MPs have slated the Department for Transport (DfT) over its handling of paused plans for an HS2 station at Euston and accused ministers of a lack of transparency over ‘wildly unrealistic’ cost estimates.
In what it itself described as ‘a highly critical report’, the Public Accounts Committee (PAC) said the department still does not know what it is trying to achieve with, ‘despite spending over eight years planning and designing it’.
The PAC called on the DfT to use the pause in construction on the project announced in March to finally establish the design and expectations for the station against what it is willing to spend.
MPs said the DfT does not yet know the costs and impacts of the pause for the local community, with work still to be done on making the site safe and potentially useable by local residents during the pause.
The PAC said it is also unconvinced that the impact for the DfT’s supply chain, in particular for smaller businesses involved in the works, will be mitigated by their employment elsewhere on the HS2 scheme.
Committee chair Dame Meg Hillier MP said: ‘The HS2 Euston project is floundering. This is a multi-billion pound scheme which has already caused major disruption to the local community put on pause. The pause, ostensibly to save money, is not cost free – mothballing and possible compensation for businesses which have lost work will all need to be added to the HS2 tally.
‘The Government must now be clear what it is trying to achieve with this new station, and how it will benefit the public.’
Noting that the pause followed estimates of a £4.8bn construction cost, compared to an original £2.6bn budget that was ‘completely unrealistic’, MPs said previous updates to Parliament on cost pressures at Euston did not disclose the risks that construction costs could be significantly higher than expected.
Dame Meg added: ‘Our report finds that a wildly unrealistic budget for HS2 Euston was set in 2020 in the expectation that it would be revised. The Government must demonstrate that that it is not just repeating the same mistakes of unrealistic costings. HS2 Euston has shown us that forging ahead over-optimistically in an unclear direction is clearly not the right approach.’
The PAC said questions also remain as to how the Government will manage high levels of inflation on the HS2 programme.
It said that although the Treasury has made clear that departments are expected to absorb higher costs within existing cash budgets, the DfT and Treasury have not yet reached an understanding on how to deal with this without taking decisions which would risk poor value for money on the project, including further reductions in spending.
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