Plans to delay construction of part of the High Speed Two railway line will only serve to increase the ultimate cost of the multi-billion-pound project, the chair of the National Infrastructure Commission has warned.
Sir John Armitt’s observations followed the Department for Transport’s announcement of a two-year “rephase” of construction for the section of the line – known as Phase 2a – that will carry services from the West Midlands to Crewe
In a written statement to parliament, transport secretary Mark Harper said the decision to push back delivery of Phase 2a followed “significant inflationary pressure and increased project costs” for HS2, which was costed at £71bn last year – measured in 2019 prices.
Armitt, whose commission is tasked with advising the government on its infrastructure decisions, questioned the financial benefits of delaying work on in-progress projects.
“Every time you delay a construction project you inevitably increase its costs because some of the costs do not get defrayed – they don’t get stopped, you just run them out for a longer period of time,” he told BBC Radio 4’s Today programme.
“This is clearly a cash flow issue – the government trying to slow down its cash flow. It might slow down the cash flow a little bit [but] it will increase the end cost and it impacts the confidence and the certainty that people have to invest in this country.
“We’re about levelling up, we’re about competing with the world. We don’t level up, we don’t compete with the world if we create uncertainty.”
Harper’s statement to parliament also confirmed delays to a number of road projects, including a two-year delay to the Lower Thames Crossing tunnel scheme to create a new link between Essex and Kent. Work on the crossing had been due to start next year for completion in 2029.
The transport secretary blamed economic fallout from Russia’s invasion of Ukraine and supply-chain disruption stemming from the coronavirus pandemic for spurring “headwinds from inflation” that prompted the infrastructure decisions.
“These headwinds have made it difficult to deliver on our capital programmes, and we recognise that some schemes are going to take longer than expected,” Harper said.
“Refocusing our efforts will allow us to double down on delivering the rest of our capital programme. This will place our transport investments on a sustainable footing and allow us to support the government’s priorities of halving inflation, growing the economy and reducing debt.”
On HS2, Harper said the government was “prioritising” the line’s initial services, which will run between Curzon Street Station in Birmingham and Old Oak Common Station in west London.
He insisted the government was also committed to delivering HS2 services to Euston Station in central London, but would “take the time to ensure we have an affordable and deliverable station design”.
DfT’s annual report and accounts last year indicated that the department effectively wrote off £105.6m of design work on Euston Station when it changed tack on its requirements.
Harper said HS2’s new station at Euston would now be delivered “alongside high-speed infrastructure to Manchester”.
The most recent timescales for HS2’s delivery set a target of 2033 for services to commence between Birmingham and Old Oak Common. Services between London and Manchester had a start window of 2035-41.
Phase 2a of the route, which would have enabled HS2 services to run up to Crewe and on to other parts of the North West, had been due to commence by 2034.
Harper did not specify a new start date for services on that section of HS2.
He said DfT’s aim was for services to Crewe and beyond to start “as soon as possible after accounting for the delay in construction”.