More than 40% of compulsory purchase payments HS2 has made to freeholders have been paid late, EG can reveal.
HS2 Ltd, the company building the high-speed line, has seized a total of 361 freehold interests between February 2017 (when it was granted compulsory purchase powers by the secretary of state) and 1 July 2019, according to data obtained by EG via a Freedom of Information request.
During this period, 257 advance payments were made by HS2 to claimants. But more than 40% (105) of these payments were paid after the three-month deadline.
When an advance payment is requested, HS2 is required to pay claimants 90% of HS2’s own valuation of the property within three months of the request, or at the point at which HS2 seizes possession of the land, whichever is later.
Explaining why advance payments were paid late, HS2 said 81% of these cases were delayed because owners did not provide the “required information in a timely manner”.
For the remaining 19% of cases of late payments, HS2 has claimed responsibility, stating these cases were delayed due to “HS2 internal governance delays and supplier delays”.
However, Ali Yazdi, founder and chief executive of takeaway chain Tops Pizza, questioned HS2’s claim that owners were the main reason for delayed payments.
Yazdi, who had his circa 6,000 sq ft warehouse in west London seized by HS2, claimed he provided enough information for HS2 to make an advance payment but failed to receive it in the allotted time.
“I don’t think this point is quite valid,” he said. “We had a lot of help from a logistics company which ensured we put everything together, yet HS2 kept going back and forth and stalling before we managed to receive the advance payment.”
A spokesman for HS2 Ltd said: “HS2 endeavours to pay claimants fair and timely compensation. The legal process puts the onus on affected parties to submit evidence-based claims for their losses and HS2 can only pay compensation once sufficient information is provided.
“We encourage people affected by compulsory purchase to take professional advice early to support their claims. The reasonable costs of such advisers are paid for by HS2 Ltd.”
Cause for concern
Several other industry players have raised concerns about HS2’s CPO process.
CLA rural surveyor John Greenshields, who has a history of dealing with HS2 CPOs from Oxford to Hillingdon, said: “HS2 has defended itself by stating that 81% of those late payments were due to landowners not providing information in a timely manner.
“However, landowners are being provided with generic and late information by HS2, which creates uncertainty, resulting in both emotional and financial costs.”
Experts have also raised concerns that HS2 is undervaluing some properties in making advance payments.
In a BBC Panorama investigation into HS2’s spiralling budget, property owners accused HS2 of undervaluing their land. Former HS2 land and property director Doug Thornton also spoke out against his previous employer, claiming HS2 had underestimated the cost of its property acquisition programme, stating: “There was a gap of almost 100 per cent in terms of the numbers – wrong numbers of properties that the organisation had not budgeted for.”
David Baker, partner at UK consultancy Baker Rose, represents a number of landlords affected by HS2’s CPO programme. He said: “A large part of the problem is systemic. The fundamental problem is people and businesses are being dispossessed and then, eventually, repaid some if not all of their consequential losses. The arguments and pain between the two events can be serious, expensive and sometimes terminal.”
He also highlighted the lack of any penalties in place for late advance payments made by HS2. Currently, there is no penalty for late advance payments by HS2 or any other acquiring authority using CPOs.
“To exacerbate matters, the only penalties for miscalling the value of a claim is on the affected party,” he said. “There are none yet for the acquiring authority, even if the argument ends in the Lands Chamber.
“This has to change, not least as it is poisoning the public attitude towards vital infrastructure investments that need to use CPO powers.”