New setback for HS2 as report claims complexity of scheme was underestimated
HS2 is over budget and behind schedule due to the Department for Transport (DfT), HS2 Limited and wider government underestimating its complexity according to a new report.
The National Audit Office (NAO) states that challenges to completing the programme and delivering value for taxpayers and end users remain.
This report follows the leak earlier this week of the independent Oakervee review. The report by the former HS2 Chairman suggested that the total cost for infrastructure could reach £106bn.
The NAO report also highlights cost increases and attributes them to the project being at an early stage and HS2 ltd’s failure to estimate a contingency that was appropriate.
With new forecasts showing the network operating fully between 2036 and 2040, three to seven years later than planned and costs spiralling the project has been plagued with doubt.
Phas 2b of the project from Birmingham to Leeds and Manchester, the report says will cost 63% more than the current available funding and total £41bn.
The report also identifies that the majority of benefits the infrastructure are in Phase 2b of the project. It calls on the DfT, HS2 and government to “to carefully balance decisions on the scope and costs of Phase Two as changes will impact on the benefits.”
Garerth Davies, head of the NAO said: “To ensure public trust, the Department and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain.”
A DfT spokesperson said: “The department has supported this review and is already acting on many of its recommendations. To ensure transparency around the project, we have worked closely with the NAO to provide information on the latest cost and schedule estimates for HS2.
“We recognise that there have been significant underestimations of both the cost and schedule of HS2 in the past, which is why we commissioned the Oakervee review to provide advice on whether and how to proceed with HS2.”
Matthew Fell, the CBI’s chief UK policy director, said: “HS2 is an ambitious project and the National Audit Office’s report usefully highlights the challenges of delivering large-scale infrastructure. But what is clear to the CBI, and business generally, is the colossal cost of not delivering HS2.
“If the government truly believes in levelling up the regions, especially the Midlands and the North, it should deliver HS2 in full.
“It is exactly the post-Brexit project the government should be championing.”
