Value for Money
High Speed Two: Euston
Published 27 March 2023
6 recommendations
Department for Transport
Managing major projectsProject and service deliveryRailTransport
nao.org.uk
The government should use the two-year pause on new construction work at HS2 Euston to develop a design that is affordable, deliverable and value for money, according to a new National Audit Office report.
Recommendations (6)
Source: NAO Recommendations Tracker
Department for Transport
Rec 1
Accepted
Work in Progress
As part of planning an affordable and deliverable station, DfT and HS2 Ltd should learn lessons from how other projects have approached a reset, including those we set out in our report on resetting major programmes. This will include having clear aims for the reset and establishing clear measures to monitor its success.
Department for Transport
Rec 2
Accepted
Work in Progress
DfT should work with the Euston Partnership, HS2 Ltd, Network Rail, Lendlease and local partners to clarify a shared understanding and expectations for the Euston programme in light of the changes and the affordability challenge. This should include reviewing or revisiting:
? the risks and opportunities that the change provides and how these are managed;
? the budget for the project against the shared expectations for the programme;
? the benefits DfT and other stakeholders will look to achieve, which will assist with further trade-off decisions across the programme;
? how it can help HS2 Ltd and Network Rail establish the culture required for effective collaboration across its delivery partners and wider stakeholders;
? the roles of each partner in the decision-making processes; and
? what authority can be delegated to the Euston Partnership, HS2 Ltd and Network Rail to help ensure timely decision-making, particularly where trade-offs need to be made.
Department for Transport
Rec 3
Accepted
Work in Progress
DfT should ensure that the decisions it and HM Treasury make on the Network Rail station?s outline business case provide the long-term clarity required on the extent to which the two stations need to integrate. This should reduce the risk of further change to the HS2 station design from integration with the Network Rail station.
Department for Transport
Rec 4
Accepted
No Longer Relevant
DfT and HS2 Ltd should apply the lessons from Euston to the HS2 Manchester stations and other parts of Phase 2b of the HS2 programme. These should include:
? ensuring that a robust estimate is used to set the budget and contingency, supported by appropriate assurance and a clear understanding of how cost risks are shared; and
? putting in place appropriate governance arrangements that fully support integration and collaboration between the expected range of stakeholders involved. Such arrangements should be identified from the start to avoid being constrained by future decisions.
Department for Transport
Rec 5
Accepted
Work in Progress
DfT should revise the anticipated HS2 programme schedule, costs and benefits to reflect recent decisions on scope and schedule.
Department for Transport
Rec 6
Accepted
Work in Progress
DfT, HS2 Ltd and HM Treasury should consider how best to manage the budget for the HS2 programme to best protect value for money. This should include consideration of:
? re-setting HS2 budgets and costs in 2023 prices to maintain a clearer view of costs, and agreeing how regularly these should be re-baselined in future;
? whether inflation risk is best held by DfT or with HM Treasury on a programme of this size, given the difficulty of managing it at a departmental level;
? how far forward annual budgets can be reasonably set when there are high levels of uncertainty around inflation;
? revisiting financial controls that allow for flexibility in spend between years, and whether these need to be increased; and
? identifying opportunities for contractual changes with the supply chain that will incentivise management of costs and inflation.