£7.9bn worth of HS2 funds will offer a boost for over 2,000 businesses which will be shared across twelve UK regions, to help keep businesses afloat as they tackle economic uncertainty
Of the HS2 funds, £3.6bn has been offered to SMEs, representing 73% of HS2’s UK-based supply chain.
Businesses in every UK region have won work supporting HS2’s construction, with the East of England, West Midlands, Greater London and the South East each amassing over £1bn worth of contracts.
Breaking down the £7.9bn HS2 funds, £1.9bn worth of work has been awarded to medium-sized businesses (50-250 employees), £677m to small businesses (11-49 employees), and just over £1bn to micro businesses (1-10 employees).
HS2 will provide a sustainable option for travel and boost a skilled construction workforce
Rail minister Huw Merriman said: “These figures demonstrate the significant opportunities HS2 offers to UK businesses and supply chains. Not only is it transforming services on our railways, but it’s creating new opportunities for growth and supporting thousands of high-skilled jobs right across the country.
“The benefits of HS2 will be felt for generations to come, creating extra capacity on our rail network and providing a sustainable option for travel, while boosting a skilled construction workforce in the process.”
HS2 funds will provide businesses with a ‘lasting pipeline of work’
Ruth Todd, chief commercial officer at HS2 Ltd, added:“We’re working with specialist businesses and suppliers from across the UK to deliver Britain’s new high speed, low carbon railway. These firms are providing world-leading consultancy services, engineering solutions and products, with many going on to secure multiple contracts. Given the size and longevity of HS2, we’re able to provide businesses with a lasting pipeline of work, which is boosting confidence and prompting investment despite the challenging economic climate.
“It’s fantastic to see the impact partnering with HS2 is having on businesses in our supply chain, supporting and creating thousands of highly-skilled jobs for employees in communities in every corner of the UK.”
Procurement is essential to support small businesses’ growth and innovation
Karen Woolley, development manager at Federation of Small Businesses (FSB), commented: “Procurement is an essential lever through which to support small business growth and innovation and, therefore, to enhance the productivity and the wider competitiveness of the economy. It is encouraging to see in black and white HS2’s level of spend with SMEs, which demonstrates the much-needed levelling of the playing field that the FSB has been calling for.
“At a time when trading conditions are quite possibly at the most challenging they have been for many years, smaller firms having the opportunity of accessing contracts with such an important infrastructure project as HS2 can provide that much needed boost to a company’s economic productivity, whilst also securing jobs and providing for economic stability.”
Work on Euston Tunnel has been delayed
Following the government announcement on 9 March 2023 which confirmed that all phases of HS2 from Manchester to London Euston would go ahead, the first operational phase of HS2, between Old Oak Common and Birmingham Curzon Street, has been prioritised.
However, work on the Euston tunnel was placed on hold last month due to escalating inflation costs. HS2 has confirmed that work on Euston Tunnel, which was originally set to begin in 2024, has officially been delayed. This has caused great frustration amongst residents and whose lives have been disrupted and uprooted to make way for the new £1.2bn tunnel.
Following this, there has been speculation on the impact of long-term costs of delays to HS2. The National Audit Office noted that the decision to delay HS2 by another two years will increase the project yet again.
The Institution of Civil Engineers echoed this statement, commenting that delaying HS2 further could make the building process ‘more difficult as construction firms shift their focus to other countries’.
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