Action to control the cost of HS2 and bring the project back on
track has been announced by the Transport Secretary today (20
October 2024) after years of failed delivery.
Just months into the role, has warned the extent of the
challenge inherited on HS2 has become clear, with costs being
allowed to spiral out of control and failure to deliver to
budget.
Over the years, the cost of Phase One has soared, due to poor
project management, inflation and poor performance from the
supply chain, without sufficient explanation of what is to be
done to deliver to budget.
In response, the Secretary of State has launched an independent
review to ensure lessons are learned to support action and to
ensure that the costs for HS2 are brought under control.
The government has been clear it is not resurrecting Phase 2 of
HS2, which was cancelled under the previous administration. The
government recognises concerns about connectivity between
Birmingham and Manchester, but its primary focus now is the safe
delivery of HS2 between Birmingham and London at the lowest
reasonable cost, and the Secretary of State has made this
objective clear to HS2 Ltd.
To achieve this, the government is also reinstating ministerial
oversight of the project to ensure greater accountability. This
will see regular meetings starting immediately, where both the
Transport Secretary and Rail Minister, , alongside the Chief Secretary
to the Treasury, will challenge delivery and remove obstacles to
securing the full benefits of the railway more cost
effectively.
Transport Secretary said:
One of my first jobs as Transport Secretary has been to urgently
review the position I have inherited on HS2.
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.
Taxpayers have a right to expect HS2 is delivered efficiently and
I won't stand for anything less.
I have promised to work fast and fix things and that's exactly
why I have announced urgent measures to get a grip on HS2's costs
and ensure taxpayers' money is put to good use. It's high time
we make sure lessons are learnt and the mistakes of HS2 are never
repeated again.
The Major Transport Projects Governance and Assurance Review will
be led by senior infrastructure delivery adviser, James Stewart,
and will present recommendations back to the government this
winter.
It will investigate the oversight of major transport
infrastructure projects, including the effectiveness of
forecasting and reporting of cost, schedule and benefits, as well
as actions to deliver cost efficiencies. The review will
primarily draw on experiences of HS2 to date to ensure
recommendations and learnings are applied to its delivery as well
as to future projects.
Separately, the incentives of the main HS2 contractors are also
being reviewed, which could lead to some contracts being
renegotiated or amended.
Today's announcement comes as the Transport Secretary writes to
the Chair of HS2 Ltd, recognising the collective responsibility
in reaching the current position, stressing the need to focus
immediately on action to turn things around and bring costs back
under control.
As part of this effort to get a grip on costs, the management of
HS2 Ltd will shortly be taken over by a new Chief Executive, Mark
Wild, who has an extensive background in delivering transport
projects and will be responsible for resetting the project.
On his arrival, the Transport Secretary will task him with
assessing the current position on cost, schedule and culture, and
providing an action plan to deliver the remaining work as cost
effectively as possible, including at a realistic budget and
schedule.
The government will also continue to publish 6-monthly reports on
the progress of HS2, ensuring complete accountability and
transparency on the project's progress.
Today's announcement marks the latest step in the Transport
Secretary's mission to overhaul the railways, ensuring
infrastructure works for the whole country.
