The huge cost of the HS2 line that will never be built

Business

More than £232m has been paid out in compensation to people affected by the now-scrapped northern leg of HS2, Sky News can reveal.

Responses to our Freedom of Information requests show just shy of £550m has been spent so far on a range of government compensation schemes for both residents and businesses impacted by the planned route between London and Manchester.

But more than 40% of the pot went to land and property owners in phase two of the project – starting at Birmingham and heading north – which was cancelled by the Conservatives at their 2023 party conference and will never be built.

A total of 2,446 successful applications for pay outs have been made across five schemes, but 53 are still yet to be settled – 10 years after compensation was first made available.

And with a current average payment of £242,555 per application, the next government could be looking at a further bill of almost £13m to meet the commitments.


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A spokesperson for HS2 Ltd said the “vast majority” of the remaining transactions for phase two had now been “placed on hold” following the cancellation of the leg, adding: “In most cases we are now only continuing with purchases that started before October – if the owner wishes to proceed.

“In line with government policy, we’re now in the process of closing down the phase two programme in an orderly fashion, while being mindful of the needs of local communities and the taxpayer.”

More on Hs2

Sky News has contacted the Conservative Party for a response.

HS2 was first proposed under a Labour government in 2009 and adopted by the Conservative/Liberal Democrat coalition in 2010, with an expected price tag of £37.5bn.

But beset with delays and costs soaring north of £100bn, original plans began to be scaled back, and last year, the Conservative government announced it would be scrapping the line between Birmingham and Manchester entirely.

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Sunak: ‘I am cancelling HS2’

The decision was condemned by politicians on all sides – including the mayors of Birmingham and Manchester, who said they were treating people in the North and Midlands as “second class citizens”.

But ministers insisted the project no longer represented “value for money”, and the funding could be better spent on more localised transport plans.

What are the schemes – and how much has been paid?

There have been five compensation schemes in total for HS2.

The Express Purchase Scheme covers people whose whole house or 25% of their land falls into “safeguarded areas” – land HS2 plans or planned to build on – allowing them to sell their property to the government.

A total of 144 applications were accepted under this scheme, the majority of which – 136 – fell into phase two of the project.

But while the government has spent just over £900,000 settling four of the eight applications along the route for phase one, it has spent more than £34m on just 39 of the 136 settlements for phase two.

HS2 said 25 applications remained “active” or still to be paid out.

The Rural Support Zone Scheme sees those whose properties fall outside of the safeguarded area, but within 120m of the line, able to apply for either a cash offer or a voluntary purchase scheme from the government – with applications staying open until one year after the relevant phase of the railway is first open for public use.

The government has paid out almost £32m for 116 successful claims in phase one and close to £50m for 589 claims in phase two, but there are another 15 still to be settled.

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What has voting changed?

There was a further scheme for those whose property or 25% of their land fell within 300m of the line called the Homeowner Payment Scheme.

It gave one off payments to those in the zone, ranging from £7,000 for those at the furthest edge up to £24,000 for those closest to the 120m mark.

Close to £11.4m was given out across 834 claims covering phase one, while almost £1.7m was given out for 108 claims on phase two.

The Need to Sell Scheme was established for those who had a “compelling reason” to sell, such as losing their job and needing to relocate because of the line, while not falling within 300m of it.

A total of 199 applications were accepted for phase one and 189 for phase two, but while 332 of the applications have been paid out – costing over £181m for phase one and more than £85m for phase two – 13 are yet to complete.

The final compensation scheme was introduced in the earlier planning days of HS2 under the coalition government – the Exceptional Hardship Scheme.

This allowed homeowners and small businesses who could prove they had an urgent need to sell because their property value could be affected by the initial preferred route of HS2 to make a claim.

Of the 161 legitimate claims on phase one, 147 offers have been paid out, costing close to £91.7m.

All of the claims for the now defunct phase two have also been paid – a total of 97 at a cost of over £61.2m.

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