North West receives only 4% of HS2’s subcontractor spend

HS2 has spent £7.9bn on tier two contractors – but only 4 per cent of these have been with companies based in North West England.

The publicly owned rail project has said it is “helping to keep over 2,000 UK businesses afloat as they tackle difficult economic conditions”, adding that £3.6bn (45 per cent) of its subcontractor spend has been with SMEs – businesses with fewer than 250 employees.

Newly-published figures (see below) show that HS2 has spent more on subcontractors in the regions surrounding its first phase, from London to Birmingham – with £5.7bn (74 per cent) being spent with firms from the West Midlands, East of England, London or the South East.

HS2 is now set to extend to Crewe and Manchester under its Phase 2 plans, but only £277m (nearly 4 per cent) of its subcontractor spend has so far been with firms based in North West England.

In total, £1.2bn (15 per cent) of subcontractor spend has been with firms from the North of England, with £668m (9 per cent) going to North East firms and £255m (3 per cent) going to firms from Yorkshire.

Subcontractors in the East Midlands have received £331m (just over 4 per cent) from HS2, while £1.7bn (23 per cent) has been shared by subcontractors in the West Midlands. An HS2 eastern leg was originally intended to stretch through East Midlands to Yorkshire, but was scrapped in 2021.

Meanwhile, 5 per cent of HS2’s subcontractor spend was with businesses in Wales or South West England, while less than 2 per cent was with businesses from Northern Ireland or Scotland.

Commenting on the figures, 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.”

Mark Pickard, managing director of West Midlands-Altrad RMD Kwikform, said: “Working on HS2 has given our business a timely boost, allowing us to rebound from the Covid-19 pandemic and giving us the impetus to invest in our people and hire more staff.

“We’ve worked on various parts of the project, securing multiple contracts over the last few years on sites in London, the Colne Valley and now in Birmingham, where we’re helping to construct the viaduct that will bring high-speed trains into the city centre.

“With years of construction still to go, we’re confident that our work on HS2 will continue to bring stability, prosperity and growth to the business.”

How much money has HS2 spent with tier two contractors in each of the UK’s regions?