hendy launches into a whistle stop tour through the plans for Network Rail’s big strategic sites in London. First up, it’s a look back at what’s been achieved at London Bridge. Evidently proud of the transformation that’s taken place at a previously dreary and overcrowded station, he praises how London Bridge “demonstrated very successfully how we can completely transform a major railway station and bring about large-scale development as a result.” The Shard is the most obvious sign of the private investment that’s flooded into the area in the last decade or so, but the pace shows no sign of slowing with a slew of big schemes in the pipeline just south of the station.
Next is Waterloo – one of the UK’s (and Europe’s) busiest stations. Hendy describes the joint transformation project with Lambeth Council and TfL as a “brilliant piece of work”, talking of the eight acres of space under the station waiting to be opened up for retail and logistics. “We’ve got a few bits of land around the station which could probably take development for businesses and jobs,” adds Hendy, “but the fact is the station cannot cope with future predictions of passenger numbers so we have to do something about it.”
He doesn’t pull his punches when it comes to Victoria, describing the station as “a bit grim” and “probably the worst in London.” Work started on a major plan for redeveloping the station four years ago, providing a good example of Network Rail’s new relationship with TfL – both are pooling their land in order to draw up a much bigger and coherent scheme. “We will be talking to the commercial property market to find partners to work with in 12 to 18 months’ time,” he adds, saying that it “won’t be one huge project, but rather a series of bite size chunks.” He’s not counting his chickens just yet, conscious of planning processes that need negotiating, but he’s confident they can “meet Westminster Council’s development plan needs on housing and jobs.”
Liverpool Street has proven trickier, with recent plans irking some of the most vocal conservation bodies. Hendy accepts it’s not “universally popular” but is confident that, with some changes, the City of London Corporation will be able to approve the plans. Without it, Liverpool Street will miss out on “half a billion pounds worth of passenger space enhancement and a much better station for our customers,” laying bare just how much improvements in central London rely on receipts generated from private development.
We then come to Euston, perhaps the thorniest problem of all. Terribly over-capacity even before the planned arrival of HS2, plans for the wider redevelopment of the station have been bogged down over recent years in the politics over the future of the country’s High Speed rail network. One good thing to come out of the decision to not build Phase 2 of HS2 was, according to Hendy, a realisation that “Euston would be a development-led project rather than just a railway project” with the government recognising that “recycling development receipts and maximising development was the best way to pay for as much of the station as possible.”
Progress has stalled and the station’s future will be determined by the new government and recently appointed Transport Secretary Louise Haigh. With the Prime Minister now also the local MP for Euston, and Camden Council’s leader a newly elected Member of Parliament, the issue will be a live one.
Hendy – who chairs the Euston Partnership made up of Network Rail, Camden Council, HS2, Department for Transport, GLA and TfL – has strong views on what needs to happen. “My own belief is that any future government will eventually agree to build the tunnels from Old Oak Common to Euston because the whole project is difficult without it,” he says, before adding “and to proceed gives us the opportunity to redevelop the whole of Euston and create one coherent station, which we didn’t have with previous schemes.” He is also supportive of plans for the creation of a development corporation at Euston, which as a model he believes is well placed for large-scale regeneration through the combination of land ownership, planning powers and access to funding, adding “it means you can get regeneration done faster.” With the new Government publicly intent on speeding up planning decisions even if that means overriding local opposition, the development corporation model may well look attractive for Euston.
Labour has also pledged to press ahead with the recommendation of the William-Shapps Plan for Rail to transform Network Rail into a new entity, Great British Railways, which will be responsible for the day-to-day operational delivery of the railways and modelled on the operations of TfL. Hendy supports the principle that Great British Railways should “own, operate and run the railways” adding that “we certainly need reform.”
