UK: The government should use the two-year pause on new construction work for High Speed 2 at London Euston to develop a design that is affordable, deliverable and value for money, according to a National Audit Office report.
The government announced on March 10 that it was deferring work on the Euston terminus and HS2 Phase 2a between Birmingham and Crewe because of rising costs.
The NAO High Speed Two: Euston report published on March 27 says this pause will see spending deferred in the short-term but will lead to additional costs and potentially an overall increase in cost in the long-term, owing to the costs associated with stopping and restarting work, contractual changes and managing the project for longer.
The NAO says the Department for Transport and HS2 Ltd should learn lessons from how other projects have approached a reset, with clear aims and clear measures to monitor its success.
The report says DfT should work with the Euston Partnership, HS2 Ltd, Network Rail, Lendlease and local partners to clarify a shared understanding and expectations for the Euston programme in light of the changes and the affordability challenge.
DfT and HS2 Ltd should also apply the lessons from Euston to the HS2 Manchester stations and other parts of Phase 2b of the HS2 programme.
‘Government is once again having to revise plans for Euston HS2’, said NAO head Gareth Davies. ‘Clearly, the 2020 reset of the station design has not succeeded. DfT and HS2 Ltd have not been able to develop an affordable scope that is integrated with other activity at Euston, despite their focus on costs and governance since 2020. Recent high inflation has added to the challenge.
‘The March 2023 announcement by the Transport Secretary pausing new construction work should now give DfT and HS2 Ltd the necessary time to put the HS2 Euston project on a more realistic and stable footing. However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially a more expensive project overall, and that will need to be managed closely.’
‘No further forward’
Commenting on the report, Meg Hillier MP, Chair of the Committee of Public Accounts, said the plan for Euston was ‘still unaffordable and no further forward than it was three years ago’.
She said the NAO report showed that ‘the redesigned station would have cost nearly double what was budgeted. The delays to fix this will be felt not only by the taxpayer, but will continue to disrupt people and businesses around Euston. Department for Transport and HS2 Ltd have wasted enough time and money. They must get Euston right next time or risk squandering what benefits remain.’
The High Speed Rail Group said it welcomed NAO’s recognition that the delay would lead to additional costs and potentially to higher project spend overall, with a spokesperson emphasising that ‘investment to upgrade our national infrastructure is imperative to achieve the economic growth needed for prosperity and opportunity’.
Interim General Secretary of the TSSA union Peter Pendle said ‘the government really must stop pussyfooting around with HS2 and Euston in particular. Their stop-start approach is wholly counterproductive, not just to costs in the long-term, as the NAO rightly point out, but is also debilitating and shambolic for everyone involved.’