Latest Rail News

23.10.17

HS2 preparation works ran £200m under budget, says DfT

Spending on preparation for HS2 went over £200m under budget, according to a report by the Department for Transport.

The High Speed Rail (Preparation) Act 2013 Expenditure Report, which details the total spending for the period from 1 April 2016 to 31 March 2017, states that there was a total underspend of 30%.

The total budget for preparation of the project last year was £770.1m, with the whole project set to cost around £56bn in total. 

HS2 ltd preparation spending was £30.6m under its budget of £376.1m, and the DfT’s Land and Property acquisitions expenditure was 51% under its budget of £395m - an underspend of £202.5m.

Phase One spending is included until 28 February 2017 as this fell outside the scope of the Preparation Act following the Phase One hybrid Bill, which received Royal Assent in February 2017.

The report identifies this as the principal driving force for HS2 Ltd.’s 8% underspend, as the budget ran until March.

The spending for design activity had an annual budget of £38.3m and saw an underspend of 25% due to delays in commencing the Railway Systems reference design, led by HS2 Ltd’s technical directorate and its railway operations strategy.

Total expenditure for surveying and ground investigations was 15% under its budget of £56.6m, which the report attributes to reaching a lower number of access agreements than was required to conduct the planned environment surveys, with remaining surveys scheduled for 2017/18.

The enabling works’ spending was almost on budget, with an underspend of just £0.3m, which has ensured the first two utility diversions have been undertaken, proposals have been agreed with utility companies, design solutions have been found for how the new network will interface with the existing one.

Corporate support costs were £2.5m under an annual budget of £128.9m, and project management saw an underspend of £5m below its £63.9m budget, both of which are attributed to February’s Royal Assent.

Land and property acquisitions saw an underspend of 51% less than an annual budget of £394m, which was primarily due to a delay in completing the acquisition of large-scale commercial properties prior to Royal Assent, according to the report.

It is not anticipated that the variances in spending will impact on the funding established in the Spending Review 2013 and updated in the Spending Review 2015.

Comments

Andrew JG   24/10/2017 at 00:55

Another major set back. Great!

PP   24/10/2017 at 08:43

Andrew, please stop commenting on things you don't understand. It's saying that work was completed for less money than budgeted. This is NOT a setback, it's a good thing.

J, Leicester   24/10/2017 at 12:04

You couldn't make it up, PP!

Adrian N   24/10/2017 at 12:13

I read it as qualified good news. What this press release highlights is several "savings" due to delays in doing stuff. Which just means playing catch-up in future years.

Brad RW   24/10/2017 at 12:53

I have tried on many occasions to communicate and engage with HS2 - I have highlighted a number of initiatives they have completely overlooked to guarantee to save them many thousands, not once have they responded! Must have more money than sense or obviously do not need to save any more than they are doing now?

Peter Jarvis   24/10/2017 at 14:00

Principal rather than principle, perhaps. The wonders of spell-checks.... We built 25 miles of railway in Wales for about £25million, but we realise that is economical by the usual standards. Rolling stock partly included, but we really need another £5m to complete the job. We had grants from the EU.

Peter   24/10/2017 at 14:43

I have saved money on my shopping - by not buying the things I will now have to buy tomorrow.

Sandy   24/10/2017 at 15:31

This seems to indicate that the Preparation budget was vastly overestimated so that the eventual humungous overspend for building the thing wouldn't look so bad!

Roger Landells   24/10/2017 at 17:43

As the vast majority of the much vaunted underspend appears to have resulted from land and property acquisitions this is nothing about which to boast. It merely means that many people who might have wanted to sell were refused and the ones who managed to get through the many hoops put in place were under recompensed. So far from capable financial management of resources rather another example of the promoters uncaring approach which has been commented upon many times.

Tony   24/10/2017 at 18:48

£200 million? You notice how they this figure like its peanuts what were the prep costs overall?

Bill@Barnbydun   24/10/2017 at 20:23

Avoiding an overspend is great news. However, an underspend can be bad news. If you have taken out a loan on a budget figure you pay interest. Although you don't spend all the money you still pay the full interest on the full amount.

Andrew Gwilt   24/10/2017 at 23:19

@PP. Do me a favour before you butt in. SHUT UP!!

Neil   25/10/2017 at 01:36

It’s a bit concerning that the DfT are false advertising at this early stage. If it were true and the figures were correct then we’ll done to all concerned but to then say that they had only achieved half of what was intended under the allocated budget is a little bit of glory seeking under false pretences.

See It, Say It, Sort It   25/10/2017 at 06:50

Andrew. Your comment is very suspicious. As if you’ve got something to hide.

PP   25/10/2017 at 08:52

See It, Say It, Sort It - we've struggled with Andrew for ages. He'll make an ill-informed, usually wrong comment, people will politely correct him, and then he'll shower abuse on them. It's absolutely exasperating. Most of us here are professionals who use the site for work, and he'll just litter every article with nonsense.

Andrew Gwilt   29/10/2017 at 00:22

Yh well I am a professional troll and I don’t mind being called that.

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