According to a new report from the Public Accounts Committee (PAC), the HS2 Programme will offer poor value for money following the cancellation of the line after the West Midlands.
Only delivering Phase 1 of the project will mean that value for money will not be achieved, something that the government has accepted, with the Department for Transport telling the PAC that it is still better to continue with the delivery of Phase 1. This is due to approximately £11 billion worth of remediation costs that come alongside the project being cancelled being saved.
Lack of a Plan
In a further blow to the Government, the report also criticises the management of HS2 and the lack of clarity over the unknown ramifications of cancelling HS2’s northern leg. It found:
- A lack of clarity on how land and property that is no longer needed will be disposed of
- The unknown impacts on other rail projects dependent on the cancelled phases
- A lack of knowledge and foresight into what will be delivered within the Network North package of works and when
- A lack of a plan on how exactly high-speed trains (which will likely run slower than existing trains on tracks not designed for their speed will operate
- Constant problems with cost evaluation and management indicating a failure of governance
What next for Euston?
The report has also highlighted that urgent decisions would need to be made on the funding of HS2’s Euston station, and said it was highly sceptical that that investment can be attracted of the scale that would make the project viable.
Chair of the committee, Dame Meg Hillier was highly critical, commenting: “The decision to cancel HS2’s Northern leg was a watershed moment that raises urgent and unanswered questions, laid out in our report.
“What happens now to the Phase 2 land, some of which has been compulsorily purchased? Can we seriously be actively working towards a situation where our high-speed trains are forced to run slower than existing ones when they hit older track?
“Most importantly, how can the Government now ensure that HS2 delivers the best possible value for the taxpayer?”
The committee has offered six recommendations. It has suggested that the DfT revise its business case for continuing Phase 1, outlining how it will measure success and maximise the benefits of completing it.
With costs spiralling upwards on the project, the committee has asked for both the DfT and HS2 to outline in its next six-monthly update how they are going to ensure that effective cost controls, oversight and contracting are to be put into place so that cost overruns will be brought under an acceptable level.
It has also recommended that plans are developed for a range of private investment scenarios regarding Euston and decide how to proceed with the tunnelling from Old Oak Common to Euston.
The committee also criticised HS2’s approach to land sales. After spending nearly £600 million on land and property which after the cancellation is no longer needed, it is now looking to dispose of it quickly rather than work with other rail projects where land could be useful, including Northern Powerhouse Rail. The committee has urged that the taxpayer is protected as well as local interests in any ongoing land sales.
“HS2 is the biggest ticket item by value on the Government’s books for infrastructure projects. As such, it was crying out for a steady hand at the tiller from the start,” Dame Hillier added.
“But, here we are after over a decade of our warnings on HS2’s management and spiralling costs – locked into the costly completion of a curtailed rump of a project and many unanswered questions and risks still attached to the delivery of even this curtailed project.”