The estimated cost of buying land on the HS2 route has tripled in just six years to more than £3 billion, the spending watchdog revealed yesterday.
In 2012, the company building the high-speed line from London to Birmingham estimated it would cost £1.1 billion to buy land and properties along the route.
But by July this year, HS2 Ltd believed the total would be £3.3 billion – and the National Audit Office said the cost could soar yet further. The entire project is expected to cost £56 billion.
HS2 Ltd was also criticised for delays in giving residents the compensation they are due after land is compulsorily purchased.
The estimated cost of buying land on the HS2 route has tripled in just six years to more than £3 billion
Meg Hillier, chairman of the Commons public accounts committee, said: ‘High Speed 2 will affect thousands of property owners, leaseholders and tenants and HS2 Ltd is already letting people down by failing to pay compensation on time.
‘[It] needs to get a grip or there is a real danger of householders on the route and taxpayers not getting a good deal.’
In its report, the NAO said the estimated cost for HS2 Ltd to buy the land and property has ‘increased significantly’ since the start of the programme in 2009.
In addition to inflation, costs have increased due to changes to the route introduced by the Government while the HS2 Bill was going through Parliament. Other changes were made following public consultation, such as additional junctions and route changes which increased the amount of land and property that had to be bought.
Another factor was that HS2 Ltd had originally wanted to buy land on a 130-yard corridor along the route, involving the purchase of about nine square miles of land. Now it wants a wider corridor, involving the purchase of 27 square miles of land.
In 2012, the company building the high-speed line from London to Birmingham estimated it would cost £1.1 billion to buy land and properties along the route (pictured HS2 construction site in Middlesex)
The NAO said that despite the changes, HS2 Ltd believes costs will remain within the available funding. But it said significant uncertainty remained about what the final cost will be due to the potential for further changes to the scope of the programme, the number of property owners that will apply for compensation, and the final value of almost all of the properties that needed to be bought.
It added that HS2 Ltd predicted it will need to compensate up to 10,000 affected individuals and businesses, and process up to 50,000 compulsory purchase notices between 2017 and 2022.
The watchdog’s investigation found that HS2 Ltd needs to do more work to help claimants receive timely compensation. It has completed only half of advance payments within the required three months from when it receives a claim request.
A spokesman for HS2 Ltd said: ‘We welcome the NAO report which shows that HS2’s land acquisition programme remains on track. The overall cost of the land acquisition programme reflects changes to scope, land value and parliamentary amendments.
‘Much of this is as result of public consultation. The NAO highlight that this is normal for a programme of HS2’s scale and complexity.’