HS2 Turmoil, But Birmingham Shrugs As £200M Curzon Street Resi Funding Deal Agreed
Cabinet ministers contradicted themselves about the future of the HS2 high speed train line north of Birmingham in interviews that call into doubt property market assumptions about the infrastructure project.
The latest political gyrations come after four years in which the future of HS2 has regularly been in doubt. The upside for Birmingham real estate is that Phase 1 — the line from London to Birmingham — is already too far down the line to be scrapped.
The future of Birmingham's Curzon Street area, where the HS2 line will meet the city centre, is not in question. On Wednesday it was revealed that Court Collaboration has agreed a £200M deal with Pension Insurance Corporation to fund a 51-storey tower at One Eastside next to the station. The project involves 667 new apartments.
Gove said that capital spending would be cut as the government find ways to plug an estimated £50B spending gap.
“I am sure everything will be reviewed,” he said, noting that HS2 was a “significant investment,” The Guardian reported.
Newly installed Transport Secretary Mark Harper responded on Wednesday by saying that the government remained committed to delivering HS2 on time and on budget.
However, a Wednesday morning appearance before the House of Commons Transport Select Committee did not add to the sense of forward momentum.
MPs questioned senior officials on progress on Phase 1, the line from London to Birmingham. The first phase is now likely to exceed its £40.3B target agreed in 2019.
Inflation has helped push up the cost of HS2 Phase 1, which has grown by £1.9B. But there have also been self-inflicted wounds. Proposals to create a 10-platform Euston terminus were junked to save costs. However, the design work involved meant £105.6M was wasted. Further design costs are expected to push Euston costs up by another £200M, a government progress report revealed.
Legislation to allow the Birmingham to Crewe (Phase 2a) and Manchester (Phase 2b) of HS2 received a second reading in the House of Commons in July.
The Phase 2a budget remains unchanged, with a cost range of £5.2B-£7.2B. The government intends to set a target cost alongside publication of the full business case.
On Phase 2b Western Leg the financial case published in January 2022 presented an estimated cost range of £15B-£22B. Removal of the Golborne Link from the scope of the Phase 2b Western Leg Bill scheme has reduced the overall estimated cost range to £13B-£19B. Whilst the cost is likely to be weighted toward the next decade, it might still make a tempting target for ministers attempting to shave long-term public spending and limited government debt.