Background to the report
High Speed 2 (HS2) is a programme to construct a new high speed railway between London Euston, and Leeds and Manchester, splitting to form a Y-shape in the West Midlands.
This investigation is about acquiring land and property for Phase One (London to the West Midlands) of the programme, which is required to construct the railway between London and the West Midlands. HS2 Ltd is preparing its full and final business case for approval in 2019. Phase One is scheduled to open in 2026.
Content and scope of the report
The National Audit Office received correspondence concerned about HS2 Ltd’s land and property programme. They raised concerns with us that:
• HS2 Ltd had understated the property cost estimate, including in information provided to Parliament with deposit of the hybrid Bill for Phase One;
• governance and assurance around the estimate and the land and property function was weak and that HS2 Ltd did not have the capability or capacity to deliver the land and property acquisition programme; and
• HS2 Ltd was failing to make payments to landowners on time.
In response we investigated:
• how HS2 Ltd developed its estimate of the cost to acquire the land and property required to build Phase One of High Speed 2, and how it communicated this to Parliament;
• HS2 Ltd’s capability to produce robust estimates of the cost of land and property and to acquire the required land; and
• HS2 Ltd’s performance to date in acquiring land and property.
It is understandable that concerns have been raised with us about HS2 Ltd’s land and property acquisition programme given that it affects so many individuals and businesses. Although HS2 Ltd has made efforts to improve its land and property function since 2015, there is work to be done to support claimants to receive timely compensation where they are due an advance payment.
While HS2 Ltd’s estimate of the cost of land and property has increased significantly over time, cost estimates, particularly in this sort of major land acquisition programme, are inherently uncertain and subject to change as more information becomes known about both the design and operation of the railway, and the nature of the land and properties required. HS2 Ltd’s current estimate is within its agreed funding envelope from HM Treasury and provides a reasonable basis from which it can monitor the potential cost to compensate property owners and tenants affected by the construction of the railway. However, it is still very early in the property acquisition programme and too soon to determine with certainty what the final outturn will be.