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Cancelled HS2 land purchases cost £564M

DfT urged to halt loss making sale of land bought for northern section 
By Thomas Johnson

The Department for Transport (DfT) has spent £564M on land and property for High Speed 2’s (HS2’s) now cancelled Phase 2 according to figures released after a Freedom of Information request from NCE.

Rail engineers have urged the government to halt plans to sell these assets at a loss.

The industry wants planned routes to remain protected

In October prime minister Rishi Sunak confirmed that he was ordering the cancellation of “the rest of the HS2 project”. This meant that preparatory work for the high speed line north of Birmingham – to Manchester and the East Midlands – was to halt immediately.

Phase 2a of the project was to run from Birmingham to Crewe with Phase 2b linking Crewe and Manchester. A separate phase 2b leg was to run from Birmingham to Leeds. Project promoter HS2 Ltd had bought land and property at an elevated cost to safeguard these routes.

The DfT said that as of September 2023, it bought 954 properties for phase two.

The spend was as follows:

• Phase 2a Birmingham to Crewe – £208M for 239 properties;
• Phase 2b Crewe to Manchester – £196M for 185 properties
• Phase 2b Birmingham to Leeds – £160M for 530 properties.

The DfT has also halted the process of buying land for Phase 2a between West Midlands and Crewe.

Shortly after Sunak’s announcement, the DfT announced that safeguards to the route in Cheshire, Derbyshire, Lancashire, Leicestershire, Nottinghamshire, Staffordshire, Warwickshire and Yorkshire will be lifted “at the earliest opportunity”. This will make land available for non-HS2 developments. Transport secretary Mark Harper later spread the word among MPs that land purchased between Birmingham and Crewe would have safeguards removed “within weeks”.

Much of the land purchased between Birmingham and Crewe is agricultural and calculations using Savills’ rural land values index show that its sale would only yield £26M at market price. High Speed Rail Group estimates that sale of buildings and other infrastructure on the Phase 2a route would “optimistically” raise another £75M, bringing the total to £101M. This would mean a loss of more than £100M of taxpayers’ money on Phase 2a alone.

“Land sales simply should not proceed until there has been a full analysis and a full consultation with stakeholders,” said a spokesperson for pro-High Speed 2 lobbyist High Speed Rail Group. “Smart countries keep their options open for the future,” they added.

Speaking in a Commons transport select committee session on 8 November, former Strategic Rail Authority chairman and chief executive Richard Bowker said he believed the DfT had not acquired all the land it needed for Phase 2. He further demanded the DfT put a “robust” scheme in place for the land.

At the select committee meeting HS2 Ltd strategic technical advisor Andrew McNaughton and former Crossrail managing director Richard Morris, said it is vital the land is not sold and that it should remain safeguarded.

Failure to do so would mean that a future government would have to repurchase the land if ministers revived plans for Phase 2.

After Sunak’s announcement, rail engineer and writer Gareth Dennis told NCE that “the firesale of land, reversal of safeguarding and hobbling of Euston to prevent their dismal decision being reversed is nothing short of deliberate, desperate vandalism”.

Dennis went on to say that Sunak’s actions amounted to “the sale of our children’s future”, adding that “crippling rail lines through the UK’s biggest cities outside of London with increasingly competing rail services will cause the ossification of our economy for half a century”.

The DfT has been contacted for comment.