Ministers are taking greater oversight of HS2 in a bid to tackle “dire” project delivery, the transport secretary has announced.
Regular meetings among top ministers was among a raft of measures promised by Louis Haigh yesterday (20 October), as she warned the cost of the rail mega-project has risen uncontrollably.
Haigh pledged that meetings with rail minister Lord Hendy and chief secretary to the treasury Darren Jones would aim to produce greater accountability and deliver the railway more cost-effectively.
She said: “It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming transport secretary I have seen up close the scale of failure in project delivery – and it’s dire.
“It’s high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again.”
Jon Thompson, chair of HS2 Ltd (the company responsible for developing the high-speed line) said in January that the cost of delivering the London-Birmingham route might reach up to £67bn in 2023/24 prices – up from the original estimate of £37.5bn in 2009 prices.
Haigh also announced an independent review into the delivery of major transport projects, which would draw mainly on the experience of building HS2.
The Major Transport Projects Governance and Assurance review, led by infrastructure consultant James Stewart, is due to provide recommendations to government this winter.
It will investigate the effectiveness of cost forecasting and reporting and offer suggestions to make costs more efficient, both on the rest of HS2 and on future projects.
The Department for Transport emphasised it would not revive the rail line’s planned second leg from Birmingham to Manchester, which former prime minister Rishi Sunak cancelled in October 2023.
Haigh also emphasised ongoing efforts to renegotiate contracts with the main HS2 contractors, which Thompson revealed to the Public Accounts Committee last November.
Thompson said at the time he would consider offering those contractors higher profit margins if they lowered overall cost.
He later warned during a transport select committee hearing that although his organisation is attempting to renegotiate contracts, he could not guarantee they would be able to reduce the cost.
An HS2 Ltd spokesperson said the contracts were designed to reduce the construction industry’s risk exposure in the wake of Carillion’s collapse in 2018.
They added the organisation is working with its supply chain to improve incentives in contracts to deliver better value for money.
“This process is ongoing and will be a priority for our new CEO Mark Wild, who will join HS2 Ltd soon,” they said.
Haigh will task Wild, who has yet to take up his role, to assess the project’s current cost position and provide an action plan to mitigate costs on the remaining work.
In addition, Haigh has written to Thompson asking for immediate action to bring costs under control.
A spokesperson for HS2 Ltd said the organisation was committed to working with government to improve delivery and looked forward to the recommendations of Stewart’s review.
They added. “HS2 Ltd recognises that there are many lessons to be learned from delivery to date and, under new leadership, are actively implementing the changes within our control to stablise costs.”
