The National Audit Office (NAO) has called for a pause on implementing revised plans for the High Speed 2 (HS2) railway until the government is confident the project can be delivered. In a report published on Thursday, the spending watchdog stressed the need to put the high-speed rail project on a stable footing to avoid repeating costly past failures.
Costs and Delays Mount
Last month, Transport Secretary Heidi Alexander announced that HS2 is now expected to cost up to £102.7 billion, with trains not running between London and Birmingham until as late as 2039. This represents a £70 billion increase and a 13-year delay from the original promise. The entire project may not be completed until 2043. The initial cost estimate for building HS2 from London to Birmingham, along with the now-abandoned legs to Leeds and Manchester, was £32.7 billion at 2011 prices.
Reset Process Underway
Following a 15-month review, Mark Wild, chief executive of HS2 Ltd, presented a new detailed plan for the remaining work. The NAO acknowledged that a “considered approach” is being taken to resetting HS2 but noted that “significant work” remains before completion. The Department for Transport (DfT) and HS2 Ltd aim to finalise the reset by spring 2027.
The NAO stressed: “It is crucial that they get it right this time following past failures. They should ensure that they do not proceed with putting the plans into action until they are confident everything is in place to deliver against them.” The watchdog recommended that the DfT and HS2 Ltd review the “realistic” nature of the new timetable in autumn and revise it if necessary. The cost of the reset process is estimated at £153 million.
Root Causes of Cost Increases
The NAO attributed most cost increases to “cost underestimation, inefficient delivery and scope changes”. The Manchester leg of HS2 was cancelled in October 2023 by then-Prime Minister Rishi Sunak. Gareth Davies, head of the NAO, stated: “Establishing a fully robust estimate of cost and schedule, completing commercial negotiations and getting the right capabilities in place is necessary before they [DfT and HS2 Ltd] can complete the reset.”
Government and HS2 Ltd Responses
A DfT spokesperson said: “Following years of mismanagement, this government has taken decisive action to reset HS2 and ensure the safe delivery of the line between Birmingham and London at the lowest reasonable cost. The reset is driving faster, more efficient construction on the ground, with six major construction milestones reached ahead of schedule last year.”
A spokesperson for HS2 Ltd commented: “Fundamentally resetting HS2 was the only way to regain control of the project and break the cycle of poor delivery, delays and cost increases. This is a hugely complex task, requiring a vast amount of external industry expertise, and has been carried out in parallel with an increase in productivity across HS2’s vast 140-mile construction programme. Any costs associated with the reset will ultimately pay for themselves through improved management and efficiencies.”
