Oakervee Review
Oakervee Review of HS2
Independent review advising government on whether and how to proceed with the HS2 high-speed rail project, assessing cost, schedule, governance, and alternative options for Phases 1 and 2. The report made 63 numbered conclusions rather than formal recommendations.
63recommendations
63Not Yet Responded
Government Response
Prime Minister Boris Johnson accepted the overall conclusion to proceed with HS2 Phase 1 and Phase 2a on publication day. HS2 Phases 2a and 2b were subsequently cancelled by Prime Minister Sunak in October 2023.
11 February 2020
Recommendations
Recommendation 1
Conclusion 1: Notwithstanding changes that have occurred since the 2009 Network Rail study, its principal conclusion – and original ratonale for HS2 – stll holds: there is a need for greater capacity (both more trains on tracks and more seats on trains) and reliability on the GB rail network. The primary need is for capacity; speed although an important factor in economic benefts should not be in and of itself the primary driver of decision making. HS2 should be thought about as a new railway that enables fast inter-city services to be on segregated lines to free up capacity for commuter and freight services – and should be designed, built and operated with this in mind. It is essental that all future analysis for the business case for HS2 captures the latest evidence and projectons for crowding on the conventonal network, with the projectons accountng
Recommendation 10
Conclusion 10: The government should recommit to the full Y-shaped network, linking Phase One to Manchester, the East Midlands, Yorkshire, and beyond. It only makes sense to do Phase One if contnuing with northern phases to deliver transformatonal benefts to the North of England and Midlands.
Recommendation 11
Conclusion 11: Transport for the North and Midlands Connect, together with Network Rail, HS2 Ltd and the DfT, should develop a plan to maximise the benefts of Phase 2b and ensure an optmised delivery model. This could be the frst step in an integrated rail plan for the GB rail network. This Review recommends a further study of circa 6 months of Phase 2b scope in the context of Midlands Engine Rail and NPR proposals. The study should consider the appropriate mix of new high speed line and upgrades of conventonal network to improve reliability and service frequency, and the sequencing of these to deliver service improvements as soon as possible – before HS2 Ltd’s view of opening Phase 2b as currently designed in 2035-2040. The budget allocated towards Phase 2b, along with other relevant funding allocatons, should be used in developing an integrated railway plan alongside an integrated railway investment programme for the Midlands and the
Recommendation 12
Conclusion 12: Preparaton of materials for the Phase 2b Bill as currently designed should be paused and await the outcome of this study. Given experience on Phase One, having smaller Bills/phases may be beter to allow easier scrutny of proposals in Parliament and faster constructon.
Recommendation 13
Conclusion 13: The Review recommends removing the Handsacre connecton from HS2. At the same tme, Network Rail and the DfT should maintain or improve services on the WCML to Stoke-on-Trent, Staford and Macclesfeld. The Review considers that the Handsacre connecton would only be needed if it was decided not to proceed with Phase 2a to Crewe.
Recommendation 14
Conclusion 14: The DfT should consider making passive provision for a future HS2 staton near to Calvert. There could be merit in developing a HS2 staton near Calvert if local plans support a signifcant residental and commercial development in this region, and if there is passenger 7.
Recommendation 15
Conclusion 15: Phase One: The Review has examined HS2 Ltd cost estmates. There is considerable risk that the prices for Phase One will not remain at the levels set out in the Chairman’s Stocktake unless rigorous cost controls are put in place. Cost controls will be key to ensuring that costs remain at or below the levels set out in the Chairman’s Stocktake.
Recommendation 16
Conclusion 16: Phase Two: There is far less certainty on the costs and schedule for Phase Two. It would be unwise to commit a specifc cost number for Phase Two given the choices on Phase 2b route that are stll to be made, the design maturity and the level of ground investgatons. Accordingly, costs and schedule for Phase Two should contnue to be expressed as a range. For Phase Two cost estmates, higher contngency levels are appropriate including in order to avoid the issues that Phase One has faced. As described in secton 6 above, preparatons of materials for the Phase 2b Bill as currently designed should be paused.
Recommendation 17
Conclusion 17: While the Review has not been able to develop its own botom-up estmate of costs on the HS2 project, it considers that costs on the HS2 project could be around 15 to 20 per cent higher than those set out in the Chairman’s Stocktake. Critcally, this assumes, amongst other things, that Phase 2b proceeds as currently planned – as indicated at conclusion 23 in secton 8 below, there are real opportunites to reduce costs on Phase 2b by removing gold-platng including through alignment redesign.
Recommendation 18
Conclusion 18: Given the revised schedule forecast for Phase One and Phase 2a set out in the Chairman’s Stocktake, the government should consider merging the constructon of Phase 2a with that of Phase One.
Recommendation 19
Conclusion 19: HS2 Ltd and the DfT need to deploy benchmarking more consistently and more uniformly. The DfT, with the support of the IPA, should build on the useful mult-project benchmark which the DfT has developed. Any benchmarking should be UK-specifc where relevant, but look to include and learn from internatonal examples as well. As part of this benchmarking work, there is a need to monitor prices on the market to check that cost estmates align with current market prices.
Recommendation 2
Conclusion 2: Inter-city connectvity is important, but so too is regional and commuter connectvity. HS2 clearly delivers inter-city improvements, but also frees capacity for regional and commuter services to be improved. There is no overarching strategy and analysis to optmise the allocaton of released capacity on the basis of the project’s objectves. Given that this is a core ratonale for the HS2 scheme, much more work needs to be done jointly between HS2 Ltd, the DfT, Network Rail and the Shadow Operator in an integrated GB rail plan to maximise these benefts and artculate them clearly. HS2 should be planned as part of the natonal rail network. This includes links to existng railways but also to new investment proposals from Midlands Connect and Transport for the North and Network Rail’s Enhancements Programme. HS2 has the potental to stmulate economic growth
Recommendation 20
Conclusion 20: HS2 Ltd and Network Rail to engage with each other to ensure that cost estmatng methodologies are used in a consistent fashion including on an ongoing basis for future projects. There is an opportunity to learn from each other.
Recommendation 21
Conclusion 21: Given the cost positon outlined in this secton, HS2 as currently scoped is not afordable within its present funding envelope which was set in 2013 and revised in 2015. As previously indicated at conclusion 10 in secton 6 above, the Review considers that the government should commit to the full Y-shaped network. If the government commits to the full Y-shaped network, it will need to commit signifcant additonal funding to make the scheme afordable including providing a realistc funding envelope for Phase Two. Before issuing NtP, a revised funding envelope should be set for Phase One – the funding envelope should have appropriate levels of contngency, to be held by the DfT/HM Treasury, and should be realistc.
Recommendation 22
Conclusion 22: There would be serious consequences for the supply chain, the fragile UK constructon industry and confdence in UK infrastructure planning if HS2 were cancelled at this late stage. Cancellaton of HS2 could also hinder atempts to create an economic
Recommendation 23
Conclusion 23: On balance the Review considered that reducing the specifcatons of HS2 Phase One should contnue to be looked at, but only within the limits of the Phase One Act powers. This is due to the signifcant costs of making changes to these powers both in terms of tme and monetary costs, and the benefts of future-proofng the scheme for future service enhancements. The next stage of design development for Phases One and 2a should look at efcient and economic design standards, and this should form part of the work to fnalise detailed designs and prices. HS2 Ltd should thoroughly examine what gold-platng of standards can be removed on Phase 2b to reduce costs, including alignment redesign if considered appropriate.
Recommendation 24
Conclusion 24: There needs to be a full review of the milestones within the Phase One Main Works Civils contracts with a view to keeping costs down Procurement and contractng approach
Recommendation 25
Conclusion 25: ahead of issuing NtP for Phase One, the government should ensure that HS2 Ltd achieves a satsfactory positon with each of the Main Works Civils contractors in order to obtain acceptable Stage 2 prices and a reasonable level of value engineering. If HS2 Ltd cannot achieve a satsfactory positon with the Main Works Civils contractors, then HS2 Ltd, subject to further discussions with the DfT and HM Treasury, may have to consider re-procuring some or all of these Future HS2 procurements
Recommendation 26
Conclusion 26: Lessons from the Phase One Main Works Civils contracts, and indeed from Crossrail and other major transport projects, need to be learnt and applied by HS2 Ltd. Revised procurement and contractng models should be considered, especially for any future HS2 constructon contracts including on Phase 2a. In any future procurements, HS2 Ltd needs to consider how it can ensure: (i) an optmised approach to risk allocaton is used; (ii) there is robust management of interfaces on the project; and (iii) efcient designs are developed. Proposed next steps on Phase 2a
Recommendation 27
Conclusion 27: Within the constraints of the Phase 2a Bill, HS2 Ltd and the DfT should investgate the potental to optmise the design and reduce costs on Phase 2a. 9. HS2 statons
Recommendation 28
Conclusion 28: Work needs to contnue to ensure that commercial opportunites are maximised at HS2 Phase One statons.
Recommendation 29
Conclusion 29: HS2 Ltd and the DfT should contnue, where feasible and appropriate, to engage with the private sector, in associaton with local government, to develop HS2 statons. There may be opportunites for local authorites or combined authorites, in partnership with the private sector, to take on HS2 Ltd’s role in funding and developing statons. If the current arrangements for staton development are lef in place, there is a signifcant risk that economic value from HS2 staton developments will not be maximised. A bespoke, specifc commercial model may need to be developed to deliver specifc elements in and around statons.
Recommendation 3
Conclusion 3: Given that supportng regional economic growth and a more balanced UK economy is a core objectve of HS2, further work should be done by HS2 Ltd, the DfT and wider government to understand these impacts. It has been hard for this Review to assess the likely size of impacts on regional economic growth that will result from HS2 or other transport improvements.
Recommendation 30
Conclusion 30: There needs to further consideraton around whether and how value created in land close to HS2 statons could be captured.
Recommendation 31
Conclusion 31: Governance arrangements for the development of the HS2 statons need to be streamlined with HS2 statons closely integrated with the existng transport network and the local area.
Recommendation 32
Conclusion 32: Untl the issues set out in conclusions 28 to 31 above are sufciently progressed, procurements for the development of HS2 statons should be paused. Euston staton: costs, optons and governance
Recommendation 33
Conclusion 33: The existng design for the HS2 staton at Euston is not satsfactory. For the future Euston staton, there should be a study led by the SRO, looking into the efciency of the future staton as a whole including considering optons to simplify the HS2 approach to Euston staton.
Recommendation 34
Conclusion 34: There needs to be a single plan for the overall Euston project. In order to help deliver this single Euston plan, one organisaton should bring together all the stakeholders and be responsible for the overall development and governance of the Euston project. Given the complexity of the Euston project, this organisaton should not be HS2 10. Capability, governance and oversight
Recommendation 35
Conclusion 35: Milestones to be set against which HS2 Ltd’s management should be held to account in respect of their period in ofce. HS2 Ltd’s capability
Recommendation 36
Conclusion 36: While HS2 Ltd’s board and corporate governance appear to be nearing substantal readiness for the next stage of the HS2 project, additonal non-executve directors should be appointed. However, the board and the executve must not be complacent and will need to consider what further steps should be taken to improve the Company’s performance.
Recommendation 37
Conclusion 37: HS2 Ltd’s governance arrangements need to evolve and strengthen to refect the project’s complexity and scale as the project moves through its various phases in the coming decades. Company
Recommendation 38
Conclusion 38: Systems integraton in HS2 Ltd needs to be strengthened now and maintained throughout the life of the project and beyond into asset management. It also needs to be ensured there is a single point of accountability for systems integraton. This is a vital lesson from Crossrail. Clear accountability for systems integraton, along with an authority overseeing integraton, will be key to ensuring HS2 services commence in a tmely and smooth fashion.
Recommendation 39
Conclusion 39: HS2 Ltd should work closely with the Shadow Operator and Network Rail to ensure its decisions consider and refect the operatonal perspectves of both organisatons. Cost estmaton, management and control
Recommendation 4
Conclusion 4: HS2 can be part of transformatonal economic change, but only if properly integrated with other transport strategies, especially those seeking to improve inter-city and intra-regional transport, and also with natonal, regional and local growth strategies. Transport investment alone will not ‘rebalance’ the UK economy. Wider environmental consideratons
Recommendation 40
Conclusion 40: Going forward, HS2 Ltd needs to demonstrate improvements, to the satsfacton of HS2 Ltd’s board, the DfT and HM Treasury, in cost estmaton, management and control. Commercial strategy, design management & constructon management
Recommendation 41
Conclusion 41: Going forward, HS2 Ltd needs to demonstrate improvements in capability, to the satsfacton of both HS2 Ltd’s board and the DfT, in a number of key areas including commercial strategy, design management and constructon management. Stakeholder engagement
Recommendation 42
Conclusion 42: Going forward, HS2 Ltd needs to demonstrate improvements, to the satsfacton of both HS2 Ltd’s board and the DfT in stakeholder engagement.
Recommendation 43
Conclusion 43: The government should appoint non-executve directors to the HS2 Ltd board. The government needs to ensure it has clear oversight into what is happening on the project and proper control over costs.
Recommendation 44
Conclusion 44: The DfT should draw on the expertse of a group of
Recommendation 45
Conclusion 45: As part of the decision around Notce to Proceed, the DfT should set out its plan for improving how it functons as a sponsor, client, funder and shareholder including how it will improve its internal expertse in a number of key areas.
Recommendation 46
Conclusion 46: The overall governance of the HS2 project, including the future planning of Phase Two along with the delivery and operaton of HS2, should be reframed in light of the recommendatons of the Williams Review, including any new body or bodies that are established by government following the Williams Review.
Recommendation 47
Conclusion 47: On a regular basis, the Secretary of State for Transport should, upon receipt of a report from the HS2 Ltd Chair, advise Parliament on the progress of the HS2 project.
Recommendation 48
Conclusion 48: The economic case does not currently fully align with the strategic case. Economic rebalancing, one of the primary drivers in the strategic case for HS2, is not currently refected in the economic Wider economic impacts
Recommendation 49
Conclusion 49: Further work is needed on understanding the potental impact of HS2 on the number and locaton of homes and jobs. Work is needed by the DfT and HS2 Ltd for future HS2 business cases to review and quantfy the level 3 impacts in the beneft-cost rato given the prominence of these impacts in the strategic case.
Recommendation 5
Conclusion 5: The government’s 2050 target has placed a new emphasis on the design, build and operaton of the HS2 network. The ability to reduce carbon emissions in the constructon of Phase One may be limited so focus should be placed on improving plans for Phase Two in this regard in partcular. HS2 Ltd should look to drive innovaton in constructon and delivery of the project to reduce its forecast greenhouse gas emissions. Over the longer term HS2 should form part of an integrated government strategy to encourage people to shif to greener transport
Recommendation 50
Conclusion 50: Further work is needed on understanding why reducing crowding doesn’t play a greater role in the quantfed benefts.
Recommendation 51
Conclusion 51: There are impacts that are currently not quantfed that are important to consider alongside the monetsed beneft-cost rato. This includes the potental transformatonal benefts that HS2 could unlock through changing land-use as well as the adverse environmental impacts from constructon and the permanent land required for the railway. 2017 economic assessment of the full network
Recommendation 52
Conclusion 52: The net economic cost to the transport budget, as valued by DfT TAG, of HS2 has increased from £40bn to £62-69bn (present values, 2015 prices).
Recommendation 53
Conclusion 53: The latest results indicate that the full Y-shaped HS2 network represents ’low-medium’ value for money, using DfT TAG, when capturing the cost estmates in the Chairman’s stocktake and benefts under fxed Economic appraisal of phases of HS2
Recommendation 54
Conclusion 54: The evidence is clear that the full network is needed to realise the highest value for money economic return on the investment of HS2. Phase One as a standalone scheme does not represent value for money, nor does building Phase Two without building Phase One.
Recommendation 55
Conclusion 55: If an integrated rail plan and investment programme for the Midlands and the North of England is developed (see conclusion 11 in secton 6 above), the economic appraisal of this integrated rail plan and investment programme should be assessed in additon to individual projects and phases of schemes. Uncertainty in the economic appraisal
Recommendation 56
Conclusion 56: The demand sensitvity analysis suggests that the full HS2 network has a beneft-cost rato range of 1.0 to 2.1 and represents low high value for money. Extending the appraisal period from 60 to 100 years afer scheme opening has a material impact on improving the value for Economic impact of a reduced frequency
Recommendation 57
Conclusion 57: The beneft-cost rato could be improved by removing the Handsacre connecton and reducing the proposed frequency of HS2 services from 17 to 16tph.
Recommendation 58
Conclusion 58: Given the recommendaton in secton 6, a frequency of 14tph, with passive provision for 16tph, needs to be considered in future business case work. Inital analysis suggests that a move below 16tph would likely have a marginal negatve impact on the beneft-cost rato. However, the train service ofer in this lower-frequency analysis has not been optmised. Further work is needed by the DfT, HS2 Ltd and Network Rail to ascertain the most suitable 14tph HS2 train service specifcaton.
Recommendation 59
Conclusion 59: Before issuing NtP: (i) an updated business case for Phase One, approved by HMT, should be published; and (ii) the DfT should update and publish a revised business case for the project as a whole. This should include the latest cost and benefts for the project. 12. Alternatve
Recommendation 6
Conclusion 6: On balance the Review considered that reducing the specifcatons of HS2 Phase One should be looked at, but only within the limits of the Phase One Act powers. This is due to the signifcant costs of making changes to these powers, both in terms of tme and monetary costs, and the benefts of future-proofng the scheme for future service enhancements.
Recommendation 60
Conclusion 60: Euston staton is an important part of realising the benefts of HS2, and the secton from Old Oak Common to Euston should not be removed from the scope of the project. However, it is vital to get the Euston project right. Old Oak Common should act as the temporary London terminus for HS2 services untl Euston staton is complete, so tme taken to get Euston right does not delay the start of HS2 services. ‘Start in the north’
Recommendation 61
Conclusion 61: It is now hard to stop Phase One and start HS2 in the North of England without years of blight given that powers have been taken for Phase One, a signifcant amount of work has been carried out on Phase One, and given the relatve immaturity of northern sectons and regional schemes. The quickest way to deliver long-distance inter-city connectvity to the Midlands and the North of England is to contnue with Phase One, and to fully commit to subsequent phases. Cancel HS2 in favour of alternatve investment on the conventonal network
Recommendation 62
Conclusion 62: There are no-shovel ready alternatve investments in the existng network that are available: if HS2 were to be cancelled, many years of planning work would be required to identfy, design and develop new proposals. The upgrading of existng lines would also come at a high passenger cost with signifcant disrupton.
Recommendation 63
Conclusion 63: The Review strongly advises against cancelling the scheme.
Recommendation 7
Conclusion 7: The specifcaton for HS2 is ambitous compared to current internatonal experience. A more prudent assumpton of 14tph should be used as a central planning assumpton for train service planning, future- proofng for 16tph, and future business cases should be updated accordingly. Localised environmental impacts
Recommendation 8
Conclusion 8: The Review recognised the impact of HS2 on woodland, landscape, biodiversity and more broadly on built and natural environments. Given the duraton of the HS2 project, such impacts, along with any accompanying mitgaton and compensatory measures, need to be kept under review.
Recommendation 9
Conclusion 9: The Review recognised the impact on communites of constructon of HS2, and HS2 Ltd should contnue to mitgate these. There are opportunites in the design of Phase 2b to avoid, reduce or mitgate negatve impacts.