HS2 offers “very poor value for money” after the cancellation of its northern leg, according to the Public Accounts Committee.
In a report published yesterday (6 February), the committee said that non-departmental public body HS2 Ltd and the Department for Transport (DfT) do not know the costs of the scheme and what it expects the final benefits to be.
The committee also said it was “highly sceptical” that the DfT would be able to attract the private investment to build HS2 infrastructure at Euston station.
Committee chair Dame Meg Hillier said: “HS2 is the biggest-ticket item by value on the government’s books for infrastructure projects.
“As such, it was crying out for a steady hand at the tiller from the start.
“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 with many unanswered questions and risks still attached to delivery of even this curtailed project.”
Prime minister Rishi Sunak decided to cut the project north of Birmingham in October last year, pledging to invest the £36bn the government would have spent on the line on transport projects in the North and Midlands.
The committee urged the DfT to confirm where the £36bn will be redirected and how the portfolio of projects will be managed in the long term.
The report called on the department to to revise its business case for the first phase of HS2, saying the project “now offers very poor value for money”.
It pointed out that officials had acknowledged that the costs of building just phase one would “significantly outweigh benefits”.
In addition, poor cost management amounted to a “failure of governance and oversight” from HS2 Ltd and the DfT, it said.
The committee also urged the DfT to complete phase one within the current estimated timeframe of 2029-33 in order to maximise value for the taxpayer.
The report also criticised the department for lacking a plan to attract private investment towards developing Euston station.
It said the department lacks a “plausible or detailed proposition” for a financing model it could take to market and would need a lot of time to develop one.
The Public Accounts Committee also called for a decision on tunnelling from Old Oak Common to Euston, in order to avoid further costs from stopping and starting work.
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 is implementing changes across the programme aimed at controlling costs and learning the lessons of the past.”