UK Inquiry Tracker

HS2 and Euston: Recall

Public Accounts Committee Closed Inquiry

Opened: 31 Jul 2023 Closed: 3 Apr 2024 Parliament page

In July 2023, the Committee reported that the Department for Transport (DfT) does not know what it is trying to achieve with the High Speed 2 station at Euston, despite spending over eight years planning and designing it. Construction work at Euston was paused for two years in March 2023. … Read more In July 2023, the Committee reported that the Department for Transport (DfT) does not know what it is trying to achieve with the High Speed 2 station at Euston, despite spending over eight years planning and designing it. Construction work at Euston was paused for two years in March 2023. The Committee has called on the DfT to use the pause to finally establish the design and expectations for the station against what it is willing to spend, while noting that the costs and impacts of the pause for the local community and small businesses remain unknown. The Committee will question senior officials at the DfT and HS2 Ltd. on progress on the project since its April 2023 evidence session and leadership changes at HS2 following the Committee’s report. Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “The HS2 Euston project is floundering. This is a multi-billion pound scheme which has already caused major disruption to the local community put on pause. The pause, ostensibly to save money, is not cost free – mothballing and possible compensation for businesses which have lost work will all need to be added to the HS2 tally. The Government must now be clear what it is trying to achieve with this new station, and how it will benefit the public. “Our report found that a wildly unrealistic budget for HS2 Euston was set in 2020 in the expectation that it would be revised. The Government must demonstrate that that it is not just repeating the same mistakes of unrealistic costings. HS2 Euston has shown us that forging ahead over-optimistically in an unclear direction is clearly not the right approach.” If you have evidence on these issues, please submit it here by 23:59 on Friday 10 November 2023. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. Please note that the Committee will not be scrutinising policy decisions in relation to HS2 Euston or the HS2 project. Show less

3 Recommendations

29 Conclusions

1 Report

1 Oral session

5 Letters

1 Event

Activity timeline 9 events

2 Apr
2024

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Tenth report from Session 2023-24

7 Feb
2024

Report published

Tenth Report - HS2 and Euston

10 Jan
2024

Correspondence

Correspondence from Sir Jon Thompson, Executive Chair, High Speed Two (HS2) Ltd, re Public Accounts Committee HS2 and Euston: Recall (16th …

10 Jan
2024

Correspondence

Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Follow-up to the session of Thursday 16 No…

16 Nov
2023

Oral evidence

HS2 and Euston

16 Nov
2023

Correspondence

Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Accounting Officer Assessment of Decision …

16 Nov
2023

Correspondence

Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Accounting Officer Assessment of Decision …

16 Nov
2023

Correspondence

Correspondence from Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport, re Accounting Officer Assessment of Decision …

16 Nov
2023

Formal meeting (oral evidence session) · Room 16, Palace of Westminster

HS2 and Euston

Oral evidence sessions 1 session

16 Nov 2023

View on parliament.uk

HS2 and Euston

Alan Over · Department for Transport Dame Bernadette Kelly DCB · Department for Transport Dr Nick Bisson · Department for Transport Sir Jon Thompson KCB · High Speed Two (HS2) Ltd

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Tenth Report - HS2 and Euston	HC 67	7 Feb 2024	32	Responded

Recommendations & Conclusions

32 results

2 Recommendation Accepted

Tenth Report - HS2 and Euston

Require Department and HS2 Ltd to implement effective cost controls and oversight for programme

Costs have continued to escalate and the Department and HS2 Ltd do not know how much the programme will now cost. This Committee has repeatedly raised concerns about the Department’s and HS2 Ltd’s management of costs. But, despite our warnings … Read more Costs have continued to escalate and the Department and HS2 Ltd do not know how much the programme will now cost. This Committee has repeatedly raised concerns about the Department’s and HS2 Ltd’s management of costs. But, despite our warnings and recommendations, costs have continued to rise. The Department’s estimate of how much it will cost to complete Phase 1 is now £45 billion to £54 billion (in 2019 prices), above a budget of £44.6 billion that had been reset only three years previously in 2020. HS2 Ltd is estimating an even higher range, of from £49 billion to £57 billion (also in 2019 prices). HS2 Ltd estimates that inflation since 2019 will add a further £8 billion to £10 billion to the cost. HS2 Ltd has not been able to constrain costs in its main works civils contracts, despite this being an area we flagged for attention in spring 2020. In our view there has been insufficient senior level focus on cost control before; but HS2 Ltd says it is now implementing changes to increase its focus on cost control, for example through new senior roles and better management information. The Department has also set out its intention to bear down on the costs of Phase 1, help HS2 Ltd to change its culture on cost control, and strengthen its own governance and control of the programme with increased oversight and reduced delegation. 6 HS2 and Euston Recommendation 2: The Department and HS2 Ltd should set out in its next six- monthly update: • Progress in recruitment of Executive and Non-Executive Board roles at HS2 Ltd. • How they are going to ensure that effective cost controls, oversight, transparency, design, and contracting are put in place so that cost overruns and delays which have been a constant problem throughout the whole HS2 project will now be brought under acceptable and properly accountable control. • Progress in reviewing existing contracts to ensure that contractors are now incentivised to minimise costs. Show less

Government Response

The government agrees and states that recruitment for key board and executive roles at HS2 Ltd commenced in early 2024. It reiterates commitments to bear down on costs, embed cost control, reinforce leadership, and strengthen governance with a plan developed for implementation, with updates to be provided in forthcoming six-monthly reports.

HM Treasury

HS2 and Euston: Recall

Activity timeline 9 events

Oral evidence sessions 1 session

Reports 1 report · click to expand

Recommendations & Conclusions

Require Department and HS2 Ltd to implement effective cost controls and oversight for programme

Require Department and HS2 Ltd to establish revised plans for Phase 1 and organisational needs

Require Department to develop private investment plans for Euston and decide on tunnelling

Publish comprehensive plan for HS2 land and property disposal balancing taxpayer and local needs

Publish reporting plan for Network North projects including timescales and value for money assurance

HS2 programme repeatedly plagued by escalating costs and lack of transparency

HS2 Phase 1 alone does not achieve value for money as previously asserted

Revised HS2 Phase 1 business case requires significant work on costs and benefits

HS2 programme costs have consistently escalated beyond original budget forecasts.

Differing cost estimates for HS2 Phase 1 exceed budgets due to inflation and design.

Department's lowest Phase 1 cost estimate still exceeds allocated budget, requiring additional funding.

HS2 cost increases driven by inflation, supply chain issues, and poor financial management.

Cost-plus Main Works Civils contracts are primary driver of HS2 programme cost increases.

Department outlines new strategy to enhance HS2 Phase 1 cost control and governance.

HS2 Ltd has streamlined governance and strengthened board for enhanced cost control.

No final decisions made on HS2 operational train services for Phase 1.

Cancellation of HS2 Phase 2 impacts Phase 1 design, particularly West Coast Main Line integration.

Cancellation of HS2 Phase 2 impacts other interdependent projects, lacking business cases.

HS2 Ltd faces estimated sub-£10 million legal exposure from cancelled Phase 2 contracts.

HS2 Ltd faces capacity challenges and struggles with recruitment in overheated market.

Department acknowledges unaffordable Euston station plans, shifts to stripped-back, privately funded development.

Treasury now supports private sector funding for Euston station and wider development.

Euston remains HS2 London terminus ambition, but its delivery date remains uncertain.

Delaying Euston tunnel contracts risks significant additional costs and taxpayer burden.

Realising Euston's private sector funding requires greater certainty and a coherent market proposition.

HS2 Ltd spent £634 million acquiring land for cancelled Phase 2 sections.

Releasing acquired Phase 2 land faces complex and time-consuming 'Crichel Down' rules.

Balancing fairness to taxpayers and affected individuals crucial for Phase 2 land disposal.

Process for returning unused HS2 Phase 1 land remains painfully slow

£36 billion HS2 savings to be reinvested across UK regions

Network North projects funded by HS2 savings require individual business case approvals

No comprehensive profiled list of projects funded by redirected HS2 savings exists

Government Response AI assessment · 32 of 3 classified

Correspondence 5 letters