Spending watchdog calls on government to rethink HS2 planning

The National Audit Office (NAO) has called on the government to rethink its HS2 strategy to avoid further failures.

A new report by the spending watchdog has asked the government to use the two-year works halt on the Euston leg to come up with a design “that is affordable, deliverable and value for money”.

Earlier this month, the Department for Transport (DfT) announced more delays in the planned high-speed railway line due to inflation. It also said that the latest cost estimate for the 10-platform design in Euston was £2.2bn over its original budget, bringing the total works estimate to £4.8bn.

In January 2020, NAO reported that the work at Euston was more complex than originally anticipated and that there was uncertainty over the HS2 station design.

An independent review raised concerns about the design of the HS2 Euston station and concluded that the existing design was unsatisfactory.

Increased costs in the long term

Although the two-year pause will see HS2 spending deferred in the short-term, NAO warned that it will lead to additional costs and potentially an overall increase in costs in the long-term. This is due to costs associated with stopping and restarting work, contractual changes, and managing the project for longer.

“Government is once again having to revise plans for Euston HS2,” said NAO head, Gareth Davies. “Clearly, the 2020 reset of the station design has not succeeded. DfT and HS2 Ltd have not been able to develop an affordable scope that is integrated with other activity at Euston, despite their focus on costs and governance since 2020. Recent high inflation has added to the challenge.

“The March 2023 announcement by the transport secretary pausing new construction work should now give DfT and HS2 Ltd the necessary time to put the Euston project on a more realistic and stable footing. However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially a more expensive project overall, and that will need managing closely.”

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