Council seeks ‘fair and equitable deal’ following HS2 Phase 2 scrapping

23 October 2023

Cheshire East Council is pursuing a compensation and investment package from Government following the decision to scrap HS2 north of Birmingham – a deal the authority says would fairly compensate for the loss of an ‘unprecedented economic opportunity’.

On Friday (20 October), the leader and deputy leader of Cheshire East Council wrote to Minister of State for Rail and HS2, Huw Merriman MP, and Secretary of State for Levelling Up, Housing and Communities, Michael Gove MP, restating the authority’s deep shock and disappointment that high-speed rail will no longer make it to Crewe and asking for Government’s commitment to a ‘fair and equitable deal’ that would restore the long-term economic outcomes that HS2 would have unlocked for Crewe and the wider borough.

The letter follows the publication of the Government’s ‘Network North’ plan which refers to £19.8bn of reinvestment for the North and identifies projects and regions that would directly benefit.

However, the plan includes no mention of investment in Cheshire East or Crewe, despite the direct and devastating impacts the decision has had on the town’s future.

Councillor Sam Corcoran, leader of Cheshire East Council, said: “The full consequences facing Crewe and the borough following the decision to scrap Phases 2a and 2b of HS2 are unknown, and they may not be understood for several years, but the economic opportunity cost alone is unprecedented. 

“Cheshire East would have been a major beneficiary from HS2. But for Crewe itself –  sitting at the centre of the HS2 Phase 2 network – HS2 was the catalyst to reverse its fortunes and deliver on the levelling up agenda and it is arguably the biggest loser from the HS2 cancellation and Network North Plans.

“Without swift agreement on the alternative measures, investment, and targeted support from Government – the opportunities will be lost forever.

“The announcements made on 4 October are greatly impacting on the confidence of investors and developers and will result in the loss of 4,500 new homes and 5,000 new jobs for the town.

“The expected £750m boost HS2 would have had on the local economy will not be realised, and what we will now see because of this decision by Government is in fact levelling down and not levelling up.

“We are therefore extremely let down by Government’s failure to date to acknowledge or engage with us about the devastating impacts this will have on the town, the wider sub-region, and the financial security of the council in the proposed Network North. 

“We consider it necessary that Government agrees a Network North deal with Cheshire East to enable the delivery of vital capital projects and regeneration programmes strategically focused on restoring the long-term outcomes for Crewe, Macclesfield and the borough that HS2 would have unlocked, and to ensure that much-needed investment in our local highway, public transport and active travel network can still be made.”

The package of compensation and mitigations the council is seeking includes:

• Compensation for direct and abortive council costs in relation to HS2, totalling £11.2m.
• Funding and commitment to enable critical investments in Crewe Station, including the commitments secured through recent petitioning, and futureproofing for alternative passenger and freight rail investments. 
• Local highway, public transport, and active travel network improvements via both up-front and multi-year transport funding settlements. This includes enhanced funding for the Middlewich Eastern Bypass and A500 dualling schemes, and funding to deliver Cheshire East’s Bus Service Improvement Plan in full, to help transform local bus services. 
• Funding to support a programme to tackle deprivation challenges in Crewe to reduce levelling down because of the HS2 announcement, including the continuation of the recent Crewe Deep Dive being undertaken jointly by the Department for Transport and the Department for Levelling Up, Housing and Communities.
• Funding to support the continued regeneration of Crewe town centre and deliver projects that will increase the vibrancy and attractiveness of the area and help restore investor confidence following the announcement. 

Cllr Craig Browne, deputy leader of Cheshire East Council and chair of its highways and transport committee, said: “Crewe would have been the vital regional hub for HS2 services – the gateway to the North and the link between the North and Midlands – and on the back of Government’s HS2 promises, the council invested significant resources and made long-term plans based around 5-7 high-speed trains per hour stopping here.

“Without appropriate compensation and alternative investment to the council, Government’s decision to cancel HS2 Phase 2a and 2b will put the council under even more severe financial pressure and leave our plans and ambitions for the borough severely undermined.

“We are therefore pressing Government for fair and balanced consideration for Crewe and Cheshire East, and that the direct damage, losses and opportunity costs that the cancellation of HS2 has caused is put at the heart of the Network North Plans – just as Crewe sat at the heart of HS2 Phase 2.”