HS2 running behind schedule and over budget, NAO warns


The HS2 project is already forecast to be running behind schedule and hundreds of millions of pounds over budget for Phase 1 alone, the National Audit Office (NAO) has warned.

None of the track for the project has even been laid, however in a new progress report, costs for Phase 1 are currently forecast to exceed available funding by £204m and auditors warn that the launch date of 2026 for the London to Birmingham section of the line would likely have to be pushed back.

This follows £2bn of savings having already been made on HS2 plans following a spending review last year in which the estimated cost of Phase 2 exceeded available funding by £7bn, leading to total potential savings of £9bn being identified.

The NAO revealed the 2026 Phase 1 opening target was ‘at risk’ and that the Department for Transport’ (DfT) has asked HS2 Ltd, the Government-owned company responsible for the scheme, ‘to revisit the programme schedule in order to increase confidence for delivery from 60 % to 80%, without increasing costs’.

The NAO said the scheme is facing cost and schedule pressures with ‘options for extending the opening date for Phase 1 now being considered’ and ‘steps being taken to bring cost estimates within available funding’.

An artist's impression of HS2 at London's Euston station

Significantly, the NAO warned that: ‘There is a risk that the combined impact of cost and schedule pressures [will] result in reduced programme scope, and lower the benefit cost ratio.'

NAO head Sir Amyas Morse said: ‘HS2 is a large, complex and ambitious programme which is facing cost and time pressures. The unrealistic timetable set for HS2 Ltd by the Department means they are not as ready to deliver as they hoped to be at this point. The Department now needs to get the project working to a timescale that is achievable.’

According to the NAO, the company did not have the capability it had originally planned to reach by July 2015 until May of this year, ‘but did not pass the first review point due to concerns about cost and schedule’.

The report also warns that effective integration of HS2 with the wider UK rail system ‘is challenging and poses risks to value for money’.

Responding to the report, HS2 Ltd chief executive Simon Kirby said: 'The role of the NAO is to challenge projects such as HS2 and through that challenge improve the way they deliver for the taxpayer. This report does this and we accept that challenge. It also, however, recognises the real progress we have made in taking the concept of HS2 and moving it nearer reality.'

Transport Minister Robert Goodwill said the project 'is on track and the National Audit Office agrees' and that it had strong cross party support.

However, Joe Rukin, campaign manager for Stop HS2 said: ‘This is another in a long line of devastating reports about HS2, which in the past no-one has listened to. We can only hope that with a new prime minister on the cards, someone will finally pay attention and cancel this white elephant.’


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