Heidi Alexander has told MPs she is “drawing a line in the sand” on HS2 after confirming the rail project will face yet more delays and cost increases.
Years of mismanagement and botched decision-making have held the project back, the Transport Secretary said.
She revealed that costs on HS2 escalated by £37bn between 2012 and 2024 when Labour came into Government, arguing that successive Conservative governments are ultimately responsible.
Critics, including Reform leader Nigel Farage and Labour peer Lord Berkeley, believe it is still not too late for the project to be scrapped entirely.
But Alexander has resisted those calls and insisted her Government will now get a “grip” and deliver a railway the country “can be proud of.”
Here, The i Paper takes a closer look at what went wrong according to the Government’s review, carried out by former KPMG and Crossrail boss James Stewart.
HS2 has been too exposed to what Mr Stewart calls simply “politics”.
Although any large-scale, multi-decade project will be impacted by the political winds of the day, other comparator projects have had a “buffer” in the form of external shareholders or joint sponsors.
HS2 has had no such buffers and has been subject to “evolving political aims”, the report says.
The most obvious examples are the decision to cancel the HS2 East route to Leeds in 2021 and then the northern leg to Manchester in 2023.
Since 1 January 2020, there have been four Prime Ministers, six Chancellors, and five Secretaries of State for Transport, and HS2 has been operating in a period of“unprecedented political instability”, Mr Stewart says.
The project ‘started wrong’ – then got worse
Key decisions about HS2 were made because of “pressure from politicians to maintain momentum”, the report says.
Too often, having a schedule for when things would happen was prioritised over getting them right.
“Think slow, act fast” and “projects don’t go wrong, they start wrong” are two mantras that have not been heeded at HS2, Mr Stewart says.
Although design and specification have changed over the years, there has been a fundamental shift to build “the best” railway, which has led to failure at HS2, the report says.
This vision “drove the scope and dramatically increased cost”, Mr Stewart says.
“It also took the project away from the initial premise of increasing network capacity,” he adds.
Mr Stewart also makes reference to the idea of “gold plating” – the concept that Britain has had a culture of choosing “iconic” and “state of the art” engineering solutions.
He says steps should have been taken to draw back from this approach, and this would have kept costs down.
Trust between government and HS2 has ‘broken down’
There has been a fundamental breakdown in trust between the government and HS2 Ltd, the publicly owned company set up to deliver the high-speed railway.
The organisation employs around 1,500 people, with the majority working at the headquarters in Birmingham.
Mr Stewart says the “significant and consistent” cost overruns have resulted in a lack of trust between HS2 Ltd and the Department for Transport.
HS2 workers at the Birmingham section of the high speed rail project (Photo: Ryan Jenkinson/Getty)This came to a head in the summer of 2023, shortly before Rishi Sunak axed the northern leg to Manchester.
MPs heard before Christmas last year that DfT and HS2 Ltd are still not able to agree on a revised cost of delivery of Phase One and a completion date.
Mr Stewart warns: “If this breakdown in trust is allowed to continue, it will undermine the future delivery of the Programme and the confidence of wider stakeholders.”
The biggest contributor to increases in cost at HS2 is the Main Works Civils Contracts (MWCCs) – these are the agreements to deliver bridges, tunnels, groundwork, cuttings and embankments to prepare for the railway track.
HS2’s new chief executive, Mark Wild, revealed last month that only a third of the civils work is complete when it should be between 70 per cent to 80 per cent.
The i Paper revealed that just 15 of the 310 structures needed for the high-speed railway line are finished, according to HS2’s latest update, despite £32bn having been spent on construction in five years.
Rishi Sunak axed HS2 north of BirminghamNot a single railway track has been laid.
HS2 Ltd must take “prime responsibility” for this poor performance, but others who signed off the contracts in government, including the Treasury, are also to blame, Mr Stewart says.
“The supply chain also has to take its share of the responsibility, as it has largelyfailed to deliver under the partnership agreements and contracts it signed up to,” he adds.
Constant criticism is ‘demoralising’
Mr Stewart argues that HS2 is now subject to “constant criticism” and while this is “inevitable” due to its recent history, that must now change.
He says government ministers must now start advocating for HS2 and their benefits.
“Continued criticism is demoralising and a return to advocacy wouldhelp attract and retain talent into the Programme and increase employee engagement,” he adds.
In 2013, the former Conservative-Lib Dem Government brought forward its first “hybrid” Bill in Parliament – essentially a piece of both public and private legislation which granted powers to build Phase One of HS2 between London and Birmingham.
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Despite this legislation having passed, HS2 has still required more than 8,000 planning consents to date.
There have been constant disputes with local residents and their authorities over things such as changes to roads and buildings, many of which have been taken all the way to a Judicial Review in the courts.
Contracts for HS2 were drawn up on the basis that consents would take up to 56 days to be approved – in practice, they have taken far longer, in some cases over a year.
“Without significant reform to the UK planning consenting process, HS2 and other major infrastructure projects will continue to face cost and schedule delay,” Mr Stewart says.
External factors
Unexpected and unprecedented external factors, some beyond the Government’s control, have also had a significant impact on the delivery of HS2.
They include Brexit, the war in Ukraine, the Covid-19 pandemic and a period of high inflation.
But ultimately, the Government and HS2 Ltd have “failed to be able to deliver a project of the original scale and size of HS2.”
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