What is the Exceptional Hardship Scheme?
At the same time the Government published its preferred route for Phase 1 of HS2 in March 2010, the Secretary of State also published a formal consultation seeking views on whether there should be an Exceptional Hardship Scheme (EHS) before statutory blight provisions would apply and ahead of decisions on whether, and if so how, to proceed with a high speed route.
This Exceptional Hardship Scheme was designed to be a temporary measure until the Government decided whether or not to proceed with HS2 and, if a decision was taken to proceed with HS2, before a finalised scheme could be put in place for the long period of time between the decision to proceed with HS2 and the new line being up and running (a period between 2012 and 2026/34).
The consultation asked for comments on the proposed principles and system for operating the scheme. The proposed EHS was essentially based on arrangements that had previously been used in similar situations, most notably Crossrail.
In July 2010 Phillip Hammond, Transport Secretary announced that an Exceptional Hardship Scheme would be introduced. The EHS has applied from August 2010 (although applications received before that date would be considered) and continues in place today .for properties located near the proposed route for Phase 1 of HS2.
On 28 January 2013 when the proposed route for Phase 2 was announced, a formal consultation on the Phase 2 Exceptional Hardship Scheme commenced. This will run until 5pm on 20th May 2013. The consultation document is available on the HS2 website here. HS2AA have reviewed the proposals and unsurprisingly they appear the same as for Phase 1. Information to help you respond is available here.
Phase 1 Exceptional Hardship Scheme Rules
EHS is a non-statutory scheme whereby the Secretary of State purchases individuals’ properties who
- Are residential owner-occupiers, small business owners (rateable value of £34,800 or less), owner occupier farmers, recently inherited and repossessed properties
- Live on or in the close proximity of the route and likely to be substantially affected by construction or operation of HS2. Properties over tunnels are only included if they are close to proposed entrances and exits
- Have an urgent need to move but cannot do so without accepting at least a 15% reduction from the unblighted market value
- Have a hardship reason for moving eg change of employment location; external financial pressure forcing a sale eg divorce, house possession; accommodate enlarged family; move into sheltered accommodation etc; medical condition of family member requiring urgent move. The reasons for moving are not confined to these examples.
- Have made reasonable efforts to sell and the inability to sell is due to HS2 (not another reason) and had the property on the market for at least 3 months. Revised DfT guidance was issued in Jan 2011 that made it clearer that the marketed price must be realistic, competitive and take account of urgent need to sell (ie code for a price reduction!)
- Had no offer within 85% of the open market value property price ie its unblighted value.
- Did not know about HS2 when originally purchasing the property.
A panel decide on whether applications are successful (on a case by case basis). The panel has a majority of independent members. There is currently no appeal mechanism, but a re-application can be made. Compensation is at the full unblighted value. This value is determined by averaging the valuations done by two independent valuers (if the figures differ by more than 10% a third valuation is done and the closest two averaged).
Applications Made to the Phase 1 Exceptional Hardship Scheme
According to HS2, as at October 2012 there have been 394 applications to the EHS, with £34m spent purchasing 59 properties. 216 cases (70%) have been rejected. 20% of the applications (64) are re-applicants. 27 of the 41 properties have been rented out.
It was recognised by Government that the scheme would be an interim measure until such point that permanent arrangements could be put in place for properties not needed to build HS2 but have been significantly blighted by HS2.
What should you do (if you are close to the Phase 1 Route)?
If you think you have a claim then make one. If you do not meet all the criteria then still try.
Look at the application rules and the FAQs and complete the forms.
If you succeed PLEASE let us know so we can help others. Especially tell us what distance you are from the line so we can get a feel for the guideline the Panel use ie whether its more generous than similar schemes.
Want to know more?
If you want to know more about the Phase 1 EHS please use the following links.
1. Official Guidance from HS2 is here
2. HS2 Action Alliance's Alternative Compensation Solution (summary)
3. HS2 Action Alliance's Final Response to the EHS Consultation presented to the DfT/HS2 Ltd (17 June 2010)
4. HS2 Action Alliance's research paper on the EHS
5. HS2 Action Alliance's EHS Consultee's pack (April Briefing document, as attached to Final 17 June Response)
6. HS2 Action Alliance's Property Blight from HS2: Pilot Study (submitted as part of Final Response on EHS, with cover letter)
7. The Secretary of State’s announcement on EHS can be found here