An influential committee of MPs has said the government is unclear about both its ambitions for Euston HS2 station and the costs of stopping construction of the project.
A report by the House of Commons Public Accounts Committee says that despite eight years of planning, the Department for Transport (DfT) “still does not know what it is trying to achieve with the station and what kind of regeneration it will support”. .
In March, the government halted construction of HS2’s new Euston station, as well as Phase 2a of HS2 from Birmingham to Crewe. Euston’s expected costs were later seen to have nearly doubled to £4.8 billion.
The committee says it is now clear that the initial £2.6 billion budget for Euston was “completely unrealistic” and DfT “must use the current construction pause to finally set the station’s design and expectations against with what she is willing to spend.”
He adds that the department “needs to be much clearer to Parliament and the public that the revised budget it sets is realistic and that the station design it approves is affordable and deliverable” before building work restarts.
The DfT’s previous reports to Parliament on HS2 also “now appear to be unrealistic in terms of cost pressures at Euston”, the report says.
He adds that the department “does not yet know the costs and impacts of the construction pause” over the next two years, saying HS2 Ltd “still needs to work with its supply chain and the local community to determine the full scope of costs and impacts”. “.
HS2 Ltd intends to redeploy much of the supply chain to other parts of the scheme. But the committee says “we are not convinced that the impact on the supply chain, particularly on smaller firms, is largely mitigated by their employment elsewhere”.
The committee is calling for an interim report from DfT within three months “on how they and HS2 Ltd are managing the costs of the break, exactly how much has already been spent… and how much more they expect to spend to complete the project”.
This should include an update from HS2 Ltd on “the proportion of Euston’s supply chain, particularly small and medium-sized businesses, that have been re-contracted elsewhere on the HS2 programme”.
The report also warns that the DfT and the Treasury “have not reached a clear understanding of how they would manage high levels of inflation” on HS2, warning that the risk of this “will remain an issue”.
The committee says the government should report back to it within six months on how it will manage the “ongoing consequences” of inflation, as well as arrangements to access the government’s £4.3bn HS2 contingency.
The government is also being urged to show Parliament and the public that it is learning lessons from past rail projects and “not just repeating the same mistakes”.
A statement in June by Rail Minister Huw Merriman said HS2 Euston was “unaffordable” at its current cost. He said the government would use the next two years “to develop a more affordable scheme design that delivers for passengers, the local community and taxpayers”.
A DfT spokesman said: “We remain committed to delivering HS2 from Euston to Manchester in the most cost-effective way for the taxpayer, which is why earlier this year we took the decision to reshape the construction of Euston to help balance the books and the work of the country. in an affordable design for the station.”
They added: “We note the recommendations made in the commission’s report and will respond to them in due course.”
