HS2 timetable is "overly ambitious", MPs warn Department for Transport

High speed rail project faces "volatile" costs and skills shortages, Public Accounts Committee says, as the group of MPs urge government to finalise decisions on route

By Suzannah Brecknell

14 Sep 2016

The Department for Transport's timetable for the High Speed 2 project is “overly ambitious”, the Public Accounts Committee has warned. 

The committee points to the probability that phase one of HS2 will be delayed by a year, and calls on ministers to “include a realistic timetable" when they make an announcement on the final route of the high speed railway this Autumn.

The committee's report acknowledges that DfT and HS2 Ltd have made “considerable progress with preparations for High Speed 2” since the last Public Accounts Committee report on the project in 2013.

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However, alongside uncertainty about timing, the cross-party group of MPs notes that the cost estimates are “volatile” and the department may face a major challenge in securing the skills it needs for this and other infrastructure projects.

At the time of the 2015 Spending Review, the transport department submitted a cost estimate that was £7bn over the agreed funding of £28.5bn, according to the committee's report.

Following a Cabinet Office-led review, the department identified up to £9bn of potential savings, but the PAC is cautious about the impact these savings would have on the overall outcome of HS2.

“It remains to be seen whether these planned savings on phase two can be delivered without adversely affecting the expected benefits of the programme," says the report.

Around £768m worth of savings may come from a new route in South Yorkshire, moving the HS2 station from Sheffield Midland to Meadowhall. MPs are concerned, however, that the analysis proposing this new route “contained no quantification of the benefits for each of the alternatives”.

"Parliament and the public are still in the dark about crucial details – not least when the railway will open, how much it is expected to cost and precisely where it will go" – PAC chair Meg Hillier MP

When government announces the final route in the Autumn, the report says, it must set out out “the basis on which the selected option was chosen, including quantification of the impact on passengers, local communities, and on forecast growth and regeneration.”

Committee chair Meg Hillier said: “The government has promised significant benefits to taxpayers in return for their investment in HS2, expected to run to more than £55 billion.

“Despite this, Parliament and the public are still in the dark about crucial details – not least when the railway will open, how much it is expected to cost and precisely where it will go.

“The announcement at the weekend that HS2 Ltd chief executive Simon Kirby is leaving the company adds to the uncertainty enveloping a project on which strong and stable leadership is vital.

“Lack of clarity over plans for HS2 in South Yorkshire highlights what is at stake for communities and local economies, and why government must explain its intentions and the basis for its decisions in a transparent manner.”

The committee also expresses concern that project costs could rise as the department competes for people with the right engineering, project management and commercial skills to deliver the project.

“The department and HS2 Ltd are competing with consulting and engineering firms, and other government projects for scarce skills, which represents a key challenge that will also impact on project costs,” says the report.

The committee says it is encouraged that the transport and communities departments have already begun to plan for regeneration and growth benefits which government hopes HS2 will deliver.

But it says there is no clear provision for regeneration around HS2 stations. Apart from at Euston – where long term regeneration has been secured by the department – local authorities will be responsible for identifying funding for regeneration.

“The department should seek assurances from the relevant local authorities that they have plans in place to identify sources of funding and financing, to secure the local regeneration and growth benefits of High Speed 2,” says the report.

Responding to the report, a DfT spokesperson said: “The government is fully committed to HS2 and the project is on time and on budget. We are keeping a tough grip on costs, and pressing ahead with plans for phase two – with further details due to be announced this autumn.

“Improving regional infrastructure is vital in supporting regional growth and building an economy that works for everyone. HS2 is a key part of this, and will be the backbone of our national rail network.”


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