Key facts
- The NAO advised ministers to delay implementing revised HS2 plans until delivery confidence is high.
- HS2's cost is now estimated up to £102.7bn, with completion potentially delayed until 2043.
- The NAO estimated the cost of the reset process at £153m.
- Past failures, cost underestimation, inefficient delivery, and scope changes were cited as reasons for cost increases.
- The Department for Transport and HS2 Ltd aim to complete the reset by spring 2027.
Revised plans for the HS2 high-speed rail project should not be implemented until the government is confident they can be delivered, according to a report by the National Audit Office (NAO).
The public spending watchdog stated that the project must be put on a stable footing to avoid a repeat of past failures. Last month, Transport Secretary Heidi Alexander announced that the scheme's cost could rise to £102.7bn, with trains between London and Birmingham not starting until as late as 2039, a delay of 13 years and an increase of £70bn from original projections. The entire project is now expected to be completed by 2043.
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" is still required. The Department for Transport (DfT) and HS2 Ltd aim to complete the reset by spring 2027, but the NAO stressed the importance of getting it right this time after previous missteps.
The NAO recommended that the DfT and HS2 Ltd review the realism of the new timetable in autumn and revise it if necessary. The cost of the reset process itself is estimated at £153m. The initial cost estimate for HS2 from London to Birmingham, including now-abandoned onward legs, was £32.7bn at 2011 prices, with the latest estimate roughly double that of 2020. Services were originally scheduled to begin this year, but the Manchester leg was cancelled in October 2023 by then-Prime Minister Rishi Sunak. The NAO attributed most cost increases to "cost underestimation, inefficient delivery and scope changes."
Gareth Davies, head of the NAO, emphasized the necessity of establishing a robust cost and schedule estimate, completing commercial negotiations, and securing the right capabilities before the reset can be finalized. A DfT spokesperson stated that the government has taken decisive action to reset HS2 following years of mismanagement, aiming for safe delivery of the Birmingham to London line at the lowest reasonable cost. They added that the reset is driving faster, more efficient construction, with six major milestones reached ahead of schedule last year.
A spokesperson for HS2 Ltd commented that fundamentally resetting the project was the only way to regain control and break the cycle of poor delivery, delays, and cost increases. They described the task as hugely complex, requiring extensive external expertise, and noted it has been carried out alongside increased productivity across the 140-mile construction program. HS2 Ltd believes the costs associated with the reset will ultimately pay for themselves through improved management and efficiencies.