Background to the report
The High Speed Two (HS2) programme aimed to construct a
high-speed, high-capacity railway between London and Manchester
via Birmingham.
The Department for Transport (DfT) is the programme's sponsor,
responsible for funding and overseeing delivery. High Speed Two
Limited (HS2 Ltd), an arm's-length body of DfT, is responsible
for delivering an operational railway.
In October 2023, the government announced significant changes to
the HS2 programme, including the cancellation of Phase 2 of the
railway from the West Midlands to Manchester, and a smaller HS2
station in London Euston.
The government took these decisions due to increasing costs of
Phase 1, repeated delays to the schedule and changing patterns of
travel since the COVID-19 pandemic, which it considered to have
weakened the case for HS2.
Following the October 2023 announcement, DfT and HS2 Ltd began
work to fully understand the implications for the programme. This
included confirming the revised scope of Phase 1, identifying how
HS2 Ltd would close down Phase 2, and determining how DfT would
deliver and fund the HS2 station at Euston.
Scope of the report
This report examines whether DfT and HS2 Ltd are effectively
managing their response to the changes in the HS2 programme to
protect and maximise value for money.
It assesses DfT's and HS2 Ltd's progress in:
- responding to the changes and managing the risks
- resolving key issues that will allow them to reset and
deliver the programme
Conclusion
As soon as government announced plans to cancel Phase 2, DfT and
HS2 Ltd started work to understand and respond to immediate risks
to value for money. They established what decisions were needed
on the scope of Phase 1 to minimise unnecessary costs and
established plans to decommission Phase 2 sites.
DfT's work to dispose of land and property is at an early stage,
but its plans for a small number of potential sales provide the
opportunity for DfT to learn from this in developing its wider
disposals strategy.
While HS2 is now a smaller programme, it remains by any measure
an extremely large and complex endeavour, and DfT and HS2 Ltd
need to reset the programme successfully to avoid repeating past
failures and maximise its value.
To do this, they will need to be clear on what benefits they now
want the programme to achieve and how they plan to achieve them,
agree a realistic budget to deliver them, and re-establish
control so that risks and costs can be managed effectively and
benefits delivered for both passengers and taxpayers.
DfT and HS2 Ltd must now take the time needed to properly reset,
and set themselves up to deliver value for money from the
programme.
