HS2 Phase 2a Development

28 Feb 2025 | Committee report linked

HS2 Ltd’s construction contracts are unacceptable to the public purse and it is imperative that HS2 Ltd deliver on its assurances to us that it can renegotiate these and deliver significant cost savings. The terms and operation of these contracts provide extremely poor value for money. HS2 Ltd did not heed the warnings that the previous Public Accounts Committee made in 2020 that, in bearing more of the risk of cost increases, it would need to ensure the contracts were managed carefully and a...

HS2 Ltd’s construction contracts are unacceptable to the public purse and it is imperative that HS2 Ltd deliver on its assurances to us that it can renegotiate these and deliver significant cost savings. The terms and operation of these contracts …

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28 Feb 2025 | Committee report linked

The Department and HS2 Ltd do not have the skills and capabilities needed to successfully deliver the programme. The Public Accounts Committee has repeatedly raised concerns over the Department and HS2 Ltd having the skills and capability they need. Following the cancellation of Phase 2, HS2 Ltd now needs to reinforce its capability, such as in commercial management, and focus its culture on the singular purpose of delivering Phase 1 for the lowest feasible cost. The company now has new leade...

The Department and HS2 Ltd do not have the skills and capabilities needed to successfully deliver the programme. The Public Accounts Committee has repeatedly raised concerns over the Department and HS2 Ltd having the skills and capability they need. Following …

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28 Feb 2025 | Committee report linked

The Department’s plans for Euston carry huge risks given the uncertainties about its scope, cost, funding, schedule and delivery model. In the 2024 Autumn budget, the government confirmed that HS2 would terminate at London Euston rather than Old Oak Common in West London, but the scope of the work needed at Euston is unclear. The task at Euston is significant as there is not only the construction of the HS2 station and potential allowance for future expansion, but also redevelopment of the ex...

The Department’s plans for Euston carry huge risks given the uncertainties about its scope, cost, funding, schedule and delivery model. In the 2024 Autumn budget, the government confirmed that HS2 would terminate at London Euston rather than Old Oak Common …

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28 Feb 2025 | Committee report linked

In July 2017, HS2 Ltd let contracts with four joint venture companies for the main civil construction work on Phase 1. However, in 2020, once the cost of building the railway became clearer, it revised the terms of the contracts in an attempt to ensure an affordable programme at that time. Contractors would no longer be liable for cost increases above a fixed target price. Instead HS2 Ltd would be responsible for funding increases above the estimated cost although contractors would lose a pro...

In July 2017, HS2 Ltd let contracts with four joint venture companies for the main civil construction work on Phase 1. However, in 2020, once the cost of building the railway became clearer, it revised the terms of the contracts …

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28 Feb 2025 | Committee report linked

However, the previous Public Accounts Committee was clear on the risk of these changes and that HS2 Ltd needed to closely manage these contracts. In its May 2020 report it warned that: “Now that it is bearing more of the risk of cost increases, HS2 Ltd also needs to ensure that it has the right commercial skills to manage its revised contractual arrangements with its main construction contractors.” 29

However, the previous Public Accounts Committee was clear on the risk of these changes and that HS2 Ltd needed to closely manage these contracts. In its May 2020 report it warned that: “Now that it is bearing more of the …

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28 Feb 2025 | Committee report linked

HS2 Ltd told us that it is now seeking to renegotiate these contracts.32 It considers that the current contracts are unproductive and that reset provides the opportunity for a fair allocation of risk and an opportunity to find different ways of commercially incentivising the outcomes that it wants, rather than the ones that it is getting at the moment.33

HS2 Ltd told us that it is now seeking to renegotiate these contracts.32 It considers that the current contracts are unproductive and that reset provides the opportunity for a fair allocation of risk and an opportunity to find different ways …

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28 Feb 2025 | Committee report linked

We challenged HS2 Ltd on the feasibility of renegotiating existing contacts to deliver significant cost savings given the lack of incentives for the contractors to change terms. It told us that all major contractors have expressed willingness to discuss and work through a renegotiation as there was recognition from the private sector that better alignment of incentives between the taxpayer and the delivery of the works was necessary to reduce long–term risk. HS2 Ltd also emphasised that the m...

We challenged HS2 Ltd on the feasibility of renegotiating existing contacts to deliver significant cost savings given the lack of incentives for the contractors to change terms. It told us that all major contractors have expressed willingness to discuss and …

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28 Feb 2025 | Committee report linked

In the October 2023 announcement, the government at the time set out that the HS2 station itself would be planned to be smaller, reflecting the lower number of train services expected to operate following the cancellation of Phase 2. However, the scope of the Euston programme would now be larger, incorporating more commercial development and new housing beyond the boundary of the station site.52 The Department set out for us the four key elements that now need to be brought together as a resu...

In the October 2023 announcement, the government at the time set out that the HS2 station itself would be planned to be smaller, reflecting the lower number of train services expected to operate following the cancellation of Phase 2. However, …

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28 Feb 2025 | Committee report linked

The Department told us that the new approach to Euston is now a holistic one, seeking to build consensus between stakeholders and as a unified delivery rather than the ineffective attempts of the past to try to solve each part separately and hope that they fit together.55 The Department expects to progress with the delivery model and set up of the delivery company over the next year.56 It also told us that, on the development corporation, 52 C&AG’s Report, para 3.3 and 3.5 53 Qq 45, 47, 49; C...

The Department told us that the new approach to Euston is now a holistic one, seeking to build consensus between stakeholders and as a unified delivery rather than the ineffective attempts of the past to try to solve each part …

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28 Feb 2025 | Committee report linked

We challenged the Department over the necessity and added risk of establishing an additional delivery body to oversee the works at Euston and its surroundings. The Department recognised that setting up new organisations is far more complex and difficult than is often thought, and that its experience with HS2 Ltd demonstrates that it is difficult to set up high–functioning new organisations delivering extremely complex infrastructure. However, the Department told us that the task at Euston is ...

We challenged the Department over the necessity and added risk of establishing an additional delivery body to oversee the works at Euston and its surroundings. The Department recognised that setting up new organisations is far more complex and difficult than …

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28 Feb 2025 | Committee report linked

The Department also pointed to the need to get the financial incentives right in the new delivery company, including what the shareholding and financial participation would be between the different bodies, so that people consider the collective interest, not just their own interests. The Department reasoned that having that in one delivery body, rather than dispersed across four entities, provides a better chance of producing coherent solutions and effective and efficient delivery.59

The Department also pointed to the need to get the financial incentives right in the new delivery company, including what the shareholding and financial participation would be between the different bodies, so that people consider the collective interest, not just …

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28 Feb 2025 | Committee report linked

We also challenged the Department on the likelihood of obtaining the more than £6 billion that the station at Euston is estimated to cost from the private sector. The Department suggested that the funding for Euston would likely be a mix of four components: private financing of the HS2 station; development receipts from commercial development; tax increment finance or contributions from local government; and some residual public funding. The Department told us that it had carried out some ear...

We also challenged the Department on the likelihood of obtaining the more than £6 billion that the station at Euston is estimated to cost from the private sector. The Department suggested that the funding for Euston would likely be a …

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28 Feb 2025 | Committee report linked

In the 2024 Autumn Budget, the government confirmed that HS2 would terminate at Euston, announcing that it would fund the work to tunnel from Old Oak Common in west London to Euston.61 The previous Public Accounts 57 Qq 78–80 58 Q 47 59 Ibid 60 Qq 45–46 61 HM Treasury, Autumn Budget 2024, 30 October 2024. 20 Committee recommended that a decision on tunnelling was needed urgently to avoid incurring much greater costs from stopping and restarting work.62 The Department was unable to tell us, ho...

In the 2024 Autumn Budget, the government confirmed that HS2 would terminate at Euston, announcing that it would fund the work to tunnel from Old Oak Common in west London to Euston.61 The previous Public Accounts 57 Qq 78–80 58 …

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28 Feb 2025 | Committee report linked

The Department acknowledged that establishing a clearer plan for the works at Euston and implementing it will take over a decade and that there will be continued disruption to local businesses and communities at Euston. The Department committed to provide transparency and engagement with local residents on its plan.65 62 Committee of Public Accounts, HS2 and Euston, Tenth Report of Session 2023–24, HC 67, 7 February 2024 63 Qq 81–86 64 Department for Transport, HS2 6-monthly report to Parliam...

The Department acknowledged that establishing a clearer plan for the works at Euston and implementing it will take over a decade and that there will be continued disruption to local businesses and communities at Euston. The Department committed to provide …

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28 Feb 2025 | Committee report linked

The HS2 programme was originally intended to improve capacity on the West Coast Main Line. However, with the cancellation of Phase 2, the revised programme will only address capacity between London and Birmingham. The Department is exploring options to run longer HS2 trains north of Birmingham, but this would require additional works at existing stations.73 Further options for addressing capacity issues include managing demand for rail services or investing in infrastructure such as additiona...

The HS2 programme was originally intended to improve capacity on the West Coast Main Line. However, with the cancellation of Phase 2, the revised programme will only address capacity between London and Birmingham. The Department is exploring options to run …

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28 Feb 2025 | Written evidence linked

The Department acknowledged the capacity challenge on the West Coast Main Line as a consequence of not building Phase 2, estimating that it will reach capacity by the late 2030s. These capacity concerns were also raised with us in evidence from Manchester City Council, Transport for Greater Manchester and the High Speed Rail Group.75 The Department 69 Qq 56–57; Prime Minister’s Office, The King’s Speech 2024, pages 42–43 70 C&AG’s Report, para 2.16 71 Qq 54–57; C&AG’s Report, Fig 2 72 Ibid 73...

The Department acknowledged the capacity challenge on the West Coast Main Line as a consequence of not building Phase 2, estimating that it will reach capacity by the late 2030s. These capacity concerns were also raised with us in evidence …

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7 Feb 2024 | Committee report linked

The Department and HS2 Ltd do not yet know what the impact of the decision to cancel Phase 2 will be on the HS2 programme and how HS2 Ltd will need to adapt so it can be successfully delivered. HS2 Ltd and the Department need to work through in detail how they will close-down work on the cancelled sections of HS2. The Department does not yet understand how the high-speed trains will operate as part of the rail network or how the HS2 line will connect to the West Coast Mainline to maximise ben...

The Department and HS2 Ltd do not yet know what the impact of the decision to cancel Phase 2 will be on the HS2 programme and how HS2 Ltd will need to adapt so it can be successfully delivered. HS2 …

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7 Feb 2024 | Committee report linked

Developing Euston is dependent on attracting private finance to pay for it, but the Department does not yet have any plan for how to do so and has to make investment decisions soon to protect long-term value for money. Despite the intention to scale back the station itself compared with previous plans, redevelopment work at Euston remains a huge and complex project. Government has redirected £6.5 billion (in 2023 prices) of expenditure away from Euston, and the Department is now looking for p...

Developing Euston is dependent on attracting private finance to pay for it, but the Department does not yet have any plan for how to do so and has to make investment decisions soon to protect long-term value for money. Despite …

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7 Feb 2024 | Committee report linked

The Department has yet to finalise what the redirected £36 billion (in 2023 prices) originally intended for the cancelled HS2 phases will fund or decide on when these projects can be expected to start. The Department has redirected the £36 billion that would have been spent on HS2 Phases 2a, 2b and East to a large portfolio of different road and rail projects through ‘Network North’. This funding will be available over the period up to 2041, very roughly mirroring the timings of when it would...

The Department has yet to finalise what the redirected £36 billion (in 2023 prices) originally intended for the cancelled HS2 phases will fund or decide on when these projects can be expected to start. The Department has redirected the £36 …

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7 Feb 2024 | Committee report linked

This Committee has reported regularly on progress with the High Speed 2 programme over the last decade. Our first report was in 2013 and even at that early stage we were warning about an emerging pattern of costs increasing, benefits decreasing, and the apparent lack of the necessary commercial expertise to oversee the programme. We continued to report our concerns over the years, for example being critical about the lack of transparency over increasing costs, about some of the decisions take...

This Committee has reported regularly on progress with the High Speed 2 programme over the last decade. Our first report was in 2013 and even at that early stage we were warning about an emerging pattern of costs increasing, benefits …

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7 Feb 2024 | Committee report linked

The inclusion of an allowance for remediation costs if Phase 1 were to be discontinued, and the exclusion of sunk costs, had a significant impact on the calculation of a positive BCR in the range 1.1 to 1.8, and thus on the AO Assessment. In addition, the figures quoted for these elements are in 2019 prices and would be significantly higher in 2023 prices, though benefits would also be higher in 2023 terms.13 The Accounting Officer 6 HS2 6-monthly report to Parliament: November 2023 7 Q 15 8 ...

The inclusion of an allowance for remediation costs if Phase 1 were to be discontinued, and the exclusion of sunk costs, had a significant impact on the calculation of a positive BCR in the range 1.1 to 1.8, and thus …

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7 Feb 2024 | Committee report linked

The Department told us that a full, revised business case will need to be produced for Phase 1, taking account of what it now knows about costs, the changes to scope and what that means for the overall benefits.15 The Department said that key benefits remain – such as increased capacity, journey times and wider economic benefits from investment and regeneration around stations.16 But not building 2a and 2b reduces additional capacity and the possibility of faster journeys north of Birmingham,...

The Department told us that a full, revised business case will need to be produced for Phase 1, taking account of what it now knows about costs, the changes to scope and what that means for the overall benefits.15 The …

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7 Feb 2024 | Committee report linked

In its October 2023 Command Paper on Network North and its new plans for completion of Phase 1, the Department stated that “We need to make changes quickly and decisively so the remainder of HS2 is delivered as cost effectively as possible. That means: a) Bearing down on the costs of Phase 1 and only delivering what is essential. b) Embedding a singular focus on cost control in HS2 Ltd and its supply chain and being prepared to take difficult decisions on contracts, scope and benefits to hold...

In its October 2023 Command Paper on Network North and its new plans for completion of Phase 1, the Department stated that “We need to make changes quickly and decisively so the remainder of HS2 is delivered as cost effectively …

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7 Feb 2024 | Committee report linked

The cancellation of other HS2 phases will inevitably result in some design changes to Phase 1. HS2 Ltd told us that the top of its list is the implications for how HS2 trains will join the West Coast Main Line. HS2 trains would have joined the line north of Manchester if Phase 2a were being built. But in order to travel on HS2 trains through to Manchester, Liverpool and Scotland, HS2 trains will now need to join it at Handsacre, which is near Lichfield.35 Once the HS2 trains have joined the W...

The cancellation of other HS2 phases will inevitably result in some design changes to Phase 1. HS2 Ltd told us that the top of its list is the implications for how HS2 trains will join the West Coast Main Line. …

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7 Feb 2024 | Committee report linked

We asked the Department about the impact of cancelling HS2 Phases 2 on other projects that would have had existing business cases dependent in part on Phases 2a or 2b. The Department highlighted the interdependency between 2b and Northern Powerhouse Rail and said that it would be some time before it had a business case for the revised scope of that. It said that while some of the programmes within Network North were well established, it did not yet have a business case for some of the others.38

We asked the Department about the impact of cancelling HS2 Phases 2 on other projects that would have had existing business cases dependent in part on Phases 2a or 2b. The Department highlighted the interdependency between 2b and Northern Powerhouse …

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7 Feb 2024 | Committee report linked

We also asked whether any contracts would need to be cancelled in respect of Phase 2 and payments made to companies as a result. HS2 Ltd told us that for Phases 2a and 2b the number of contracts let was very small, but it was exposed to some legal challenge, the value of which exposure it estimated to be under £10 million.39

We also asked whether any contracts would need to be cancelled in respect of Phase 2 and payments made to companies as a result. HS2 Ltd told us that for Phases 2a and 2b the number of contracts let was …

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7 Feb 2024 | Committee report linked

Notwithstanding the Board and Director level changes referenced above, HS2 Ltd also acknowledged that it needed to think about its capacity and capability throughout to deliver the task ahead. It told us it was going through that process and highlighted three areas it needed to address: more people to focus on railway systems; more skills to bear 33 HS2 6-monthly report to Parliament: November 2023 34 Qq 64–66 35 Q 61; Department for Transport: NETWORK NORTH: TRANSFORMING BRITISH TRANSPORT, C...

Notwithstanding the Board and Director level changes referenced above, HS2 Ltd also acknowledged that it needed to think about its capacity and capability throughout to deliver the task ahead. It told us it was going through that process and highlighted …

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7 Feb 2024 | Committee report linked

In July 2023 we reported on how the Department’s previous plans for the HS2 station at Euston had proved to be unrealistic and unaffordable.42 Alongside the October 2023 cancellation of HS2 phases 2, the Department acknowledged that previous plans for the station had been unaffordable, and announced that the station design would be stripped back to focus on delivering a station that works and can be open as soon as possible. The Department announced that it “will deliver a new Euston Quarter ...

In July 2023 we reported on how the Department’s previous plans for the HS2 station at Euston had proved to be unrealistic and unaffordable.42 Alongside the October 2023 cancellation of HS2 phases 2, the Department acknowledged that previous plans for …

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7 Feb 2024 | Committee report linked

The Department confirmed to us that “At the moment we are expecting the private sector to fund the station and all the development. The benefit for developers comes from the commercial housing development.”44 It confirmed that this included looking for private funding to cover the whole cost of running from Old Oak Common to Euston.45 We noted that the Treasury had previously rejected the idea of Euston being privately funded; the Department replied that the Treasury stance had changed and th...

The Department confirmed to us that “At the moment we are expecting the private sector to fund the station and all the development. The benefit for developers comes from the commercial housing development.”44 It confirmed that this included looking for …

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7 Feb 2024 | Committee report linked

The Department confirmed it remains the Government’s ambition that Euston be the London terminus for HS2.48 But it confirmed it was still expecting trains to stop at Old Oak Common for a period of time before Euston was developed, because Euston would not be up and running in the same timeframe. The Department could not give any date or range of dates for when it thought Euston might be delivered.49

The Department confirmed it remains the Government’s ambition that Euston be the London terminus for HS2.48 But it confirmed it was still expecting trains to stop at Old Oak Common for a period of time before Euston was developed, because …

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7 Feb 2024 | Committee report linked

We raised concerns about the risk of incurring significant additional cost later if contracts for the tunnel between Old Oak Common and Euston were not let in the coming months. The Department said there were significant phasing issues of this nature 40 Q 129 41 Q 132 42 Committee of Public Accounts: HS2 Euston, 63rd Report of Session 2022–23, HC 1004, 7 July 2023 43 Department for Transport: NETWORK NORTH: TRANSFORMING BRITISH TRANSPORT, CP 946, October 2023 44 Q 147 45 Q 149 46 Qq 147, 164–...

We raised concerns about the risk of incurring significant additional cost later if contracts for the tunnel between Old Oak Common and Euston were not let in the coming months. The Department said there were significant phasing issues of this …

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7 Feb 2024 | Committee report linked

We raised the issue that private sector involvement and finding would be dependent on there being greater certainty on dealing with issues in and around Euston. The state of the general property market in the area and how much infrastructure the public sector provides will be critical factors in how much the private sector will pay for the whole site. The Department said it had started to discuss with Treasury Colleagues, the IPA and DLUHC how to start turning this into a proposition that wou...

We raised the issue that private sector involvement and finding would be dependent on there being greater certainty on dealing with issues in and around Euston. The state of the general property market in the area and how much infrastructure …

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7 Feb 2024 | Committee report linked

The Department has said that the decision not to proceed with HS2 phases 2a, 2b and East will unlock £36 billion (2023 prices) and that “every penny of the £19.8 billion committed to the Northern leg of HS2 will be reinvested in the North; every penny of the £9.6 billion committed to the Midlands leg will be reinvested in the Midlands; and the full £6.5 billion saved through our new arrangements for Euston will be spread across every other region in the country. This will be money additional ...

The Department has said that the decision not to proceed with HS2 phases 2a, 2b and East will unlock £36 billion (2023 prices) and that “every penny of the £19.8 billion committed to the Northern leg of HS2 will be …

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7 Jul 2023 | Committee report linked

The £2.6 billion budget set in 2020 proved to be completely unrealistic for what the Department wanted to deliver. In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd set a £2.6 billion budget for Euston. This budget was below HS2 Ltd’s early estimated cost for the station of £3 billion. Later, more detailed estimates showed that the costs were likely to be significantly higher, with the 11-platform design forecast to cost £4.4 billion in Jun...

The £2.6 billion budget set in 2020 proved to be completely unrealistic for what the Department wanted to deliver. In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd set …

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7 Jul 2023 | Committee report linked

The Department does not yet know the costs and impacts of pausing construction. Neither the Department nor HS2 Ltd know the likely costs of pausing construction work for the next two years. They had been developing funding scenarios for the HS2 programme since the 2022 Autumn Statement but, with the decisions now made, HS2 Ltd still needs to work with its supply chain and with the local community to determine the full extent of costs and impacts. This would include making the site safe and po...

The Department does not yet know the costs and impacts of pausing construction. Neither the Department nor HS2 Ltd know the likely costs of pausing construction work for the next two years. They had been developing funding scenarios for the …

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7 Jul 2023 | Committee report linked

Why the existing report was late and contained so little information

Why the existing report was late and contained so little information Type: conclusion | Number: 1 | Response status: accepted Government response: The government agrees with the Committee’s recommendation. develop an affordable Euston campus that maximises delivery of benefits against …

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7 Jul 2023 | Committee report linked

The Department has not yet learned lessons from managing major rail programmes. In previous examination of other rail programmes like Thameslink and the Great Western Railway modernisation we have reported very similar problems to the ones we are now seeing again with Euston. The Department and HS2 Ltd say that they are learning lessons from other programmes such as Crossrail. But that there is more for them to do for example, on cost estimation, the treatment of contingency and managing the ...

The Department has not yet learned lessons from managing major rail programmes. In previous examination of other rail programmes like Thameslink and the Great Western Railway modernisation we have reported very similar problems to the ones we are now seeing …

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7 Jul 2023 | Committee report linked

We asked the Department to give us an indication of what a reduced design for Euston station might look like. The Department told us that it would need to examine two options before it could come to the right solution: the minimum station option that would support passenger services and meet requirements; and the value maximisation option of, for example, investing more in an integrated station and more in over-site development. In the example of a minimum station option, the Department said ...

We asked the Department to give us an indication of what a reduced design for Euston station might look like. The Department told us that it would need to examine two options before it could come to the right solution: …

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7 Jul 2023 | Committee report linked

The Department told us that it wanted to look at all elements of the design to see where the opportunities are to deliver something that prioritises passenger benefits and wider benefits of the scheme, but also reduces costs.14 It plans to use the pause in construction to determine the minimum requirements for the station and make decisions about what should be prioritised for the design to be affordable but still maximise value.15 Budget and cost estimates

The Department told us that it wanted to look at all elements of the design to see where the opportunities are to deliver something that prioritises passenger benefits and wider benefits of the scheme, but also reduces costs.14 It plans …

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7 Jul 2023 | Committee report linked

In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd planned to design and build the HS2 Euston station for £2.6 billion. This budget was lower than its £3 billion assessment of what the station would actually cost to build.16 We asked HS2 Ltd why it accepted a budget for the station that was so much lower than its estimate of what it would actually cost. HS2 Ltd told us that its estimate was based on a very high-level concept design and that ...

In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd planned to design and build the HS2 Euston station for £2.6 billion. This budget was lower than its £3 billion …

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7 Jul 2023 | Committee report linked

HS2 Ltd told us that there was pressure to drive the overall HS2 cost to what was deemed to be an affordable point. It viewed the £2.6 billion as a budget to work towards and undertook a lot of work on affordability and efficiencies to try and reduce costs. It told us that it generated somewhere between £300 million and £500 million of efficiencies.20

HS2 Ltd told us that there was pressure to drive the overall HS2 cost to what was deemed to be an affordable point. It viewed the £2.6 billion as a budget to work towards and undertook a lot of work …

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7 Jul 2023 | Committee report linked

Later, more detailed estimates showed that the costs were likely to be significantly higher, with the 11-platform design forecast to cost as much as £4.4 billion in June 2020, and the revised 10-platform design estimated to cost £4.8 billion in March 2023.21 The Department told us that it needs to try to work out what the right next step is, what the right options are to consider and how it gets to a better outcome.22 It intends to look at whether and where it may be appropriate to make some ...

Later, more detailed estimates showed that the costs were likely to be significantly higher, with the 11-platform design forecast to cost as much as £4.4 billion in June 2020, and the revised 10-platform design estimated to cost £4.8 billion in …

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7 Jul 2023 | Committee report linked

In March 2023, following an announcement by the Secretary of State for Transport, the Department paused new construction work on the HS2 Euston station for the next two years to reduce spend over that period and to give it time to develop an affordable and deliverable design.24 The Department and HS2 Ltd do not yet know the cost of pausing construction. When asked about how much that would be, both the Department and HS2 Ltd referred to the £2 billion spend to date at Euston and the surroundi...

In March 2023, following an announcement by the Secretary of State for Transport, the Department paused new construction work on the HS2 Euston station for the next two years to reduce spend over that period and to give it time …

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7 Jul 2023 | Committee report linked

We asked the Department if Ministers had looked at the impact on businesses when they made the decision to pause construction. The Department told us that the decisions Ministers were trying to make were about trying to protect the supply chain as far as they could and that this was an important part of the advice that was being given to Ministers as they considered options.30 HS2 Ltd told us that it had been working with the Department to develop various funding scenarios and best options fo...

We asked the Department if Ministers had looked at the impact on businesses when they made the decision to pause construction. The Department told us that the decisions Ministers were trying to make were about trying to protect the supply …

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7 Jul 2023 | Committee report linked

We asked HS2 Ltd whether it was receiving notifications from contractors of their intentions to make contractual claims due to the pause. HS2 Ltd told us that this was not the case and that it is in discussion with contractors about how it can slow down or defer works, and agree the mechanism by which it will resurrect the work when the funding becomes available to do so.33 HS2 Ltd also told us that the funding settlement it has agreed with the Department for the next two years includes its e...

We asked HS2 Ltd whether it was receiving notifications from contractors of their intentions to make contractual claims due to the pause. HS2 Ltd told us that this was not the case and that it is in discussion with contractors …

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7 Jul 2023 | Committee report linked

We heard concerns from the London Borough of Camden and Drummond Street Traders, who already face many years of disruption, and impact of the pause in construction on local residents and businesses and be absolutely transparent when it is possible to do so on what the revised timetable involves.35 We asked HS2 Ltd about the extended disruption and how it is engaging with the local community. It told us that it continues to have a lot of interaction with Camden residents and the local authorit...

We heard concerns from the London Borough of Camden and Drummond Street Traders, who already face many years of disruption, and impact of the pause in construction on local residents and businesses and be absolutely transparent when it is possible …

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7 Jul 2023 | Committee report linked

The Department has continued to report that the cost pressure at Euston was £0.4 billion throughout its six-monthly updates, including in the October 2022 update, which was the latest at the time we took evidence.46 Since October 2021, with the Department’s decision to change the design of the station to a smaller and less complex 10 platform single-stage build, the Department has stated that it expected that the cost pressure would be reduced.47 The Department also reported throughout 2022 i...

The Department has continued to report that the cost pressure at Euston was £0.4 billion throughout its six-monthly updates, including in the October 2022 update, which was the latest at the time we took evidence.46 Since October 2021, with the …

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7 Jul 2023 | Committee report linked

The Department’s failures around budgeting, cost estimation and integration on the Euston project are not new. We have reported on these as part of our examination of other major rail programmes over the years. For example, on the Thameslink Programme, this committee found in 2018 that Network Rail did not have enough contingency within its budget for the redevelopment of London Bridge station, where costs rose from the condition and complexity of the site.60 This committee also reported abou...

The Department’s failures around budgeting, cost estimation and integration on the Euston project are not new. We have reported on these as part of our examination of other major rail programmes over the years. For example, on the Thameslink Programme, …

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7 Jul 2023 | Committee report linked

We concluded in our 2021 progress update on Crossrail that the Department had still not demonstrated that it is embedding lessons learned into its major programmes.62 When we asked the Department again about learning lessons, the Department and HS2 Ltd told us that they are learning from Crossrail, such as around programme and system integration and that there is a clear audit trail demonstrating how lessons have been applied.63 The Department also believed that the earlier identification of ...

We concluded in our 2021 progress update on Crossrail that the Department had still not demonstrated that it is embedding lessons learned into its major programmes.62 When we asked the Department again about learning lessons, the Department and HS2 Ltd …

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7 Jul 2023 | Committee report linked

In terms of what it has learned from Euston, the Department told us that there are lessons on cost estimation, the treatment of contingency and managing integration on large and complex stations. These are all issues we have seen before on other major programmes, including those overseen by the Department. It also added that over the next two years it will learn about the challenges of pausing works and then restarting them. HS2 Ltd considered that learning from Euston will be most relevant a...

In terms of what it has learned from Euston, the Department told us that there are lessons on cost estimation, the treatment of contingency and managing integration on large and complex stations. These are all issues we have seen before …

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7 Jul 2023 | Committee report linked

In comparison the Department and HS2 Ltd noted that other HS2 stations may be less complex or already more advanced in their progress than Euston, such as Curzon Street in Birmingham, where HS2 Ltd told us that the civil works is 40% complete. In the case of the more advanced stations, the Department also believes that it will be able to draw out from them more accurate information, such as construction costs, to help better manage later phases of the programme.68 HS2 Ltd also saw an importan...

In comparison the Department and HS2 Ltd noted that other HS2 stations may be less complex or already more advanced in their progress than Euston, such as Curzon Street in Birmingham, where HS2 Ltd told us that the civil works …

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27 Jul 2022 | Committee report linked

We welcome the scale of the Government’s promised spending on improving rail in the North and the Midlands. £96 billion is a very substantial sum; it has the potential to transform rail travel for future generations and make a significant contribution to levelling up the country.

We welcome the scale of the Government’s promised spending on improving rail in the North and the Midlands. £96 billion is a very substantial sum; it has the potential to transform rail travel for future generations and make a significant …

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27 Jul 2022 | Committee report linked

Nonetheless, there is still a need for prioritisation and hard choices, and the proposals set out in the Integrated Rail Plan have already left some towns and cities very disappointed. It is crucial that the Government bases its decisions on how to spend this investment on the fullest possible evidence for what will bring the greatest overall benefit to rail services, to the economy, to the environment and to communities across the North and Midlands.

Nonetheless, there is still a need for prioritisation and hard choices, and the proposals set out in the Integrated Rail Plan have already left some towns and cities very disappointed. It is crucial that the Government bases its decisions on …

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27 Jul 2022 | Committee report linked

Whilst we recognise that the Golborne link was not perfect, and faced substantial local opposition, given its importance in terms of unlocking capacity for passengers and freight, and reducing journey times to Scotland, we are concerned that it has been cancelled without an alternative being proposed. The Department for Transport should set out alternative plans which add similar capacity as a minimum by March

Whilst we recognise that the Golborne link was not perfect, and faced substantial local opposition, given its importance in terms of unlocking capacity for passengers and freight, and reducing journey times to Scotland, we are concerned that it has been …

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27 Jul 2022 | Committee report linked

The failure to calculate an updated benefit-cost ratio (BCR) raises questions over whether the case for changes to the HS2 Eastern leg have been properly assessed. It is concerning that the Government would make a decision on such an important infrastructure project before having done the BCR calculations to fully understand and substantiate that decision. This is particularly so given previous BCR calculations suggested that the economic case for the Eastern leg was stronger than that for th...

The failure to calculate an updated benefit-cost ratio (BCR) raises questions over whether the case for changes to the HS2 Eastern leg have been properly assessed. It is concerning that the Government would make a decision on such an important …

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27 Jul 2022 | Committee report linked

To take account of the changes of plan for the HS2 Eastern leg and to inform current and future decision-making, the Department for Transport should publish by March 2023 an updated BCR for (a) the entire HS2 project and (b) the previous full proposals for the Eastern leg of HS2 Phase 2b. The methodology used must fully reflect impacts on regional inequalities.

To take account of the changes of plan for the HS2 Eastern leg and to inform current and future decision-making, the Department for Transport should publish by March 2023 an updated BCR for (a) the entire HS2 project and (b) …

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27 Jul 2022 | Committee report linked

The Government must remain open to the possibility that this thorough reassessment of the evidence base, taking full account of the impact on levelling up communities in the North and Midlands, may show that Options 2 or 3 for Northern Powerhouse Rail represent the best potential value. If so, they must grasp that nettle. Extra costs are not to be incurred lightly, but a significantly better outcome for our economy and communities is a worthwhile investment for generations into the future.

The Government must remain open to the possibility that this thorough reassessment of the evidence base, taking full account of the impact on levelling up communities in the North and Midlands, may show that Options 2 or 3 for Northern …

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27 Jul 2022 | Committee report linked

The potential of Bradford as an engine room of the Northern Powerhouse may be squandered if it is not given opportunities to thrive through better connectivity. Direct high speed connections would give the city access to a much broader pool of labour, as well as allowing other cities to benefit from the talent and potential of its own residents. Leaving such a large and dynamic city behind would undermine the project of levelling up the country. Better public transport is essential to encoura...

The potential of Bradford as an engine room of the Northern Powerhouse may be squandered if it is not given opportunities to thrive through better connectivity. Direct high speed connections would give the city access to a much broader pool …

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27 Jul 2022 | Committee report linked

A full assessment of the levelling up impact of the various NPR and HS2 Eastern leg options does not appear to have been carried out to date. The Government must ensure that the impact of NPR decisions on Bradford in particular is robustly assessed, including producing BCR analyses for all NPR options. This is consistent with the spirit of commitments previously made by the Prime Minister to investigate all the options for Northern Powerhouse Rail, and to allow the lead on what comes next to ...

A full assessment of the levelling up impact of the various NPR and HS2 Eastern leg options does not appear to have been carried out to date. The Government must ensure that the impact of NPR decisions on Bradford in …

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27 Jul 2022 | Committee report linked

We welcome the Government’s pledge to look at how the Eastern leg of HS2 might be constructed in full to Leeds as originally planned; the city is a key focal point not only of existing rail networks, but of economic value and potential in the North.

We welcome the Government’s pledge to look at how the Eastern leg of HS2 might be constructed in full to Leeds as originally planned; the city is a key focal point not only of existing rail networks, but of economic …

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27 Jul 2022 | Committee report linked

The Government must conduct its study on how best to take HS2 to Leeds urgently. We ask that a timetable for this work, including a firm date for the final report, be published by September 2022. This is essential for demonstrating that the commitment made to Leeds for high speed connections will be fulfilled. (Paragraph 47) Stations and cities

The Government must conduct its study on how best to take HS2 to Leeds urgently. We ask that a timetable for this work, including a firm date for the final report, be published by September 2022. This is essential for …

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27 Jul 2022 | Committee report linked

The redevelopment of Leeds station is key to fully realising the benefits of the Integrated Rail Plan on the economy and connectivity in Leeds and West Yorkshire, and more widely. Already over capacity in its current configuration, Leeds station will not be able to handle the increased services and passengers generated by the IRP, and this will continue to have knock-on effects elsewhere in the network. We are also conscious of the economic potential of the huge amount of land that cannot be ...

The redevelopment of Leeds station is key to fully realising the benefits of the Integrated Rail Plan on the economy and connectivity in Leeds and West Yorkshire, and more widely. Already over capacity in its current configuration, Leeds station will …

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27 Jul 2022 | Committee report linked

If the underground station option were to be deemed deliverable, it could unlock significant land value in the city; it would then be reasonable to expect contributions to the cost from local government and local businesses. We recommend that this expectation should form part of a renewed, transparent conversation about the risks and benefits of the underground station option between Transport for Greater Manchester, Manchester City Council and the Department for Transport.

If the underground station option were to be deemed deliverable, it could unlock significant land value in the city; it would then be reasonable to expect contributions to the cost from local government and local businesses. We recommend that this …

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27 Jul 2022 | Committee report linked

Birmingham stands to benefit from the new HS2 station at Curzon Street, and the easing of capacity constraints at New Street by services moving to Moor Street station. One last piece of the puzzle appears to be facilitating connections from Moor Street towards Leicester by providing the eastern chord. We urge the Government to commit to this element as part of the review of the Midlands Rail Hub. (Paragraph 73) Realising the benefits

Birmingham stands to benefit from the new HS2 station at Curzon Street, and the easing of capacity constraints at New Street by services moving to Moor Street station. One last piece of the puzzle appears to be facilitating connections from …

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27 Jul 2022 | Committee report linked

Journey time reductions—albeit not to the same degree as promised by previous plans—are a headline benefit of the IRP. We received detailed evidence that cast doubt on the plausibility of the times achievable under the new plans. We ask the Government to publish its full technical appraisals of the feasibility of these reductions, so that communities and stakeholders can have confidence that they are achievable in practice. (Paragraph 87) 36 The Integrated Rail Plan for the North and Midlands

Journey time reductions—albeit not to the same degree as promised by previous plans—are a headline benefit of the IRP. We received detailed evidence that cast doubt on the plausibility of the times achievable under the new plans. We ask the …

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27 Jul 2022 | Committee report linked

The Government’s fixation on journey times as a benefit of the IRP must not overshadow the issue of capacity. It seems highly unlikely that an upgraded Victorian line can replicate the capacity increases achievable by building new track.

The Government’s fixation on journey times as a benefit of the IRP must not overshadow the issue of capacity. It seems highly unlikely that an upgraded Victorian line can replicate the capacity increases achievable by building new track. Type: conclusion …

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27 Jul 2022 | Committee report linked

The Department for Transport should commission a full independent assessment of the seat and track capacity offered by the IRP, compared to the previous plans for HS2 and other options for NPR. This assessment must take into account the future effects on both long-distance and local passenger services, and freight capacity.

The Department for Transport should commission a full independent assessment of the seat and track capacity offered by the IRP, compared to the previous plans for HS2 and other options for NPR. This assessment must take into account the future …

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27 Jul 2022 | Committee report linked

The Government has put together a strong case for the Integrated Rail Plan, but it is based on a best-case scenario which may not come to pass. Cost and time overruns for major infrastructure projects are commonplace, and disruption can be extensive and unforeseen. The promised journey time improvements may not be achievable in practice, and the decision to replace some plans for new high-speed lines with upgrades will limit capacity gains. We urge the Government to produce more cautious esti...

The Government has put together a strong case for the Integrated Rail Plan, but it is based on a best-case scenario which may not come to pass. Cost and time overruns for major infrastructure projects are commonplace, and disruption can …

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29 Oct 2021 | Committee report linked

We are concerned that TfL and the Department do not have a plan to maximise the long-term, wider economic benefits of Crossrail. When open, the Elizabeth line should increase capacity in central London by around 10%, reduce journey times, improve connectivity and be a fully accessible railway. TfL expects the Elizabeth line to contribute towards its net zero objectives by getting cars off the road. Since 2010, the Department and TfL have referred to Crossrail resulting in £42 billion of benef...

We are concerned that TfL and the Department do not have a plan to maximise the long-term, wider economic benefits of Crossrail. When open, the Elizabeth line should increase capacity in central London by around 10%, reduce journey times, improve …

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29 Oct 2021 | Committee report linked

The Department and TfL told us that, when the Elizabeth line opens, they expect it to increase rail capacity in central London by around 10%, reduce journey times, and be fully accessible.50 These were the transport benefits set out in the last published business case in 2011.51 TfL explained that the extra capacity would be useful as we emerge from the pandemic as the large stations and spacious trains would enable social distancing. Journey times to key destinations would significantly redu...

The Department and TfL told us that, when the Elizabeth line opens, they expect it to increase rail capacity in central London by around 10%, reduce journey times, and be fully accessible.50 These were the transport benefits set out in …

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29 Oct 2021 | Committee report linked

The Department told us that Crossrail had completed a property and regeneration study looking at 2008 to 2016 which identified some 90,000 homes and four million square feet of office space resulting from Crossrail. It also noted plans in place for 12 major developments around the Elizabeth line stations and Crossrail sites, such as 3,700 new homes at the Royal Arsenal site in Woolwich. The Department said it would do formal evaluations of Crossrail at two year and five year stages, and has s...

The Department told us that Crossrail had completed a property and regeneration study looking at 2008 to 2016 which identified some 90,000 homes and four million square feet of office space resulting from Crossrail. It also noted plans in place …

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22 Sep 2021 | Committee report linked

The Department has made little progress on the design and delivery at Euston since we last reported, and we remain concerned that time is running out. Euston station is a key element of the programme both as the London terminus for High Speed 2 and a link to existing railway network and London Underground. We raised concerns over the lack of clarity of the design and delivery of Euston station in our May 2020 report, but the Department has made no final decisions 6 HS2 Summer 2021 since then....

The Department has made little progress on the design and delivery at Euston since we last reported, and we remain concerned that time is running out. Euston station is a key element of the programme both as the London terminus …

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22 Sep 2021 | Committee report linked

We are increasingly concerned that the Department and HS2 Ltd do not yet know how they will turn the benefits promised from High Speed 2 into a reality, including what additional investments will be needed or how these will be funded. The Department claims that High Speed 2 is a catalyst for investment, jobs and growth but also acknowledges that it needs to focus on making sure that the programme achieves what is intended. The Department needs to turn those intentions into a plan that brings ...

We are increasingly concerned that the Department and HS2 Ltd do not yet know how they will turn the benefits promised from High Speed 2 into a reality, including what additional investments will be needed or how these will be …

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22 Sep 2021 | Committee report linked

Following our evidence session, HS2 Ltd wrote to us and set out the high-level schedule and associated budgets (including contingency) for Phase 1 activities discussed at the session. These are set out in the table below: Phase 1 activity Budget (including Estimated duration of contingency) (£ billion) activity Civil engineering 15.5 2020–2026 Stations (excluding Euston) 2.7 2021–2028 Euston station 2.6 TBC Systems 3.6 2025 – 2028 Commissioning11 2028 – 2030 The remaining Phase 1 budget is al...

Following our evidence session, HS2 Ltd wrote to us and set out the high-level schedule and associated budgets (including contingency) for Phase 1 activities discussed at the session. These are set out in the table below: Phase 1 activity Budget …

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22 Sep 2021 | Committee report linked

The Government’s latest range of estimated costs for Phase 1 is £35–45 billion (2019 prices).12 For Phase 2a the range is £5.2–7.2 billion (2019 prices). The latest updated 6 Committee of Public Accounts, High Speed 2: Spring 2020 update, Third Report of Session 2019–21, HC 84, 17 May 2020, conclusions 1 and 2; para 6; HM Treasury, Treasury Minutes, CP 270, July 2020 7 Qq 5–6 8 Qq 5, 15, 17 9 Written statement to Parliament, HS2 6-monthly report to Parliament: March 2021, 23 March 2021 10 Q 1...

The Government’s latest range of estimated costs for Phase 1 is £35–45 billion (2019 prices).12 For Phase 2a the range is £5.2–7.2 billion (2019 prices). The latest updated 6 Committee of Public Accounts, High Speed 2: Spring 2020 update, Third …

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22 Sep 2021 | Committee report linked

The construction of the main civil engineering components of the programme (such as tunnels and viaducts) is a major undertaking and was a major cause of delays and cost increases at the time of our last report.16 In a letter following our evidence session, HS2 Ltd informed us that it had now contracted all the civil construction work, worth £15.5 billion, of which it had paid approximately £2.5 billion. It told us that the estimated total cost of all four stations for Phase One would be just...

The construction of the main civil engineering components of the programme (such as tunnels and viaducts) is a major undertaking and was a major cause of delays and cost increases at the time of our last report.16 In a letter …

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22 Sep 2021 | Committee report linked

In our May 2020 report, we raised our concerns over the huge uncertainty remaining for Euston station, specifically the lack of clarity around the station build. The Department and HS2 Ltd told us at the time that although the design of Euston was ready for planning consent, they were looking into more cost-effective solutions for the station. We recommended that the Department should write to us within six months of our report to provide us more detail of its plans, including how it would be...

In our May 2020 report, we raised our concerns over the huge uncertainty remaining for Euston station, specifically the lack of clarity around the station build. The Department and HS2 Ltd told us at the time that although the design …

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22 Sep 2021 | Committee report linked

The Department detailed some of the work it has been undertaking since early 2020 to find cost savings at Euston. This included: a review of the proposed tracks and tunnelling at Euston, which confirmed the existing approach was justified; an assessment of the station design, which might lead to a smaller station being built in a single stage; and, opportunities for further integration with Network Rail, such as sharing entrances to the London Underground and combining construction programmes...

The Department detailed some of the work it has been undertaking since early 2020 to find cost savings at Euston. This included: a review of the proposed tracks and tunnelling at Euston, which confirmed the existing approach was justified; an …

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22 Sep 2021 | Committee report linked

The Department acknowledged that Euston is a “very urgent and immediate challenge”. HS2 Ltd similarly noted that decisions on the final options are time-bound, and that it was concerned that the programme will “literally run out of time”.33 HS2 Ltd explained that it was setting up Old Oak Common as the terminus for the railway when it first opens to decouple the delivery of this element of the programme from the risk of Euston.34 In our 2020 report we pointed out that Euston is an important t...

The Department acknowledged that Euston is a “very urgent and immediate challenge”. HS2 Ltd similarly noted that decisions on the final options are time-bound, and that it was concerned that the programme will “literally run out of time”.33 HS2 Ltd …

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22 Sep 2021 | Committee report linked

Both the Department and the West Midlands Combined Authority provided examples of how cities and regions that stand to benefit from High Speed 2 have ambitious plans for how to capitalise on the opportunity that High Speed 2 provides. For example, the development of public transport links in Birmingham and Wolverhampton, and the construction of new housing in Birmingham City Centre. The Department told us that there were examples of where benefits realisation work was happening, but that its ...

Both the Department and the West Midlands Combined Authority provided examples of how cities and regions that stand to benefit from High Speed 2 have ambitious plans for how to capitalise on the opportunity that High Speed 2 provides. For …

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22 Sep 2021 | Committee report linked

The creation of thousands of jobs is central to the Department and HS2 Ltd programme’s case for building the railway. The Department told us that the growth strategies of Greater Manchester and the West Midlands envisaged that the programme would bring up to 180,000 and 100,000 job respectively, plus around 65,000 jobs expected at Old Oak Common. It recognised, however, that it now needed to turn these expectations into a reality. While jobs created by investment in the areas that will benefi...

The creation of thousands of jobs is central to the Department and HS2 Ltd programme’s case for building the railway. The Department told us that the growth strategies of Greater Manchester and the West Midlands envisaged that the programme would …

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14 Jul 2021 | Committee report linked

The development of the HS2 programme in England could yield direct benefits to Welsh rail passengers if it is accompanied by enhancements to the North Wales mainline, including the upgrades at Chester and Crewe stations which will be required for full electrification of the North Wales mainline to proceed. We recommend that the UK Government, working in partnership with the Welsh Government, should prepare a full strategic case for the upgrade and electrification of the North Wales mainline. ...

The development of the HS2 programme in England could yield direct benefits to Welsh rail passengers if it is accompanied by enhancements to the North Wales mainline, including the upgrades at Chester and Crewe stations which will be required for …

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