Only two weeks have passed since the House of Lords Select Committee for HS2 (the Committee) concluded its hearings to consider the outstanding petitions. On 15 December 2016, it published its report containing a number of hard hitting recommendations[1] (the Report).

The Committee is clear that the nature of the proposal is controversial and it is under no illusion as to the strength of feeling generated. It has set out its clear view on the changes to the scheme that are needed to make it fairer to affected parties, while seeking not to derail it.

The HS2 Bill is likely to receive Royal Assent shortly, following its remaining stages in the House of Lords and consideration of Lords Amendments in the House of Commons. The Committee noted "(…) that this only represents the end of the beginning for this project."

The comprehensive Report addresses a number of areas and makes recommendations with those focused on impacts on landownership and compensation summarised below. The Committee also makes wider comments on the application of the statuary compensation code.

The Secretary of State's response will follow shortly. If the recommendations are adopted there could be impacts on the delivery of this and future phases; in particular impacts on the economics and treatment of affected parties.

A consultation on discretionary property schemes is planned for subsequent phases and what is proposed may need to change in light of today's report.

Petitioning and Hybrid Bill process The Report also considered the number of petitions 

The Report also considered the number of petitions received and heard, as well as the volume of paperwork and the number of assurances offered.

As part of the petitioning process the promoter challenged the locus (validity) of more than half of the over 800 petitions. The Committee had considerable sympathy with the petitioners because the documentation provided by the promoter explaining the reasons for the challenge was "arcane, opaque and unhelpful". This however is all part of a legislative process where reform is necessary.

A consultation on reform to the petitioning process is currently underway. The Committee observed that it had encountered difficulties with the current procedure; the petitioners found the process cryptic, complex to understand and labyrinthine to navigate. It stated that they "sincerely hope to have been the last Select Committee to operate under the current procedure".

We agree with this assessment based on our experience of advising a number of petitioners on the process in both Houses.

Resolution and Mitigation – Assurances and Undertakings

The Committee was proactive to ensure that the promoter offered assurances, especially where these were not being progressed as diligently as they ought to have been. Some 2,400 assurances have been offered by the promoter. These cover a number of areas including mitigation, accommodation works and principles of continued working especially on detailed design.

The Register of Undertakings and Assurances details all commitments offered throughout the parliamentary proceedings of the HS2 Bill; recording in a single document all the individual undertakings and assurances given to petitioners and to Parliament.

Once appointed the nominated undertaker, Secretary of State and all others exercising the powers will be required to comply.

Engagement

The Committee state that it will be imperative that the promoter engages effectively with all interested parties to ensure that, as far as possible, disruption and inconvenience are kept to a minimum. Acknowledging it as a significant task, the Committee could not stress enough the importance of effective and timely public engagement. This it noted was something which, it had been repeatedly told, could be improved upon by the promoter.

We experienced late engagement, or in fact no engagement at all prior to the publication of Additional Provisions introducing new or additional impacts when advising petitioners.

Key recommendations 

In addition to a number of site specific points of localised impact, there are a number of more wide ranging recommendations with the potential to affect the scheme and future phases if adopted.

Wider regeneration – a controversial aspect of the HS2 Bill is if it would allow the Secretary of State to acquire land for wider regeneration unrelated to the scheme. The Committee recommends that this power is dropped as it is "undesirable and unnecessary". If accepted this will reduce the land to be acquired and could affect the economics of the delivery as HS2 would have been dependent in part on the future value generation to assist the economic case for the scheme.

Residential compensation – the Committee's view is that the Secretary of State’s non-statutory scheme does not currently strike a fair balance between urban and rural households. This is mainly because it is based on the promoter's incorrect assumption that it is inconvenience and disruption during the operational phase that is the sole or main grievance for those who live close to the line of route, but not so close as to have their homes compulsorily acquired, or be eligible for acquisition under the Express Purchase Scheme. There is also a significant construction phase of 10 years or more to be taken into account.

The Committee concludes that it is no longer acceptable for those affected to have to be subject to construction noise and for compensation to be solely limited or primarily restricted to permanent detriment once the construction phase is over and the project is in operation. This is because:

  • the construction works will be of an unprecedented scale in intensity and duration; and
  • impact of human rights – in the absence of a non-statutory scheme the statutory compensation code may fail to comply with Convention rights.

The Committee agrees with the House of Commons Select Committee that Camden is exceptional due to unprecedented disruption. But in its view the same principles apply to parts of Hillingdon and Birmingham if and wherever there is to be comparable disruption.

The consequences of this for Phase 1 would be that it would open up the ability for urban qualifying properties who would have only received noise insulation to be able to have the same rights as those in rural areas. This would include the voluntary purchase scheme and cash options.

Residential tenants who do not qualify for the other schemes should get in excess of the statutory sum of £5,800 payable to council tenants with an increased sum of £10,000 to reflect the noise and disruption if they do not relocate. A rough calculation for the additional 1,200 owner occupiers and 350 tenants that would be affected places the additional impact of this cost of between 230m-£350m based on some valuation assumptions. Whilst there is doubt as to whether this could be imposed (and the costs could be prohibitive) the Committee make a strong recommendation that a substantial concession to urban householders is made.

General compensation matters 

There are two distinct areas – statutory and non-statutory. On the statutory compensation code the Committee observe that the amendments to the code in the Neighbourhood Planning Bill, currently before Parliament, do not address the obscurity and inadequacy of the current code. This mirrors some of the debate in Parliament on the current code in that Bill[2].

There are various non-statutory schemes which HS2 have introduced and those include express purchase and voluntary purchase as well as payments linked to location. The entitlement always depends on location and the safeguarding process.

No further specific proposals are recommended save that publication of the decisions on the applications under the various schemes (with suitable redactions) are recommended to increase transparency and confidence in the schemes.

Next steps

The next step is for the Secretary of State to confirm when his response will be made. The next stages in the HS2 Bill process are planned for early 2017, prior to it achieving Royal Assent.

Contracts for preparatory works have already been awarded for works due to commence later next year.