The UK’s High Speed 2 rail line faces fresh cost overruns and will be delayed by years, transport secretary Heidi Alexander said on Wednesday.
The Labour government also revealed that HS2 may initially have to run at slower speeds than expected to prevent even worse delays to its opening.
Alexander accused the previous Conservative government of mismanagement, detailing a litany of actions that ratcheted up the project’s price tag, including signing contracts when advised not to and spending £2bn on a northern leg of the project that it then cancelled.
She also cited allegations that “parts of the supply chain have been defrauding taxpayers”, which would be investigated as swiftly as possible. HS2 has previously admitted that it has begun an investigation into claims that one of its suppliers had charged overinflated rates for workers.
“Billions of pounds of taxpayers’ money have been wasted by constant scope changes, ineffective contracts and bad management,” Alexander told the House of Commons. “It’s an appalling mess. But it’s one we will sort out.”
The original price tag for the scheme was £30bn in 2010 for a line that would have connected London, Manchester and Leeds and was supposed to open by 2026.
The Financial Times revealed in December that the latest estimate was £80bn — in 2024 prices — for a much-reduced project that will only run to Birmingham.
The most recent estimate for completion was 2033 but that is now expected to slip into the mid or late 2030s.
The government separately on Wednesday published the findings of a review of the scheme by Mark Wild, chief executive of HS2 Ltd.
Wild has concluded that the project cannot be achieved on its latest timetable or its existing budget, although he has not yet given a new estimate on the price tag.
“He stated in no uncertain terms that the overall project, with respect to cost, schedule and scope, is unsustainable; based on his advice I see no route by which trains can be running by 2033 as planned,” said Alexander.
“He reveals costs will continue to increase, if not taken in hand, further outstripping the budget set by the previous government, and he cannot be certain that all cost pressures have yet been identified.”
The update was a reminder of Britain’s dismal record on delivering major projects — and came just hours before chancellor Rachel Reeves will on Thursday set out a 10-year infrastructure plan for Britain.
Alexander confirmed that the Labour government would not reinstate cancelled sections of the line.
“Phase 1 [which runs to Birmingham] could end up becoming one of the most expensive railway lines in the world,” she said. “It has been no less than a litany of failure.”
Gareth Bacon, shadow transport secretary, accepted that mistakes had been made in the delivery of HS2, with costs doubling. “It has long been apparent that HS2 was not going according to plan,” he said.
“We must learn from those mistakes, and we must not repeat them.”
HS2 was originally envisaged before 2010 by the then Labour government. In 2021 then Tory prime minister Boris Johnson axed the link to Leeds amid spiralling costs and delays. Two years later his successor Rishi Sunak made the decision to cancel the line to Manchester.
Alexander told MPs that the Johnson administration was advised in 2020 by the Oakervee review to renegotiate key contracts and hold off signing further ones — but the contracts continued to be signed.
She also claimed that Tory ministers commissioned two sets of designs for a Euston station — costing £250mn — that were both dropped.
The minister said a “Euston ministerial task force” set up by Sunak did not hold any meetings.
Alexander announced she had appointed Mike Brown, former commissioner of Transport for London, as the new chair of HS2 Ltd, replacing Jon Thompson.
She also announced the result of a separate review into the scheme by James Stewart, a former chair of infrastructure advisory at KPMG, into what wider lessons can be learnt from the HS2 debacle.
Stewart’s report identified a “deficit in capability and skills, with a fundamental lack of trust” between HS2 Ltd and the Department for Transport.
His report laid out 89 recommendations, including that HS2 should change its contracts to ensure providers deliver on time and under budget. “Lessons learnt will end the era of Britain as a laughing stock on delivering big infrastructure projects,” said one Labour aide.
Alexander also set out measures to enhance “oversight and accountability” on the project, including a “shareholder board” and a “programme and performance board”.
In his report Wild suggested that HS2 may have to open at “slightly reduced running speeds” at first in order to get off the ground more quickly.
Instead of running at top speeds of up to 225mph — which would require intensive testing over several years — the trains could begin at 200mph while the infrastructure is completed. Officials insisted this would still make the line as fast as any other high-speed route in Europe.
Wild also concluded that construction began too early on the scheme and that the HS2 Ltd company had not been set up to “actively” manage delivery of the project.
He also blamed factors including Brexit, the Covid pandemic and the Russia-Ukraine war for the rising costs of the project.
Wild, who will veto any executive bonuses for the last financial year, also panned HS2’s culture: “The organisation is too bureaucratic, process driven, and risk averse. It does not operate like an expert builder of a railway.”
The government will set out further details of how to proceed with the Euston interchange — which connects HS2 to London’s transport network — in Thursday’s “Infrastructure Plan”.
Chancellor Rachel Reeves announced in the autumn Budget that she would fund the necessary tunnelling work.
