High Speed Two (HS2) Ltd. Corporate plan to 2015/16 and Business plan

Transcription

1 High Speed Two (HS2) Ltd Corporate plan to 2015/16 and Business plan March 2013

2 High Speed Two (HS2) Ltd Corporate plan to 2015/16 and Business plan March 2013

3 Contents Glossary Introduction Strategic objectives... 7 Our strategic themes Achievements in 2012/ Background Programme achievements Judicial reviews Organisation and resources Wider corporate milestones Ongoing work programme Overview Phase One Phase Two Proposed expenditure Cost control and value for money Third party funding and revenues HS2 as an engine for growth Business plan for 2013/ Overview...20 Phase One...20 Phase Two Wider corporate initiatives... 23

4 6. Key performance targets to 2015/ Health and safety Organisation/people Quality Time Cost/Financial control Communication and engagement Property Annex A roles of HS2 Ltd Board and Executive Team Board Executive Team Annex B Overview of HS2 Ltd organisational structure Annex C HS2 Ltd indicative longer-term plan... 33

5 Glossary AONB BIM CIPD CoCP DfT EHS EIA ES FOI HS1 HS2 Ltd Hybrid Bill January 2012 announcement January 2013 announcement LEP LWM LMH NFU / CLA Area of outstanding natural beauty Building Information Modelling, a process involving the generation and management of digital representations of physical and functional characteristics of a facility. Chartered Institute of Personnel and Development Code of Construction Practice Department for Transport Exceptional Hardship Scheme a government scheme to assist property owners who are affected by the proposed route and have a pressing need to sell Environmental Impact Assessment Environmental Statement Freedom of Information High Speed One the existing high speed railway between London St Pancras and the Channel Tunnel (formerly known as the Channel Tunnel Rail Link) High Speed Two (HS2) Ltd the Government company set up to develop proposals for a new high speed rail line A Bill with characteristics of both a public Bill and a private Bill is called a hybrid Bill. Such Bills are examined in Parliament by a combination of both procedures. See: The announcement by the then Secretary of State in January 2012 of the Government s intention to proceed with the development of a new high speed rail network and to prepare and deposit with Parliament a hybrid Bill to secure parliamentary approval for Phase One of the HS2 programme. The announcement by the Secretary of State in January 2013 of the initial preferred route for Phase Two and plans for a public consultation on this. Local enterprise partnership London West Midlands Leeds Manchester Heathrow National Farmers Union / Country Land and Business Association HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 3 of 34

6 PSC Secretary of State Professional Services Contractor (mainly engineering designers or environmental specialists) Secretary of State for Transport HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 4 of 34

7 1. Introduction 1.1. High Speed Two (HS2) Ltd s Corporate Plan covers the three year planning period 2013/14 to 2015/16, incorporating the outcomes of the Government s Spending Round It includes a review of performance in 2012/13, sets out our key objectives and a high level delivery plan for the remainder of the three years to 2015/16; it incorporates our business plan for 2013/ HS2 Ltd was established by the Government in January 2009, to develop proposals for a new high speed rail line between London and the West Midlands; and to consider the case for high speed rail services linking London, northern England and Scotland We delivered a report to Ministers, High Speed Rail: London to the West Midlands and Beyond, at the end of This was published in March From February to July 2011, the Government held a public consultation on its proposed high speed rail strategy and the recommended route for an initial high speed line from London to the West Midlands In January 2012, the Secretary of State for Transport decided to proceed with plans to build a high speed rail line between London and the West Midlands (Phase One) and on to Manchester and Leeds (Phase Two). HS2 Ltd was given a remit to undertake work to support a hybrid Bill for the Phase One London to West Midlands section, provide a report on options for the Manchester and Leeds routes (Phase Two) and support future consultation on the routes In March 2012, we submitted our Phase Two options to the Secretary of State for Transport and, in January 2013, the new Secretary of State published details of his initial preferred route for Phase Two. HS2 Ltd has now launched a public consultation on the Phase Two route HS2 Ltd is overseen by a Board, whose directors are: Douglas Oakervee Chairman (non-executive) (appointed 1 April 2012) Alison Munro Chief Executive Sir Brian Briscoe (non-executive) Mike Welton (non-executive and Chair of the Audit Committee) Richard Brown (non-executive, appointed 1 July 2012) Duncan Sutherland (non-executive, appointed 1 July 2012) Beth West (executive, appointed 21 December 2012) Andrew McNaughton (executive, appointed 21 December 2012) HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 5 of 34

8 1.8. Day to day management of HS2 Ltd is vested in the Executive team which comprises: Alison Munro Chief Executive Beth West Commercial Director Andrew McNaughton Technical Director Roy Hill Phase One (London-West Midlands) Director Ian Jordan Phase Two (Leeds, Manchester & Heathrow) Director Clinton Leeks External & Parliamentary Relations Director Kieran Rix Finance & Corporate Services Director Roger Hargreaves Hybrid Bill Director (from 1 July 2013) 1.9. The roles of the Board and the Executive Team are provided in Annex A. More information on Board and Executive Team members is given on the HS2 Ltd website HS2 Ltd is sponsored and funded by grant from the Department for Transport. An overview of our current organisational structure is shown at Annex B The governance framework within which HS2 Ltd operates and its relationship with the Department for Transport is set out in the HS2 Ltd Framework Document HS2 Ltd is incorporated as a company limited by guarantee. The company has a single member, the Secretary of State for Transport. It is classified as an executive nondepartmental public body (NDPB) by the Cabinet Office and is treated as part of the central government sector by the Office for National Statistics Subject to parliamentary approval to Phase One of the scheme, (London to West Midlands), it is the Government s intention that HS2 Ltd should continue to manage the on-going activities necessary for the provision of the high speed rail network. To enable this, the company s constitutional framework and delegations 3 may be amended at an appropriate point The constitution is available from Companies House on payment of a fee. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 6 of 34

9 2. Strategic objectives 2.1. HS2 Ltd s current remit is set out in the Secretary of State for Transport s letter of 27 June The remit provides for HS2 Ltd to act in a delivery role on some aspects and in an advisory role on other aspects of the development of the high speed rail network and the core elements of our work, as set out in the remit letter, are as follows: Developing strategic themes designed to deliver the vision of HS2 as an Engine for Growth, which will contribute to local economic development and the supply chain, including: identifying and developing options for the development of land at and around the proposed station sites in partnership with local stakeholders; with respect to land owned by the DfT, advising on the level of commercial return that could be expected from developments offset by the additional scheme costs required to realise those opportunities; and working with local partners to negotiate funding contributions towards the cost of the development activities, the railway and/or ancillary works and agree with the DfT whether to accept them. Working with our suppliers, we will build a skilled workforce that fuels further economic growth across the UK Ensuring value for money and the wider economic benefits by delivering the project to time and budget whilst providing a benchmark for health, safety, security, environment, delivery / operational excellence and which is also designed around the needs of the passengers. Regeneration: engage with local partners on how station design and operation can best support regional development and master planning objectives, advising on options for meeting this objective with a clear view of budgetary and timing implications. Developing and delivering (in partnership with the DfT) a comprehensive communications and promotional strategy for HS2, building on Engine for Growth as the vision and aligned with the strategic themes. Undertaking further work and provide advice to enable the Department to deposit a hybrid Bill with Parliament in respect of the London to West Midlands line, including connections to HS1 and to the West Coast Main Line, and, subject to parliamentary approval, to secure powers for the scheme. 4 HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 7 of 34

10 Leading discussions with stakeholders regarding the above issues and (recognising that some stakeholders are expected to petition against aspects of the hybrid Bill) implement a petitioner management strategy. Efficiently acquire property that may be required for Phase One following the Secretary of State s announcement of safeguarding directions for the route and operate the discretionary compensation schemes including the Exceptional Hardship scheme on behalf of the Secretary of State. Develop the design of extensions of the route from north of Birmingham to Leeds, with a connection to the East Coast Main Line, and to Manchester, with a connection to the West Coast Main Line. Prepare materials and provide advice to develop and inform the public consultation on Phase Two, which was launched in July 2013, and conduct the consultation, the analysis of responses and report on the findings and further work in order to allow the Secretary of State to announce final decisions by the end of Undertake strategic work on the longer-term options for serving Scotland and the North East of England, as agreed from time to time with the DfT. Advise the DfT on costs, benefits and commercial issues, so that the business case for Phase One and for the whole Y-shaped network can be updated, with assurance that costs are well controlled. Take forward initial work on the train and systems operations for the railway once in operation. Work with DfT in developing options for the future delivery and operational model for HS2 Ltd HS2 Ltd contributes to the delivery of the Government s commitments on high speed rail and supports the Department for Transport s wider strategic aims and policies. It specifically contributes to the Department for Transport s Business Plan 5 priority to carry out the preparation needed to start construction of the first phase of a high speed rail network for Britain early in the next Parliament. OUR VALUES We have agreed a set of core values to which all those working on the programme must subscribe. These are based around the core themes of Safety, Respect, Leadership and Integrity. These values are incorporated into our performance management process for all staff and contractors. 5 HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 8 of 34

11 OUR PURPOSE HS2 creating a world-class high-speed rail network to support growth OUR VALUES Our behaviours support the HS2 values of SAFETY, RESPECT, LEADERSHIP and INTEGRITY OUR OBJECTIVES Never compromising safety Providing a step change in passenger experience and reliable and integrated travel Maximising opportunities for job creation and regeneration Seeking innovation, efficiency and elegant simplicity in design Conserving natural resources and delivering a low carbon network Being a good neighbour who respects the local environment Delivering on quality, time and cost OUR DELIVERABLES Phase 1 Deposit of hybrid Bill by the end of 2013 Royal Assent for hybrid Bill in 2015 Phase 2 Consultation in 2013/14 Announcement on preferred route in 2014 HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 9 of 34

12 Our strategic themes 2.4. HS2 Ltd has developed eight strategic themes through which it will achieve its objects and develop its cultures and values. These programme level themes allow the HS2 Ltd programme vision to be realised by providing a clear line of sight from the programme goals through to the resources needed to deliver it They provide an essential framework for programme planning and delivery through the setting of goals, targets and incentives which feed down to the objectives and targets of individuals and our supply chain. The HS2 VISION: Engine for growth STRATEGIC THEMES STRATEGIC GOALS HEALTH, SAFETY & SECURITY We will design, build and operate the railway to the highest safety standards ON TIME We will deliver all the benefits of HS2 on time ON BUDGET DESIGNED FOR THE PASSENGER VIBRANT CITY REGIONS ENVIRONMENT BENCHMARK FOR DELIVERY AND OPERATIONAL EXCELLENCE SKILLS & EMPLOYMENT We will keep HS2 on budget by relentlessly focussing on control of costs and driving value We will deliver a modern transport solution that is reliable, seamless and easy to use for all passengers, and well integrated with existing transport systems Working in partnership with Britain s city regions, we will create great places to live and work throughout the country We will be an exemplar project that is built and operates sustainably, responsibly and respectfully of the communities, wildlife and places affected by HS2 We will seize the opportunity to transform how we design and build major projects and operate railways Working with our suppliers, we will build a skilled workforce that fuels further economic growth across the UK HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 10 of 34

13 3. Achievements in 2012/13 Background 3.1. Following the Government s announcement in January 2012 of its intention to proceed with the development of a new high speed rail network, HS2 Ltd has been carrying out work to provide advice on Phase One of the HS2 scheme (London to West Midlands) to enable the DfT to deposit a hybrid Bill with Parliament. This has included: the development of design options; undertaking environment impact assessments for Phase One to enable preparation of the Environmental Statement, including a draft for public consultation in May 2013; running consultation for the Phase One property compensation scheme and launching safeguarding ; launching consultation on Phase Two; working to provide financial updates through the production of Baseline 3 and through agreement between HS2 Ltd, DfT and HMT on the Spending Round 2013 (SR13); working closely with the DfT on continued development of the economic case (published in January ) which considered the overall cost of the scheme and addressed value for money, affordability and deliverability of Phase One; and working with Infrastructure UK (IUK) on its review of whether and how the cost of construction could be lowered Following submission in March 2012 of our report to Government on Phase Two of high speed rail, we have also provided advice to the Secretary of State to support the announcement in January 2013 of the initial preferred route for Phase Two and started preparations for consultation to commence in summer Programme achievements 3.3. During the year HS2 Ltd, in conjunction with its development partner, CH2M Hill, and the PSCs, has further developed the engineering design, including design of the route, its structures and mitigation measures. This has been carried out alongside environmental work (see paragraph 3.9 below). Revised options (compared with the plan announced in the January 2012 announcement) to deal with a number of challenging issues and concerns raised by stakeholders have been recommended to the Secretary of State. 6 This, along with subsequent and related economic documents, may be found at HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 11 of 34

14 3.4. In October 2012, we launched a consultation on the compensation arrangements for property owners affected by the proposed high speed rail line from London to Birmingham and a separate consultation on the process of safeguarding. The consultation period ended in January The two consultations yielded a combined total of around 35,000 responses from members of the public, local authorities, elected officials and a range of other interested parties. In the Judicial Review ruling in March 2013 [see paragraph below], the judge found that the consultation process was unfair, since insufficient information was provided to consultees and the criteria by which compensation options were considered were not adequately explained. A new consultation will be run later this year before the Secretary of State determines the finalised compensation measures available to Phase One of our route. The safeguarding direction for Phase One was issued in July 2013 a significant step towards securing the land required for the HS2 scheme, as well as a positive and welcome outcome for property owners affected by our route From April to May 2012, HS2 Ltd consulted on a draft Scope and Methodology Report, which set out a proposed approach to undertaking an Environmental Impact Assessment. Responses to the consultation were analysed and presented in a summary report that led to refinements and improvements to our proposed approach Community forum meetings were held along the line of route from London to the West Midlands as a means of engaging with local communities. Membership of community forums included representatives of local authorities, residents associations, interested groups and environmental bodies. These forums met regularly in order that representatives of each local community could engage with HS2 Ltd to: inform local people about the HS2 proposals and consultations, discuss potential ways to avoid or mitigate the environmental impacts of the route, such as screening views of the railway, managing noise and reinstating highways, and identify local community benefits and activities that could be linked to HS2 work, for example building a playground over a green tunnel Planning forum meetings were held to facilitate discussion between HS2 Ltd and local authority officers on matters such as design development, planning issues, environmental impacts and mitigation principles. They provided a focal point for ongoing engagement with local authorities and their communities through area-based teams. HS2 Ltd also held separate sessions to directly brief elected Council Members HS2 Ltd engaged with the National Environment Forum and the Non-Government Organisations (NGO) Forum. The Environment Forum, involving Government departments and statutory environmental consultees, advised HS2 Ltd on the strategic approach to significant environment effects, including the project s approach to mitigation. The NGO Environment Forum, meeting in advance of the Environment Forum, sought the views of a wide range of non-government organisations (NGOs). These forums have provided an important part of a wider programme of on-going and wider engagement with councils, communities and organisations. HS2 Ltd also HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 12 of 34

15 deployed five Area Stakeholder and Community Liaison teams for the London to West Midlands route to identify local priorities and explore opportunities for community benefits. They worked with the engineers and environmental specialists in the project development teams to broker solutions We have been preparing the Environmental Statement, which will provide an overall assessment of the effects the project is likely to have on the environment and possible ways to avoid or minimise any negative impacts. During this work we have engaged with local communities and relevant authorities, with a view to agreeing measures to mitigate local environmental effects. In May 2013, two parallel consultations were launched on the draft Environmental Statement and the Secretary of State s proposed refinements to the design of Phase One of the scheme We submitted our Phase Two options to the Secretary of State for Transport on 29 March This was considered objectively and in detail, in accordance with the then Secretary of State s written ministerial statement to Parliament of 27 March 2012, including consideration of the views of delivery partners in the cities where stations may be located and any underpinning evidence which they had identified On 28 January 2013, the new Secretary of State (appointed in September 2012) further considered the options and published details of his initial preferred route and a plan for public consultation to start in Subsequently, we have sought the input of interested parties, including local authorities and MPs, to help further develop the proposals that are now for formal public consultation We also carried out work to help the DfT develop a Paving Bill, the High Speed Rail (Preparation) Bill, which was presented to Parliament on 13 May Subject to parliamentary approval, it will provide authority for essential expenditure to be incurred in advance of enactment of the hybrid Bill to enable critical activity to continue and ensure that the ambitious timetable that has been proposed, can be met. Judicial reviews In December 2012, the High Court considered ten broad areas of challenge that had been brought by HS2 Action Alliance, a group of local authorities and Heathrow Hub Ltd, against the Secretary of State s January 2012 decisions on Phase One of the HS2 project. The court s rulings found in the government s favour in nine of the areas of claim The court upheld the challenge in one area, namely the way in which the property compensation consultation had been undertaken. The Secretary of State has since decided to run a new consultation in line with the court s finding that further consideration should have been given to other possible compensation models. This will be carried out during Of the nine grounds for challenge previously rejected by the High Court in March, seven were appealed. In July 2013, the Court of Appeal ruled in the government s favour on all seven areas of appeal. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 13 of 34

16 3.16. An appeal against the Court of Appeal judgement on two grounds will be heard by the Supreme Court in October Judicial review proceedings have been launched against the Secretary of State in respect of the Safeguarding Directions. The parties have agreed to stay these proceedings until after the Supreme Court judgement has been given. Organisation and resources We implemented our new organisational structure, which has been designed to support fully integrated working alongside our development partner (CH2M Hill), our professional services contractors, and our continued work on the Phase Two - Leeds, Manchester and Heathrow routes In the year to 31 March 2013, we introduced a comprehensive workforce planning process and recruited over 200 people to fill roles in engineering, environment, community and stakeholder liaison, land and property, economic analysis, project and programme management and support functions. This brought the total staffing level to 392. A new Board was appointed and the majority of permanent appointments to senior positions in HS2 Ltd were completed. A performance management programme was put in place and the employees views regularly sought and analysed, with a 90% response rate and encouraging feedback. A Learning and Development programme was introduced, including an enhanced induction process With the increase in staff we have taken on additional space within Eland House, London and have successfully relocated within the building. We have also opened an office in Birmingham. HS2 Ltd has been informed that it will be required to vacate Eland House by the summer of 2014 and work is underway to identify suitable alternative premises in London. Wider corporate milestones We continued to administer the Exceptional Hardship Scheme (EHS) which assists those property owners most severely affected by the London to West Midlands route. From the point the EHS opened on 20 August 2010 to August 2013: 485 applications had been received (including 16 that later withdrew and 134 reapplications) 436 decisions had been conveyed to applicants 118 of these were acceptances 94 properties have been purchased by the DfT at a cost of 54.3m, of which 68 have been rented out; the remaining properties are being prepared for the rental market or are being advertised for rental The Phase One EHS has continued to operate until discretionary measures have been consulted on and the result announced. This is expected to be later in Our land referencing teams have arranged the access for environment impact survey programme work: HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 14 of 34

17 3,147 access licences were issued initially of which 599 (19%) were subsequently scoped out by the survey teams; of the 2,548 remainder, 48% granted access, 11% refused and there were 690 licences (22%) outstanding at the end of the year 7,361 land interest questionnaires were issued to parties with interests in the land affected by the proposed scheme; 30% of these were completed and returned by the end of March 2013 and we are continuing to follow up outstanding questionnaires. (Note: major schemes seldom receive more than 40-50% returns.) 2.2 million has been paid by HS2 Ltd to compensate landowners for disturbance associated with the environment impact survey programme We are operating an Exceptional Hardship Scheme for Phase Two of the route and we have successfully recruited a range of independent professionals as panel members to assess applications Our public enquiries team dealt with over 8,000 general enquiries from the public during the year by post, and telephone, including 219 formal requests for information under the Freedom of Information Act and Environmental Information Regulations Since April 2012, four cases were submitted to the Information Commissioner s Office (ICO) for review of which two were found in HS2 Ltd s favour and two were closed without a issuing a decision notice. The ICO also had one Information Tribunal Case which found in the appellant s favour We have established the core information technology ( IT ) systems capable of handling the real time exchange of large volumes of engineering data between our delivery partners in line with our early adoption of the Government s Building Information Modelling standard for the construction industry. These will be developed to establish a high BIM maturity level to realise significant delivery efficiencies. We also launched a new corporate IT infrastructure to allow us to operate flexibly in the environment of a large fast-moving project We have focused on a move to utility IT goods and services through the use of the G- Cloud framework7, which will support the drive for efficiency and reduce the cost of IT within HS2 Ltd. The IT team also provided support in the development of the Cabinet Office s Digital Service Design manual for Chief Technology Officers, which will support user needs for services which are genuinely agile and responsive We operated within our agreed budget for the year. HS2 Ltd s original operating budget for 2012/13 of 163.3m was increased during the year to 179.3m in order to undertake additional design work arising from public consultation and further ecological studies following advice from Parliamentary Counsel Accounts were laid before Parliament on 27 June 2013 showing an underspend of 2.9m against our Resource limit for that year as well as our targets being achieved for capital expenditure and administration costs. Our audit opinion was unqualified. 7 A procurement framework established as part of the Government s ICT strategy. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 15 of 34

18 3.31. We embarked on the development of an accommodation strategy to meet our requirements up to and beyond receiving Royal Assent for the Phase One hybrid Bill. Our staffing increased during the year from 192 to 392 and is further expected to increase to more than 700 in line with our Workforce Plan by the time that Royal Assent to the hybrid Bill is concluded in March We have prepared a Construction Code of Practice (CoCP) which sets out the principles and practices that will be applied and how Phase One of the new network between London and the West Midlands will be built with regard to people and places. We have consulted informally with local authority planning officers and statutory bodies and issued a draft CoCP for public consultation. Measures outlined in the draft CoCP explain how contractors will build the line expected to start around in a way that learns from the best practice established by recent large UK infrastructure and building projects such as HS1, Crossrail and the Olympics. The topics covered in the CoCP include such issues as working hours, traffic management, noise and vibration, air quality, waste management, recycling, ecology, archaeology and settlement During the year we put in place an occupational health and safety management system to meet the requirements of BS OHSAS External certification will be obtained at the appropriate time. We have also introduced an incident reporting system which includes near miss reporting. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 16 of 34

19 4. Ongoing work programme Overview 4.1. On 10 January 2012, the then Secretary of State announced the outcome of the consultation and the Government s decisions on its strategy for high speed rail The Government's proposed network will be delivered in two phases - the first a line from London to the West Midlands, and the second the onward legs to Manchester and Leeds with connections to points further north via the existing East and West Coast main lines. Phase One 4.3. We have consulted on property and compensation arrangements for property owners affected by the proposed high speed rail line from London to Birmingham The Secretary of State has issued safeguarding directions 8 for much of Phase One and we are assessing applications submitted under this process for property compensation. A further consultation on discretionary property 4.5. We will need to obtain the necessary legal powers from Parliament in order to construct the line. The Government intends to seek the necessary powers to build and operate the new railway through a hybrid Bill, which will set out the land requirements for the London to West Midlands route and provide the necessary legal powers to build and operate the new railway In order to support the Bill, we have completed the next stage of engineering design, which includes a more detailed design of the route, its structures, and mitigation measures. This work began early in 2012 alongside environmental work and further development of our Demand & Appraisal model As part of this process, we will prepare an Environmental Statement, which will provide an overall assessment of the effects the project is likely to have on the environment and possible ways to avoid or minimise any negative impacts. We have issued a draft Environmental Statement summarising the results of this work, along with design refinements since the January 2012 announcement, for consultation. We will continue to engage with local communities and relevant authorities, and aim to agree measures to mitigate local environmental effects Following this consultation a final Environmental Statement will be deposited alongside the hybrid Bill and, through this, any significant environmental effects will be brought to the attention of Parliament for consideration. The preparation of a hybrid Bill is underway, and it is the Government s intention to introduce the Bill to Parliament by the end of Safeguarding is an established part of the planning system designed to protect land which has been earmarked for major infrastructure from conflicting developments which might otherwise occur. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 17 of 34

20 4.9. The Government s aim is for the hybrid Bill to receive Royal Assent in early Following that, there would be a period to prepare for construction, during which, for example, land would be acquired and contracts let. Major construction itself would commence around 2017 and take approximately eight years to reach the point of testing and commissioning for opening in (The most complex construction activity would be at Euston where works would be expected to take the whole of this period, although, at most places along the route, construction would take place over a shorter period). A period of commissioning and testing would be needed from around 2024, with a London to West Midlands route expected to open in Phase Two We are operating an Exceptional Hardship Scheme for Phase Two of the route and we have successfully recruited a range of independent professionals as panel members to assess applications Following the Secretary of State s announcement, we obtained the input of interested parties, including local authorities and MPs, to help further develop the proposals for subsequent formal public consultation on the Phase Two initial preferred route this year Full public consultation has been launched and once completed and the responses analysed, will help inform the Secretary of State in making a decision on the preferred route for Phase Two by the end of 2014 and then a further hybrid Bill would be put forward in the next Parliament (beyond 2015). Proposed expenditure An aggregated summary of our overall budget lines for 2013/2014 to 2015/16 (including VAT) is provided below and is compared with our total annual expenditure for 2009/2010 to 2012/2013. Total are as agreed between HS2 Ltd, DfT and HM Treasury as part of the Spending Round Actual ( m) Up to 2009/10 Budget allocation ( m) 2010/ / / / / /16 Resource Capital Note 1: Resource expenditure and budgets include administration costs and VAT. Note 2: The original CSR budget for 2012/13 was 163.3m resource and 9.0m capital these were revised in [December 2012] to 179.3m and 8.2m respectively to allow HS2 Ltd to progress its work. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 18 of 34

21 Cost control and value for money HS2 Ltd has been set a target for the overall cost of Phase 1 of the railway of 17.16bn including 1.56bn contingency and risk at a P95 probability level. This will require a rigorous control of costs and emphasises the both the importance of affordability and the need for HS2 Ltd and DfT to work constructively together to seek opportunities for cost reduction and to look critically at any proposals which potentially add to costs The Phase One cost estimate of 21.4bn announced as part of SR13 (at 2011 price levels, including 5.8bn contingency and risk at a P95 probability level) has been reviewed by CH2M Hill and provides a baseline against which costs can be controlled. Any change to this baseline will need to be justified via the change control mechanism Phase Two costs are less mature but a funding envelope of 21.2bn at P95 probability level, has been agreed as part of the SR13 process which provides sufficient resources for us to be able to progress the scheme through its next phases HS2 Ltd and DfT have developed a comprehensive Efficiency Challenge Programme aimed at optimising all opportunities for cost savings whist maintain the scope of the scheme and the remit provided by the Secretary of State. Third party funding and revenues Where practical, we will assist DfT in identifying and exploiting opportunities for third party funding to support the affordability and sustainability of HS2 and will highlight any potential for future revenue returns to the taxpayer We will also identify and develop proposals for generating non-rail passenger revenue and returns to the taxpayer within our proposed overall station footprints. While oversite development would be subject to separate planning approval, we will include provision for the potential for such development in our station designs No third party funding or revenue streams have been included in our financial projections. HS2 as an engine for growth HS2 Ltd will work with Government to realise regeneration and economic benefits from its investment in HS2, including any complementary funding sources. We will engage with Local and Regional Authorities to generate a long term return for Government investment in infrastructure in addition to the pure transport benefits of improving capacity or journey times. Regeneration and development opportunities shall be pursued at all stations in concert with Local Authorities, with the aim of delivering development as early as possible. It is anticipated that Local authority partners will lead the strategy, with their aspirations and plans forming the basis for regeneration. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 19 of 34

22 5. Business plan for 2013/2014 Overview 5.1. This section sets out the objectives that we need to achieve over the course of the period from 1 April 2013 to 31 March More detail is provided in the sections below. Phase One Consultation and engagement 5.2. In May 2013 two important consultations were launched, one on a draft Environmental Statement and one on a series of design refinements that the Secretary of State is minded to make. The draft Environmental Statement document is unprecedented in terms of scale and detail; it is the outcome of a sustained and intensive period of work involving resources and disciplines from across our organisation. We have carried out an extensive publicity and information campaign in association with the consultations, including a series of 28 public events bringing together a range of proponents and opponents of the scheme in community venues along the Phase One line of route. The results of these consultations will be reflected in the final documents submitted in support of the hybrid Bill later this year We have supported the DfT in its preparation of the High Speed Rail (Preparation) Bill which was recently presented to Parliament. We will also support the preparation of the hybrid Bill so that the Government can introduce it into Parliament by the end of This paving Bill will enable expenditure to be undertaken on critical activities prior to Royal Assent to the hybrid Bill being granted We will undertake a further consultation on property compensation in line with the findings of the judicial review that further consideration should have been given to other possible compensation models. This will be carried out during In preparation for the hybrid Bill and to help those who may be impacted by the proposals, a significant programme of consultation and engagement has already been undertaken. HS2 Ltd will continue to work closely with local authorities, communities and stakeholders on the consultation on the draft ES and the route refinements and during the remainder of the lead-up to the hybrid Bill for the London to West Midland route Our engagement with communities and organisations with interests along the route helps to identify the likely significant environmental effects of the proposal. We will continue to discuss the potential environmental effects of our route with communities in each area and other interested parties, listen to their specific concerns and consider possible solutions. The outputs from this engagement will contribute to development of the final ES Close engagement with individuals and organisations that have an interest in HS2 is necessary to deliver the hybrid Bill to the intended timescale and ensure that appropriate help is in place for those affected by the proposals. To help this process we have community, planning and environment forums. The various forums are a HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 20 of 34

23 mechanism for dialogue and engagement, and they are intended to ensure that local views are reflected as far as practical in our decision-making Community forums will continue to engage with local communities. Membership of community forums includes representatives of local authorities, residents associations, interested groups and environmental bodies. These forums meet regularly and the aim is for representatives of each local community to work with HS2 to: inform local people about HS2 proposals and consultations; discuss potential ways to avoid or mitigate the environmental impacts of the route, such as screening views of the railway, managing noise and reinstating highways; and identify local community benefits and activities that could be linked to HS2 work, for example building a playground over a green tunnel Planning forums have been set up to facilitate discussion between HS2 Ltd and local authority officers on matters such as design development, planning issues, environmental impacts and mitigation principles. They provide a focal point to ongoing engagement with local authorities and their communities through area-based teams. HS2 Ltd will also continue to have separate sessions directly with elected Council Members The National Environment Forum, which involves Government departments and statutory environmental consultees, is intended to advise HS2 Ltd on a strategic approach to significant environment effects, including the project s approach to mitigation. In addition, an NGO Forum, meeting in advance of the Environment Forum, will continue to seek the views of a wide range of non-government organisations (NGOs). These forums will provide an important part of a wider programme of ongoing and wider engagement with councils, communities and organisations. HS2 Ltd has five Area Stakeholder and Community Liaison teams for the London to West Midlands route which are tasked with identifying local priorities and exploring opportunities for community benefits. They will continue to work with the engineers and environmental specialists in the development teams to broker solutions Experience from other significant infrastructure projects such as HS1, the Olympics, Thames Tideway, and Crossrail suggests that HS2 Ltd as the project promoter is best placed to lead almost all the interactions with third parties, whether with Network Rail, TfL, utilities, national and statutory bodies, local authorities or local communities. In addition, these relationships will persist at least for the duration of design, development and construction. Given the fundamental interaction that external parties will have with the HS2 programme for many years, we will continue to focus on building these relationships. Land and property The purpose of Hs2 Ltd s Land and Property function is to acquire and manage the land required for the railway in a timely, efficient and responsible manner. The business plan objectives for 2013/14 contribute to this end. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 21 of 34

24 5.13. As the property programme grows, we will continue to work with DfT to strengthen the programme s governance and assurance to a level that reflects the programme s scale, importance, urgency and risks All properties purchased will be managed in accordance with principles of good estate management and value for money, including, where appropriate, temporary lettings and leases. We will work with the DfT to accommodate ministerial objectives for the property portfolio In 2013/14 key tasks include working with DfT in administering, and in some cases putting in place, schemes for the purchase of property along the route of HS2. These include the temporary Exceptional Hardship Schemes for Phases One and Two, and the administration of applications and carrying out of purchases under Blight Notice procedures. Later in 2013/14 we will work with DfT in consulting on further discretionary compensation schemes, and depending on decisions taken following that consultation, may support DfT in putting in place and running those schemes For Phase One of the route from London to West Midlands we will undertake comprehensive land referencing to capture and present all interests in land and property in a format and detail that is consistent with the Book of Reference for the hybrid Bill and for Compulsory Purchase following Royal Assent We will also continue to engage with land and property owners along both phases of the route, including members of the public, key property interests such as Network Rail and industry bodies such as the Royal Institute of Chartered Surveyors, National Association of Estate Agents, Council of Mortgage Lenders, Country Land and Business Association, National Farmers Union, London and Continental Railways, and other key stakeholders. In all our dealings with the public including those whose properties we purchase and other stakeholders, we will continue to conform to the highest standards of customer service We will continue to engage with landowners along the entire London to West Midlands route to ensure access for ecology and engineering surveys using the National Farmers Union / Country Land and Business Association approved access licence scheme. Our delivery partners We are already working very closely with Network Rail to deliver the project and will be developing a formal agreement with them to make sure roles and responsibilities are clear. Network Rail has several important roles in relation to HS2: as owner and infrastructure manager of the classic rail network, where it has a crucial role in construction and operational interfaces as owner and operator of Euston station as maintainer of the HS1 infrastructure, with valuable experience of high speed rail; and as the owner of parcels of land along the route. HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 22 of 34

25 5.20. We will also be working closely with Transport for London and local transport authorities to facilitate access to stations and construction. TfL, in particular, has an important role as owner and operator of London Underground at Euston, at the Crossrail project interchange at Old Oak Common and at interfaces with London Overground lines More generally, we will be working with planning authorities and other local partners to facilitate development around HS2 stations. Cost control In line with our continuing commitment to control costs, there are a number of things we wish to achieve over the course of 2013/ We therefore need to continue to: develop and implement HS2 best practice in relation to cost estimation, risk assessment and whole life costing through the company and the frameworks; make use of early contractor involvement and other relevant procurement approaches to anticipate issues that HS2 Ltd could experience in the construction phase; and continue to develop our budget preparation, monitoring and reporting framework to ensure that it is robust and supports effective cost control We will continue and develop our engagement with bodies such as Infrastructure UK and the Civil Engineering Contractors Association (CECA) to allow us to access industry wide data and best practice. Phase Two Following the January 2013 announcement by the Secretary of State of his initial preferred route for Phase Two, we launched a public consultation on this in July 2013 and will provide advice to the Secretary of State to enable him to reach a decision on the preferred route by the end of We are operating an Exceptional Hardship Scheme for Phase Two of the route and we have successfully recruited a range of independent professionals as panel members to assess applications We will continue design development of the route. Wider corporate initiatives HS2 Ltd budgeted expenditure and staffing for 2013/14, along with actual for 2012/13, is as follows: HS2 Ltd Corporate Plan to 2015/16 and Business Plan Page 23 of 34