The Department and HS2 Ltd’s failure to work together effectively is starkly illustrated by them not being able to agree how much HS2 will cost. The Department and HS2 Ltd have still not agreed on how much it will cost to complete Phase 1. They are yet to reach agreement on the methodology and assumptions that underpin their cost estimates. This has been exacerbated by HS2 Ltd failing to ensure it receives reliable data from its supply chain. The existing budget, set in 2019, is no longer viable. With the estimates for completing Phase 1 now as high as £66bn in 2019 4 prices and inflation adjustments potentially representing an additional £10bn, the total programme costs could be close to £80bn. Only when the Department and HS2 Ltd are able to agree on cost estimates will they be able to agree a budget with HM Treasury. In the interim, the Department is agreeing annual budget settlements for HS2 Ltd, a short–term funding approach that provides poor value for money for the delivery of any long– term infrastructure project. recommendation Alongside its Treasury Minute response, the Department should write to the committee, setting out details of the agreed cost estimate methodology. The Department should also include in its next six–monthly update to Parliament when it will update programme costs into current prices and how frequently it will do this in the future.