HS2 – what is the future of the scheme?

Uncertainty, misinformation and political unrest are not a new phenomenon within the United Kingdom.

However, we are currently passing through particularly turbulent and uncertain times and the future of HS2 is contributing to this.

This project has been inherited by three conservative prime ministers and four different conservative/ coalition governments, after it was originally devised by a Labour government back in 2009.

The outlook, the timescale and the details surrounding this huge infrastructure project have varied considerably through each government and its viability as well as the actual cost of the project become increasingly uncertain.

HS2 (High Speed Two) is being developed by HS2 Ltd, an executive non-departmental public body, sponsored by the Department for Transport. The goal of HS2 was to serve over 25 stations connecting around 30 million people (almost half the population) and become the backbone of our rail network (HS2, 2019). It was supposed to spread the wealth of London, employ 30,000 people and be a catalyst for economic growth. The original budget for the entire project was £56 billion. Construction started back in 2017, mainly at the new stations situated at Euston and Old Oak Common in London, and more recently extensive ground preparation works have been taking place in Birmingham. Recently, uncertainty surrounding this substantial project has been growing, with many outside and within the government now calling for the project to be axed.

Prime Minister Boris Johnson has not stated that the scheme will be scrapped, but a review is underway with the results expected in the autumn and he has expressed “anxieties about the business case”, whilst speaking when running for the position of Conservative Party leader in July 2019 (BBC, 20191). However, the future of this project has been thrown into further uncertainty, by a number of statements and declarations from the relatively new Conservative government. This is a consequence of the HS2 Chairman’s stocktake report which was published in August, stating that the budget and target schedule for the programme have proved unrealistic. The original plans did not take sufficient account of the compound effect of building a high-speed line through a more densely populated country with more difficult topography than elsewhere and doing so whilst complying with higher environmental standards (gov.uk, 2019). In addition, the Chairman, Allan Cook, wrote to the Department for Transport (DfT) to voice his concerns that HS2 cannot be delivered for the original budget of £56 million, in July (Ft.com2, 2019).

Estimates for the actual potential costs vary considerably. In his letter to the DfT, Mr Cooke reportedly warned that a potential overspend of £30 billion is not unlikely (BBC News, 20192). Furthermore, several Conservative MPs have come out and claimed that the project could cost more than £100 billion (Ing, 2019). Lord Andrew Adonis the self-proclaimed “architect of HS2” admitted on LBC, on the 1st of September 2019, that he does not know how much it will cost but it will be high. He also admitted that the project has been mismanaged. To add further doubt to the HS2 project, two days later, on the 3rd of September, Grant Shapps, the Secretary of State for Transport, confirmed the project could be delayed by up to five years. So, the future of this huge infrastructure project is going to remain unknown until at least the Autumn when a full review is going to be submitted to the government with a “go or no-go” decision by the end of the year.

Work commencing at London Euston Station
HS2 Ltd stated in a letter to Lord Forsyth (the House of Lords Chairman of the Economic Affairs Committee) that £1.8 billion has already been spent on land and property purchases (HS2 Ltd, 2019). This included recently built homes and new developments along the proposed HS2 route (Paton, 2019). The £30m Shimmer estate, of 212 family homes, in Mexborough, South Yorkshire was completed in 2017. The residents received the news back in 2018 that 52 homes on the estate were set to be bulldozed along with eight on the nearby Doncaster Road only a few years after being completed (Doncasterfreepress.co.uk, 2019). Further, homeowners and businesses have reported compensation not paid on time (Ft.com 1) and compensation being low and below the market value (BBC News3).

The recent statements have given anti-HS2 protesters fuel for the fire, and real belief that this project will not be finished as planned. However, work has started, people have lost their homes and around £7.5bn has already been spent, including the works on Phase 1 which have already begun.

However Phase 2a, from Birmingham to Crewe, is currently near the end of its legislative process in Parliament and the legislation process for Phase 2b, from Manchester to Crewe, is due to begin in the near future. These plans were originally planned to be completed and amalgamated with Phase One and delivered to the same timescale. The government have admitted that costs for Phase 2a, from Birmingham to Crewe, and this section of the project are likely to rise (gov.uk, 2019) but after recent developments it is unknown whether any work on this section will ever take place.

Proposed map of HS2, taken from (Ft.com, 2019)
The statements, the conjecture and the figures surrounding this project do not help to answer the many unknowns and questions regarding HS2. It is clear that the project has not gone to plan. With everything hinging on the outcome of the HS2 review lead by Douglas Oakervee and his deputy, long-time opponent of HS2 Lord Berkeley, the prospects of HS2 hangs in the balance and, just like the political future of the UK, it is hard to predict and second guess. However, if you are a potential homeowner and worried about the prospect of HS2 or any other railway affecting the enjoyment of your property it is always wise to purchase a The Groundsure Energy and Transportation report. This report identifies large energy and transport projects within the vicinity of a property these include any large energy projects, Crossrail, the London Underground and any potential route for HS2.

Groundsure new and improved Homebuyers report includes an enhanced transportation summary which highlights detail on HS2, Crossrail 1 and Railways.

References

Assets.publishing.service.gov.uk. (2019). [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/828771/hs2-chairmans-stocktake.pdf [Accessed 4 Sep. 2019].

BBC News1. (2019). Beyond Brexit, what’s in the new PM’s in-tray?. [online] Available at: https://www.bbc.co.uk/news/uk-politics-48941691 [Accessed 4 Sep. 2019].

BBC News2. (2019). HS2 rail project cost ‘could rise by £30bn’. [online] Available at: https://www.bbc.co.uk/news/business-49048823 [Accessed 2 Sep. 2019].

BBC News3. (2019). HS2 buys properties worth £600m. [online] Available at: https://www.bbc.co.uk/news/uk-england-47881368 [Accessed 4 Sep. 2019].

Doncasterfreepress.co.uk. (2019). Fury after new HS2 report reveals ‘˜more Doncaster homes and green spaces’ are set for the bulldozer. [online] Available at: https://www.doncasterfreepress.co.uk/news/fury-after-new-hs2-report-reveals-more-doncaster-homes-and-green-spaces-are-set-for-the-bulldozer-469399 [Accessed 4 Sep. 2019].

Ft.com 1. (2019). HS2 criticised over slow payments for seized properties | Financial Times. [online] Available at: https://www.ft.com/content/251381dc-b736-11e8-b3ef-799c8613f4a1 [Accessed 4 Sep. 2019].

Ft.com2. (2019). HS2 cost overrun stretches to £30bn, review shows | Financial Times. [online] Available at: https://www.ft.com/content/27ab2f5c-a976-11e9-984c-fac8325aaa04 [Accessed 2 Sep. 2019].

Ft.com.3 (2019). HS2 cost concerns mar major contract awards | Financial Times. [online] Available at: https://www.ft.com/content/653c8dd2-6a37-11e7-bfeb-33fe0c5b7eaa [Accessed 27 Sep. 2019].

Gov.uk. (2019). [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/828771/hs2-chairmans-stocktake.pdf [Accessed 4 Sep. 2019].

High Speed 2. (2019). Why HS2 | High Speed 2. [online] Available at: https://www.hs2.org.uk/why/ [Accessed 9 Sep. 2019].

HS2. (2019). [online] Available at: https://www.parliament.uk/documents/lords-committees/economic-affairs/Letter%20Thurston%20to%20Chairman%207%20March%202019%20.pdf [Accessed 4 Sep. 2019].

Ing, W. (2019). Tory MPs claim HS2 will cost more than £100bn. [online] Building. Available at: https://www.building.co.uk/news/tory-mps-claim-hs2-will-cost-more-than-100bn/5100585.article [Accessed 9 Sep. 2019].

Paton, G. (2019). HS2 property acquisitions near £600m. [online] Thetimes.co.uk. Available at: https://www.thetimes.co.uk/article/welcome-to-midsomer-thame-c0wdf2c8g [Accessed 4 Sep. 2019].