Fears emerge over Manchester leg of HS2 as inflation hits build costs

Fears for the Northern leg of HS2, between Crewe and Manchester, have been raised.

Mark Thurston, HS2 CEO, has told the BBC that he is working with the Government to consider the project’s timing and phasing, in a bid to cut costs in the face of spiralling inflation for building materials, labour and energy costs.

The project, to link London with the North, was scheduled to cost £33bn, but the latest estimate prices the scheme at £71bn, with fears that it could exceed £100bn.

The first phase between London and Birmingham is 40% complete and HS2 trains are due to carry their first passengers between Old Oak Common station in West London and Birmingham, between 2029 and 2033.

But the Northern leg is under increasing scrutiny. Much of the Eastern leg to Leeds was scrapped in the 2021 Integrated Rail Plan, and there has been speculation the Government could decide to axe remaining plans for a high speed line between the West and East Midlands.

The link between Crewe and Manchester is due between 2034 and 2041.

Regarding cost cutting measures, which could include significant delays to the project, Mr Thurston said: “We’re looking at a number of options with the Department for Transport.”

He added: “We’re looking at the timing of the project, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation.”

A Government spokesperson said it continued to carry out regular reviews of the scope, schedule and cost of the project to ensure it delivered value for money.

However, Northern transport chiefs believe the Manchester link will be delivered. Speaking on Radio 4 this morning, Northern Powerhouse Partnership chief executive, Henri Murison, said: “The Government’s challenge, whether it’s this project, or new hospitals, or offshore wind, is all of these projects are going up in price.

“I’m absolutely focused on making sure that we deliver infrastructure that will raise productivity across the UK.

“I think it’s a fake debate, stirred up by those on the right of the Tory Party to fixate on the costs of this one project.

“These issues apply across the board and if we don’t invest in our infrastructure then we’ll never raise UK productivity and compete globally – yes we need to control costs across the public sector, but where we need to invest more to get the things we need if it’s in the economic interests of the country.”

He added: “The reason I’m confident is because the current Chancellor, and the woman most likely to be the next Chancellor, agree with me, and I’m confident in HS2 getting to Manchester and in Northern Powerhouse rail across the Pennines, which is also critical for UK productivity.”

Last week, The Northern Transport Summit 2023 was held at Liverpool’s, Mersey Maritime Museum, where Labour’s Shadow Secretary of State for Transport, Louise Haigh, vowed a Labour government would deliver bold rail improvement plans for the North in full, including HS2.

Investment in transport is fundamental, she said, adding: “A future Labour government will deliver NPR (Northern Powerhouse Rail) and HS2, in full.

“This investment is a down payment on the century ahead and good green jobs of the future.”

On the latest HS2 development today, she said: “Tens of thousands of jobs, and billions in economic growth are dependent on this project. Ministers need to own up and explain why critical decisions … are being delayed.”