National Audit Office report shows HS2 property cost estimate has trebled.

Today, the National Audit Office has published a report into HS2 buying land and property on Phase 1 of HS2, which has found the estimate has almost trebled since 2012. The NAO report states:

“In 2012, HS2 Ltd estimated that the acquisition programme would cost £1,120 million (2011 prices). HS2 Ltd provided cost estimates to Parliament as required, and by the time the hybrid Bill for Phase One was sent to Parliament in 2013 this estimate had increased to £1,608 million (2011 prices). The most recent estimate in 2017 was £3,295 million (2015 prices).”

Whilst HS2 Ltd claim that one of the reasons costs have increased is due to changes made to the route, they have neglected to mention that during that period they added over six miles of tunnels, the vast majority of which were in London, meaning that the overall effect of changes to the route should have actually reduced the cost of the project.

The NAO investigation also found that half of property owners asking for advance payments had still received no compensation whatsoever from HS2 Ltd within the legally required three months. However, as far as HS2 Ltd are concerned, in 35 of the 52 cases where payment overdue, it is the fault of the property owner for not providing the information HS2 Ltd have asked for quickly enough.

The NAO had been asked to look into this issue by the Public Accounts Committee following accusations from whistle blowers over the summer. Doug Thornton, who had been HS2’s director of land and property in 2015, said he had been dismissed after refusing to accept an estimate of costs which he said had been prepared by a property consultancy and “looked to have been arrived at through taking a very rudimentary estimate of land costs in 2009 and then crudely inflating as the years went by”, that HS2’s senior executives had “absolutely no idea” how many parcels of land needed to be bought, and that he had been asked to value roughly 11,000 sites in just a month before the budget was put before MPs.

Andrew Bruce, who had been head of planning and performance at HS2, was also dismissed in May 2016 shortly after pointing out that 5,458 of the 11,400 properties HS2 Ltd needed to buy had not been valued at all.

Stop HS2 Campaign Manager Joe Rukin responded:

“The fact that the cost of buying land is now set to be three times the original estimate has got to set some very loud alarm bells ringing, especially as adding tunnelling in London should have cut the cost. If HS2 Ltd can get it so spectacularly wrong on just one item of expenditure, then it is absolutely clear that no-one can trust any of their estimates. It is very worrying that this report is saying is that the original price HS2 Ltd gave to MPs was wrong, but it doesn’t matter because Parliament didn’t actually require that estimate to be based on any facts. Given that HS2 was originally mean to cost £33bn and we’re now up to £56bn, you have to think that stopping the project now is far more sensible than finding out just what the final bill will be.”

Penny Gaines, chair of Stop HS2, added:

“It’s appalling that HS2 Ltd are so late in paying people who are being ousted from their properties to make way for this pointless railway.  There are apparently 50,000 properties that need to be bought, but with just a handful done so far HS2 Ltd are not only late in paying many of them, but are blaming those being evicting for not being paid.” 

 “This is a far cry from Government promises early on. Since 2012, government ministers have been saying that HS2 Ltd will get better with community engagement. And yet we are now in a situation, where not only are HS2 failing to communicate with people who might be affected by HS2, they are failing to pay people who, through no fault of their own are having to move out of the way.  It should be pointed out that HS2 Ltd is wholly owned by government, and HS2 Ltd seem to have no compunction whatsoever with treating people like dirt.”