HS2

DfT admits that controlling HS2 costs will be ‘challenging’

The DfT has admitted that controlling the costs of the HS2 project will be “challenging” and that the cost estimates of delivering Phase 2b will not be certain until 2019.

The news came from the department’s permanent secretary, Phillip Rutnam, in written evidence to support an ongoing Public Accounts Committee (PAC) inquiry on the Great Western Railway.

Rutnam said that the cost estimates of Phase 2b, whose preferred route was announced late last year, will become more certain as HS2 Ltd awards contracts this year to progress the design of Phase 2b.

“On the timing to secure assurance on the delivery of the identified potential efficiencies, the 2015 Spending Review set a budget for HS2 of £55.7bn,” Rutnam wrote in his evidence report.

“HS2 is an ambitious engineering project which will take many years to complete, and like any programme of this scale, controlling costs will be challenging, yet the government is committed to delivering HS2 within this budget.

“We continue to scrutinise HS2 Ltd’s cost estimates closely and will report revised estimates in the Outline Business Case when it is published in 2019 to support the Phase 2b hybrid Bill that we plan to deposit in Parliament at the same time.”

The government first announced its preferred Phase 2b route, which will travel from Crewe to Manchester and from the West Midlands to Leeds, in November last year.

The DfT is currently consulting on seven substantial changes to the route, including a new connection to Sheffield’s existing train station. The public consultation on the Sheffield route is due to end in March, with the government to publish its formal response later this year.

“We expect HS2 Ltd will be able to take advantage of experience and learn lessons from the Phase 1 and Phase 2a processes,” Rutnam added.

“Moreover, cost estimates will become more certain as HS2 Ltd awards contracts in 2017 to progress the design of Phase 2b in readiness for the deposit of the Phase 2b Hybrid Bill.”

The permanent secretary argued that the contracts should provide an “appropriate level of maturity” around the cost estimates for Phase 2b by the time that its business case is published in 2019.

Separately during the PAC hearing, which took place in 14 December, Phillip Boswell MP also asked Rutnam about the government’s strategy and plans for the necessary skills to deliver rail enhancements.

Rutnam highlighted the government’s announcement of its Transport Infrastructure Skills Strategy (TISS) in January 2016 which aims to create 30,000 apprenticeships within the rail and road sectors by 2020. The strategy will be directed by the industry-led Strategic Apprenticeship Taskforce, which was announced last April and is chaired by Mike Brown, commissioner of Transport for London.

The permanent secretary further explained that the TISS will be supported by the Rail Sector Skills Delivery Plan announced by the rail industry in December, which will look to develop training standards and encourage recruitment and retention in the sector.

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