HS2: London to Birmingham route without Manchester link will be ‘very poor value for money’, MPs warn

Completing the High Speed Two line between London and Birmingham without the extension to Manchester will be “very poor value for money,” MPS have warned.

In a report, the Public Accounts Committee (PAC) said the Department for Transport (DfT) did not “yet understand” how HS2 would operate as a “functioning railway” following recent changes.

Costs have continued to escalate and an accurate forecast for the final HS2 tally is still unknown, with “insufficient senior level focus on cost control,” the PAC added.

The report pulls into focus Prime Minister Rishi Sunak’s highly controversial decision to axe the northern leg of the route in October.

The embattled project has been marred by delays, inflation and its business case has been heavily criticised. The total budget could now reach upwards of £100b, from an initial estimate of around £33bn.

Committee Chair Dame Meg Hillier said: “HS2 is the biggest ticket item by value on the government’s books for infrastructure projects.

“But, here we are after over a decade of our warnings on HS2’s management and spiralling costs, locked into the costly completion of a curtailed rump of a project and many unanswered questions and risks still attached to delivery of even this curtailed project.”

Following the scrapping of the Manchester leg, HS2 will now run between Euston, Central London and Birmingham. However, the Euston terminus has itself faced a string of setbacks and is currently paused indefinitely.

The government is banking on private investment to guarantee HS2 runs into London, as opposed to Old Oak Common in the Western suburbs. It is aiming to save around £6.5bn of taxpayers’ money through the idea.

But the PAC report said it was “highly sceptical” that the DfT would be able to attract private sector cash for Euston, pouring cold water on the plan.

“The Department does not yet have a plausible or detailed proposition it could take to the market and it is likely to take significant time to develop one,” it reads.

Sir John Armitt, Chair of the National Infrastructure Comission has said the private sector would not fund the expensive tunnel under London, which would connect HS2 to Euston.

“There are urgent decisions the Department must make on funding the tunnelling from Old Oak Common to Euston or it will incur much greater costs from stopping and restarting work,” the PAC noted.

The boss of Mace, the construction firm contracted to deliver Euston, recently told City A.M. in an interview the government had been ignoring proposals on how it could utilise the private sector.

A spokesperson for HS2 Ltd said: “We’ve been clear about our cost challenges, which have been compounded by significant levels of inflation. HS2 Ltd is now under new leadership and implementing changes across the programme aimed at controlling costs and learning the lessons of the past.”

A spokesperson for the Department for Transport said: “We disagree with the committee’s assessment. Their estimated cost figure for Phase 1 also does not reflect our decision to secure private funding for Euston, or the direction not to proceed beyond the Midlands.”

They added that plans for the Euston station had already received extensive support from the private sector to invest, offering a regeneration opportunity similar to that seen in the Battersea area in London around the Nine Elms station.

“The permanent secretary has already written to the committee chair setting out her assessment on value for money, and we have repeatedly made clear we will continue to deliver HS2 at the lowest reasonable cost, in a way that provides value for taxpayers,” they added.