HS2 Ltd’s construction contracts are unacceptable to the public purse and it is imperative that HS2 Ltd deliver on its assurances to us that it can renegotiate these and deliver significant cost savings. The terms and operation of these contracts provide extremely poor value for money. HS2 Ltd did not heed the warnings that the previous Public Accounts Committee made in 2020 that, in bearing more of the risk of cost increases, it would need to ensure the contracts were managed carefully and accepts that it has not done so effectively. HS2 Ltd is now seeking to renegotiate these contracts on more favourable terms. However, we are unconvinced that there are incentives for the contractors to make significant changes and deliver significant cost savings. There is also a risk that the main contractors pass any financial consequences down the supply chain to small and medium–sized enterprises who may find it more difficult to absorb such changes. recommendation a. The Department’s six–monthly progress updates to Parliament should include progress on contract renegotiations and the level of savings made. b. HS2 Ltd should write to the committee before the 2025 summer recess, setting out what steps it will take if the contracts cannot be negotiated on more favourable terms.