Landowners and businesses affected by first phase of HS2 receive £1.6bn in compensation

Alexandra Rogers
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The overall cost of HS2 is expected to come in at about £56bn (Source: Getty)

Compensation for landowners and businesses that have been affected by the development of the first phase of HS2 has reached £1.6bn.

The amount was spent over a seven-year period from 2011/12 until this financial year for phase one of the high speed rail project, which will link London to the West Midlands.

The figure was released after Labour peer Lord Berkeley asked a written question on how much the Department for Transport (DfT) and HS2 had spent on phase-one related compensation claims.

Read more: Labour peer warns costs of first phase of HS2 could double DfT's budget

Baroness Sugg, the aviation minister and undersecretary of state for transport, said the £1.6bn figure formed part of the overall cost estimate for the first phase of the project, which currently stands at £24.1bn.

It is understood the £1.6bn figure is in line with expectations and that neither the DfT nor HS2 has had to pay more in compensation that expected.

However, Sugg would not reveal how much was paid by each department or the total property costs as it may affect claims for settlements for property acquisitions.

The overall cost of HS2 is expected to come in at about £56bn, up from an initial cost of £32.7bn in 2010.

Berkeley, who has taken an interest in the project, has long disputed the department's estimates.

He wrote to the transport secretary Chris Grayling in March to warn that a "lack of detail" over the expense of the first phase of HS2 and a "marked unwillingness from ministers and officials to engage in discussions about costs" could mean it costs double what the department has estimated.

In his letter to Grayling, Berkeley said HS2 did not challenge estimations put forward by Michael Byng of the Stop HS2 campaign, whom he called an "acknowledged expert on railway costs".

Byng puts the costs of phase one at £51.25bn - double the DfT's estimate - and not far off the costs for the entire project. HS2 has said it does not recognise Byng's analysis and that it still puts phase one costs at £24.1bn.

HS2 has long attracted its critics, with the TaxPayers Alliance warning that costs could top £90bn if the high-speed rail project follows in the footsteps of other government-managed, large infrastructure projects.

The thinktank said taxpayers should "take no comfort" in government insistence that HS2 will be delivered on budget, given an "appalling track record".

Read more: HS2 kicks off hunt for firms to work on £2bn worth of contracts

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