Government announces review into HS2 costs

Transport Secretary Louise Haigh has announced a major review into the spiralling costs of the HS2. The move comes after years of failed delivery and escalating expenses.

Haigh, who took over the role earlier this year, has warned that the extent of the challenges inherited with HS2 are significant. The true costs of HS2 are a little unclear, with the stated cost currently at £66 billion, however HS2 Ltd provided an upper limit projection of £74 billion in 2023. Regardless of the project's true cost, Haigh has said the “scale of failure” has led to the project to “spiral out of control”.

In response, the government has launched an independent review to investigate the root causes of the cost overruns and identify ways to bring the project back under control. The review will also examine the oversight of major transport infrastructure projects in general, with the aim of ensuring lessons learned from HS2 can be applied to future projects.

Haigh said: “It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming Transport Secretary I have seen up close the scale of failure in project delivery – and it’s dire.”

The government has also reinstated ministerial oversight of HS2, with Transport Secretary Haigh, Rail Minister Lord Hendy, and Chief Secretary to the Treasury holding regular meetings to monitor progress and address challenges.

"Taxpayers have a right to expect HS2 is delivered efficiently, and I won't stand for anything less," Haigh said. "It's high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again."

The future of Phase 2a was also put in doubt as the government also confirmed that it will not be reinstating plans to build the line to Crewe, despite rumours that it was preparing to announce plans to. The second phase was cancelled in October 2023 by the previous Conservative government. In addition to the review, the government is considering renegotiating contracts with HS2 contractors as well as reviewing the incentives it has used.

A spokesperson for HS2 Ltd said: “We welcome the Secretary of State's priorities for HS2 Ltd and are committed to working with the new Government to improve delivery. We also fully support James Stewart's governance review and look forward to his recommendations.

“HS2 Ltd recognises that there are many lessons to be learned from delivery to date and, under new leadership, are actively implementing the changes within our control to stabilise costs.”

HS2 Ltd has been under the control of its executive chair Sir Jon Thompson for the last year, and it will be welcoming its new Chief Executive, Mark Wild who is expected to start in his role shortly.