Ministers accused of 'incompetence' as HS2 chair admits project faces £22bn overspend and seven-year delay

Posted On: 
3rd September 2019

Ministers have been accused of "incompetence" after the chairman of the HS2 rail project admitted it could cost an extra £22bn and face a seven-year delay.

Grant Shapps said the HS2 chair does not believe the project's final phase will be finished until 2040
Credit: 
PA Images

Labour said the Government had consistently failed to oversee the project's finances and governance, while the Liberal Democrats said taxpayers should not have to hand it a "blank cheque".

The figures come just weeks after ministers launched an independent probe into whether the high speed rail programme should proceed.

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Transport Secretary Grant Shapps said HS2 chairman Allan Cook believed its budget should be raised to from £56bn to £78bn and admitted the first phase may not be ready until 2031, despite a target date of 2026.

It was also claimed that the second phase to Manchester and Leeds may not open until 2040, despite being due to launch in 2033.

In a written statement to Parliament, the Cabinet minister said: “Colleagues will see that the Chairman of HS2 does not believe that the current scheme design can be delivered within the budget of £55.7 billion, set in 2015 prices.

“Instead he estimates that the current scheme requires a total budget - including contingency - in the range of £72 to £78 billion, again in 2015 prices.

“Regarding schedule, the Chairman does not believe the current schedule of 2026 for initial services on Phase One is realistic. In line with lessons from other major transport infrastructure projects, his advice proposes a range of dates for the start of service.

“He recommends 2028 to 2031 for Phase One - with a staged opening, starting with initial services between London Old Oak Common and Birmingham Curzon Street, followed by services to and from London Euston later.

“He expects Phase 2b, the full high-speed line to Manchester and Leeds, to open between 2035 and 2040.”

Mr Shapps, said that based on 2019 prices, the high speed line could end up costing between £81bn and £88bn - against a budget of £62bn.

Boris Johnson last month confirmed that former HS2 chairman Douglas Oakervee will examine the “benefits and impacts” as well as the “deliverability and scope” of the scheme before reporting back to ministers in the autumn.

Mr Shapps said at the time: “The Prime Minister has been clear that transport infrastructure has the potential to drive economic growth, redistribute opportunity and support towns and cities across the UK.

“But that investments must be subject to continuous assessment of their costs and benefits.”

Mr Johnson has previously expressed concerns over the cost of HS2, by insisting during the summer's Tory leadership contest that it was "a legitimate question to ask about how the money is being spent".

'UTTERLY INCOMPETENT'

Shadow Transport Secretary Andy McDonald said: “Successive Conservative Transport Ministers have shown themselves to be utterly incompetent and unable to oversee the finances and governance of HS2, among other infrastructure projects.

“This government has misled both Parliament and the public about the cost of HS2. People need to have confidence in the project, so this delay is bad news for the UK transport system as a whole and the north of England in particular.

“Labour will bring our railways into public ownership so they are run in the interests of passengers, not for private profit, to deliver significantly improved services and affordable fares.”

Liberal Democrat MP, Tim Farron said: “It is shameful that the Conservative Government have attempted to bury the bad news of a £20bn overspend and a seven-year overrun on High Speed 2.

"Taxpayers have a right to know where their money is being spent and deserve better than having it brushed under the carpet.

“HS2 is a vital project that will help unlock the economic potential of the North of England, however it is not one that should have a blank cheque."