The Department for Transport has warned MPs that a revised business case for the pared-back High Speed Two rail project will not be available until “early 2026”.
Its admission came in a just-published letter from DfT permanent secretary Dame Bernadette Kelly to Public Accounts Committee chair Sir Geoffrey Clifton-Brown.
The new timescale represents a delay of more than a year compared with earlier plans.
Last month, the committee dubbed HS2 – originally supposed to be a high-speed rail network connecting Birmingham, Manchester and Leeds with London – as “a casebook example of how not to run a major project”.
PAC bemoaned skills shortages in DfT and its wholly-owned delivery company HS2 Ltd, and noted that the two organisations had “failed to work together effectively", exemplified by continued disagreement over the project’s cost.
In October 2023, then-prime minister Rishi Sunak announced the cancellation of plans for the HS2 line to connect Birmingham and Manchester. The Leeds link had been effectively scrapped in November 2021 but plans for an East Midlands spur of the network remained until Sunak’s Conservative Party conference announcement.
PAC’s February report contrasted DfT’s November 2023 cost estimate of £45bn-£54bn with HS2 Ltd’s June 2024 estimate of £54bn-£66bn, both presented in “2019 prices”. The committee said inflation adjustments could add another £10bn to the bill, potentially bringing it “close to £80bn”.
The report states: “It is unacceptable that over a decade into the programme, we still do not know what [HS2] will cost, what the final scope will be, when it will finally be completed or what benefits it will deliver."
DfT perm sec Kelly’s latest letter to the committee, dated 27 February but only published yesterday, is an update on her department’s progress with earlier PAC recommendations from a year-old report on the pared-back plans for HS2.
MPs had originally requested a revised business case for HS2, setting out what benefits the line’s first phase would deliver, and how success would be measured, that was to be delivered last year. They also sought a “benefits realisation plan” from DfT, including how the department will work across government and with local authorities to “deliver the outcomes it seeks”. That was also targeted for delivery last year.
In her letter, Kelly said “revised” target implementation dates of early 2026 have now been set for the recommendations, coinciding with the expected publication of a business case for delivering the November 2023 changes to the programme.
“Before producing an updated business case, the programme needs to be reset and the secretary of state has tasked the new chief executive of HS2 Ltd, Mark Wild, to review the remaining scope, the cost and schedule needed to complete Phase 1 and advise the government on what is required,” the perm sec wrote.
“The department is planning to publish an updated programme business case in early 2026 after an agreed cost estimate is produced following the programme reset. The updated programme business case will include information related to the benefits realisation and evaluation.”
Wild, who was drafted in to complete the delivery of London’s delayed and over-budget Crossrail project in 2018, took up his position at HS2 Ltd in December.
Kelly said Wild has been asked to provide an “initial assessment” of HS2's current position and how he intends to reset the programme by spring 2025.
“HS2 Ltd is also continuing to work with the principal suppliers to ensure focus on the cost-effective delivery of the remainder of the civil works," she added. “The department will provide an update on that work in forthcoming reports to parliament, subject to commercially sensitive details.”
Sunak’s October 2023 scaling back of HS2 included taking responsibility for building the line’s London terminus away from HS2 Ltd. Instead, Sunak said a development corporation would be set up to for the Euston area, leveraging private sector funding to deliver a new HS2 station and thousands of new homes.
At the time of the announcement, HS2 services between Birmingham and Old Oak Common in west London were expected to commence between 2029 and 2033. No indication of when services would reach Euston was given.
A National Audit Office report on the changes to the HS2 brief, published last summer, said DfT expected it "may be several years" before all of the arrangements for Euston were in place.