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MPs deride HS2 as ‘very poor value’

7 Feb Cancellation of the northern leg of the HS2 rail project has left the remaining project offering “very poor value for money for the taxpayer”, according to MPs.

Wasting money
Wasting money

In a report published today, the House of Commons public accounts committee (PAC) offers its damning verdict on both the high-speed rail programme and the planned new Euston station.

Whether HS2 terminates in Euston (central London) or Old Oak Common (western suburbs) now depends on whether the planned Euston development can attract private finance to pay for it. The PAC report says that the government has no plan on how to make this happen and it is unlikely that investment can be attracted of the scale and speed required to make Euston happen.

The government has already accepted that delivering only Phase 1 – the London-Birmingham line – will not be value for money, as its total costs significantly outweigh its benefits. The Department for Transport (DfT) told the PAC it was still better to complete Phase 1 – a calculation made by excluding the £23bn spent to date, and including as a benefit of the project avoiding approximately £11bn of remediation costs from cancelling entirely. The PAC expressed scepticism over these calculations.

The report raises questions as to the many as-yet unknown ramifications of the decision to cancel HS2’s northern legs. These include: how land and property now no longer needed will be disposed of, taking into account the needs of the taxpayer, local interests and fairness to those who have had their properties compulsorily purchased; impacts on other rail projects dependent on the cancelled phases; what will be delivered with the redirected £36bn and when; and how the high-speed trains will operate as part of the wider network, given that they will likely run slower than existing trains on tracks not designed for their speed.

The estimated cost of the completion of Phase 1 is now put at up to £67bn. Poor cost management indicates a failure of governance and oversight at both HS2 Ltd and the Department for Transport (DfT), the MPs say, and the report calls for answers within six months as to how these issues will now be brought under acceptable and properly accountable control.

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The DfT told the committee that it remains the government’s ambition that Euston be the London terminus for HS2 trains would have to terminate at Old Oak Common for a period of time before Euston was developed. It was unable to give any indication for when Euston might be delivered.

Committee chair Dame Meg Hillier said: “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 deliver the best possible value for the taxpayer?

“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. 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 with many unanswered questions and risks still attached to delivery of even this curtailed project.”

House of Commons Committee of Public Accounts, HS2 and Euston, Tenth Report of Session 2023/24 is available via publications.parliament.uk

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