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MPs fear HS2 cost spiral

An influential panel of MPs has called for the government to publish plans to limit the use of contingency funding on the £43bn High Speed 2 (HS2) project.

The Public Accounts Committee (PAC) said the Department for Transport had to reassure taxpayers about spending on the proposed rapid rail link.

A total of £42.6bn has been set aside to construct the line linking London with the North, including £14.4bn of contingency.

But the PAC said in a report this morning that this comfortable level of back-up cash could be used to mask overspend on the actual budget.

“We are sceptical about whether the Department can deliver value for money for the taxpayer on HS2,” says the study.

“Value for money will depend not only on the programme coming in within its funding, but also on the use of contingency funds being properly controlled.

“The Department should set out how it will control use of contingency on HS2 and other projects, to provide assurance that generous contingency funds will not be used to hide cost overruns.”

The committee suggested High Speed 3 (HS3) – linking Manchester and Leeds – could have been started before HS2. It criticised the government for failing to make a strategic judgement on this.

“[The DfT] did not provide a clear explanation for why an assessment of a high speed rail line between cities in the North of England (so-called HS3) was not carried out before HS2, to test whether improving connectivity in the North was a greater priority,” said the report.

“We are also concerned that the Department continues to have a narrow geographical focus. For example, it is still to publish proposals for how Scotland will benefit from HS2, including whether the route will be extended into Scotland.”

The MPs called for the government to set out its UK transport strategy strategy for the next 30 years.

A Department for Transport spokesman said: “It is the role of the PAC to ask questions that major projects like HS2 need to address as they move from planning to delivery. This scrutiny is welcome. The report sets out some of those questions in detail and acknowledges that progress is being made. 

“HS2 will have a transformational effect, rebalancing the economy and helping secure the UK’s future prosperity, providing high value for money to the taxpayer. With Sir David Higgins as chairman of HS2 Ltd, we are fully focused on keeping costs down and are determined that this vital part of the government’s long-term economic plan will be built on time and within budget. As the project moves forward towards construction we will continue to address the issues raised by the PAC, and in particular value for money.”

Readers' comments (1)

  • This HS2 project has got to be stopped NOW...there are far more useful areas in which to invest - the return on HS2 investment is minimal, it is for the rich, it saves minimal time, it would serve a tiny minority, it will spiral way beyond the £42.6bn.......what more do we need to STOP THIS NONSENSE.
    Jim Barrack

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