Station development and its surrounding areas present an opportunity to benefit passengers, the public sector and the private sector. We brought together experts from across the industry to delve into the challenges and opportunities in this domain, focusing on two key questions:
- How to attract investment?
- How to navigate the competing goals across public sector entities?
Helping the private sector engage
Our conversation highlighted a strong interest from the private sector in participating in station development, both from a funding and delivery standpoint. However, uncertainty remains in how to work most effectively with and across the public sector. This typically stems from conflicting goals in planning, funding and design.
Establishing a clear vision from the outset is important. This helps provide certainty to the private sector while incorporating flexibility into the design and outputs as the programme progresses and more information emerges. There's also a need for integrated transport strategies, ensuring alignment with wider local and national goals.
Having an honest conversation around how benefits are shared and risks managed would then drive appropriate discussions regarding funding, financing and control. This must include a careful narrative that addresses core public concerns – reliability and affordability of the service and development – while considering who the long-term beneficiaries of these approaches are.
Alternative methods of generating income beyond land value also need to be explored, including innovative solutions.
Opportunities to contribute value
While the development opportunities are contingent on site and location, we highlighted the significance of offering investors the chance to contribute value to these impactful projects. Key to this is a shared value approach, blending public and private sector contributions to maximise returns and align objectives. This should include resisting short-term ‘family silver’ sales of assets in favour of strategies that attract more sustainable global and domestic investment.
For instance, Kent was highlighted as a key area where political influence and demand for affordable housing around stations could create significant opportunities. Real estate potential offers one avenue, but relying solely on land value capture (LVC) is insufficient and hence further ideas are needed.
Critical to this is a shared vision. This ensures consistency of approach, allowing the private sector to support these ambitions where a long-term consistent commitment to strategic objectives is made. To manage the shifting political landscape, a focus on robust governance structures and flexible long-term planning is critical. In particular, central government guarantees and multi-year funding settlements can provide the stability needed to attract investment.
Sustainable income streams over short-term gains
We emphasised the importance of balancing outcomes and avoiding perfection becoming the enemy of progress. Encouraging the public sector to adopt a long-term view and focus on sustainable income streams rather than short-term gains emerged as a critical consideration.
In this context, we discussed the adoption of standardised 'on-brand' approaches for station types – aligned with Treasury guidance and accountability mechanisms – as a way to streamline efforts and ensure clarity for all stakeholders. Developing standardised overarching plans or categorisation frameworks for station types could streamline decision-making, while also offering a replicable approach that balances innovation with practicality.
Key takeaways from the discussion
Looking ahead, we identified three steps as calls to action around station development:
1 Vision
Having a clear, easy-to-understand, overarching vision from the public sector, supplemented by early engagement and ongoing collaboration with the private sector.
2 Funding and financing
Exploring innovative funding solutions to raise finance, alongside enhanced access to grant funding from central government, to unlock shared value across all stakeholders.
3 Delivery
Aligning the delivery model to the risk profile and financial contributions made by the participants. This will influence the level of control a stakeholder has, with the need to explore and utilise wider governance mechanisms to deliver on the agreed public sector vision.
By implementing these steps, we aim to enhance the approach to station development and pave the way for impactful, sustainable outcomes.
For more insight and guidance, get in touch with Alex Springall.
