UK Inquiry Tracker

HS2 Euston

Public Accounts Committee Closed Inquiry

Opened: 15 Feb 2023 Closed: 24 Sep 2023 Parliament page

The Committee will question Dame Bernadette Kelly, Permanent Secretary at the Department for Transport and Mark Thurston, Chief Executive of HS2 Ltd on progress with the design and development of a new HS2 station at Euston. Questions will include how the risks to value for money are being managed, integration … Read more

13 Recommendations

14 Conclusions

1 Report

1 Oral session

1 Letter

1 Event

Activity timeline 5 events

24 Sep
2023

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Sixty-third report from Session 2022-23

7 Jul
2023

Report published

Sixty-Third Report - HS2 Euston

15 May
2023

Correspondence

Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Public Accounts Committee Hearing on HS2 E…

24 Apr
2023

Oral evidence

HS2 Euston

24 Apr
2023

Formal meeting (oral evidence session) · The Grimond Room, Portcullis House

HS2 Euston

Oral evidence sessions 1 session

24 Apr 2023

View on parliament.uk

HS2 Euston

Alan Over · Department for Transport Dame Bernadette Kelly DCB · Department for Transport Mark Thurston · HS2 Ltd

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Sixty-Third Report - HS2 Euston	HC 1004	7 Jul 2023	27	Responded

Recommendations & Conclusions

12 results

2 Conclusion Accepted

Sixty-Third Report - HS2 Euston

Ensure realistic and affordable Euston station budget and design before restarting construction.

The £2.6 billion budget set in 2020 proved to be completely unrealistic for what the Department wanted to deliver. In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd set … Read more

Government Response

The government agreed, stating the Euston Reset Programme will establish a realistic budget range, assess the updated station design for affordability, and provide a new delivery-into-service date before restarting construction work.

HM Treasury

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4 Recommendation Accepted

Sixty-Third Report - HS2 Euston

Establish plan with Treasury for managing inflation and HS2 programme contingency.

The Department and HM Treasury have not reached a clear understanding about how they would manage high levels of inflation on the HS2 programme, including accessing Government-held contingency. In the 2022 Autumn Statement, HM Treasury confirmed that departments needed to … Read more

Government Response

The government agreed, outlining specific principles for accessing government-held contingency on HS2, including requirements for HS2 Ltd to use existing funds first and exceptions for Secretary of State Retained Risk events, and committed to reporting back in six months.

HM Treasury

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6 Conclusion Accepted

Sixty-Third Report - HS2 Euston

Demonstrate embedded lessons from past rail projects and specific measures addressing Euston cost overruns

The Department has not yet learned lessons from managing major rail programmes. In previous examination of other rail programmes like Thameslink and the Great Western Railway modernisation we have reported very similar problems to the ones we are now seeing … Read more The Department has not yet learned lessons from managing major rail programmes. In previous examination of other rail programmes like Thameslink and the Great Western Railway modernisation we have reported very similar problems to the ones we are now seeing again with Euston. The Department and HS2 Ltd say that they are learning lessons from other programmes such as Crossrail. But that there is more for them to do for example, on cost estimation, the treatment of contingency and managing the integration of complex projects. They also acknowledge that there are lessons they could learn from the development at King’s Cross such as the value that could come from managing the work at Euston as one integrated programme. HS2 Ltd considers that the work at Manchester Piccadilly will be the most important place for them to learn the lessons from Euston, given that Curzon Street Station in Birmingham is already much more developed. However, both stations are major construction projects in their own right and careful scrutiny of costs needs to be maintained by the Department to ensure that similar mistakes 8 HS2 Euston do not reoccur. This will include thinking about the right set up and organisation of the project, getting it in place early and determining the scale of ambition for regeneration and over-site development work. Recommendation 6: The Department needs to demonstrate to Parliament and the public that they are successfully embedding the lessons from past rail projects and not just repeating the same mistakes. Specifically on Euston the Department and HS2 Ltd should report back to the Committee on: • what measures the Department and contractors took internally to address costs overruns and to identify who was responsible • what lessons they have learned from the Euston project and how it will apply them at both Birmingham Curzon Street, Manchester Piccadilly, having done so they will scrutinise the revised costs carefully to avoid further cost occurring in other pa Show less

Government Response

The government agreed, outlining actions to embed lessons from past rail projects, including working with the IPA, promoting a learning culture, identifying cost drivers in the Euston Reset Programme, and sharing insights for future projects like Birmingham Curzon Street and Manchester Piccadilly.

HM Treasury

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7 Conclusion Accepted

Sixty-Third Report - HS2 Euston

Department exploring minimum and value-maximisation design options for HS2 Euston station

We asked the Department to give us an indication of what a reduced design for Euston station might look like. The Department told us that it would need to examine two options before it could come to the right solution: … Read more

Government Response

The government agrees and has commenced the Euston Reset Programme, aiming to develop an affordable Euston campus that maximizes benefits within available funding by April 2025, which reflects the committee's observation of the Department's planned options examination.

HM Treasury

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8 Conclusion Accepted

Sixty-Third Report - HS2 Euston

Pause in HS2 Euston construction used to develop affordable, passenger-focused design

The Department told us that it wanted to look at all elements of the design to see where the opportunities are to deliver something that prioritises passenger benefits and wider benefits of the scheme, but also reduces costs.14 It plans … Read more

Government Response

HM Treasury

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10 Recommendation Accepted

Sixty-Third Report - HS2 Euston

HS2 Ltd identified significant efficiencies to meet affordable overall project costs

HS2 Ltd told us that there was pressure to drive the overall HS2 cost to what was deemed to be an affordable point. It viewed the £2.6 billion as a budget to work towards and undertook a lot of work … Read more

Government Response

The government accepts the recommendation for an affordable Euston station design, committing to the Euston Reset Programme which will set a realistic budget, assess design maturity, and provide a new delivery-into-service date by Summer 2025.

HM Treasury

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11 Recommendation Accepted

Sixty-Third Report - HS2 Euston

HS2 Euston cost estimates increased to £4.8 billion, requiring substantial reductions for affordability

Later, more detailed estimates showed that the costs were likely to be significantly higher, with the 11-platform design forecast to cost as much as £4.4 billion in June 2020, and the revised 10-platform design estimated to cost £4.8 billion in … Read more

Government Response

HM Treasury

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18 Recommendation Accepted

Sixty-Third Report - HS2 Euston

Unclear purpose and drawdown mechanisms for HS2 Phase One's £4.3 billion contingency fund.

One potential source of additional funding to help manage higher costs from inflation and also higher costs at Euston is the government-held £4.3 billion contingency. This was set by the Department in 2020 as part of the £44.6 billion budget … Read more

Government Response

The government accepts the recommendation to clarify contingency use, outlining existing principles for accessing the £4.3 billion government-held contingency via the Development Agreement, and commits to providing a six-month update to the Committee.

HM Treasury

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19 Recommendation Accepted

Sixty-Third Report - HS2 Euston

Department's HS2 reports commenced, identifying an early £0.4 billion Euston cost pressure.

In response to our May 2020 recommendation on the lack of transparency on the HS2 programme, the Department began providing six-monthly reports to Parliament on progress, including on costs.44 The Department published its first update in October 2020 and, on … Read more

Government Response

The government agrees, noting it transparently disclosed the significant £4.8 billion revised cost estimate to Parliament via the National Audit Office when it became available, and reaffirms its commitment to upholding transparency in the HS2 programme.

HM Treasury

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20 Recommendation Accepted

Sixty-Third Report - HS2 Euston

Euston cost pressure consistently reported as £0.4 billion despite expected reductions from design changes.

The Department has continued to report that the cost pressure at Euston was £0.4 billion throughout its six-monthly updates, including in the October 2022 update, which was the latest at the time we took evidence.46 Since October 2021, with the … Read more

Government Response

HM Treasury

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21 Recommendation Accepted

Sixty-Third Report - HS2 Euston

HS2 Euston's actual cost estimate of £4.8 billion greatly exceeded previously reported figures.

However, HS2 Ltd’s latest cost estimate of £4.8 billion is significantly higher than previously reported, at £2.2 billion over the budget.49 The Department told us that it did not know of the £4.8 billion estimate until HS2 Ltd reported it … Read more

Government Response

HM Treasury

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22 Recommendation Accepted

Sixty-Third Report - HS2 Euston

HS2 Ltd's two-stage procurement process delays confident cost estimates for complex projects.

HS2 Ltd explained that it had not expected to have an estimate of costs that it was confident in until the end of 2022 following work by the construction partner on a detailed, ‘bottom-up’ costing of the design.55 This followed … Read more

Government Response

HM Treasury

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Government Response AI assessment · 27 of 13 classified

Accepted 12

Acknowledged 4

Deferred 5

Rejected 6

Total 13 recs + 14 conclusions

Correspondence 1 letter

15 May 2023 Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Public Accounts Committee Hearing on HS2 Euston – Monday April 24th, 2023, dated 3 May 2023

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