The National Audit Office (NAO) has advised the UK government not to implement revised plans for the HS2 high-speed railway until it is confident the project can be delivered. In a report published today, the spending watchdog emphasized the need to place the project on a stable footing to avoid repeating past failures.
Cost and timeline overruns
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 an increase of £70 billion and a delay of 13 years compared to original promises. The entire project may not be completed until 2043.
Initially, constructing HS2 from London to Birmingham, along with the now-abandoned legs to Leeds and Manchester, was estimated at £32.7 billion (2011 prices). Services were originally scheduled to begin this year. The latest cost estimate is roughly double the figure from 2020.
Reset process and NAO concerns
Following a 15-month review, HS2 Ltd Chief Executive Mark Wild developed a new detailed plan for the remaining work. The NAO acknowledged a “considered approach” to resetting HS2 but noted that “significant work” remains. The Department for Transport (DfT) and HS2 Ltd aim to complete the reset by spring 2027, with an estimated cost of £153 million.
The NAO stated: “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 also recommended that the DfT and HS2 Ltd review the “realistic” nature of the new timetable by autumn and revise it if necessary.
Reasons for cost increases
According to the NAO, most cost increases stem from “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, said: “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 added: “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.”
