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.