HS2 an example of ‘how not to run a major project’, report finds

HS2 is an example of “how not to run a major project” and the Government “must not waste” its latest opportunity to reset the programme, an influential group of MPs has warned.

The Department for Transport (DfT) has “failed in its oversight and financial control” of the scheme, the Commons Public Accounts Committee (PAC) said.

The cross-party group of MPs warned there is “a reputational risk to the UK” because of the project.

In its damning report, the PAC said HS2 Ltd – the Government-owned company responsible for building the high-speed railway – and the DfT have “failed to work together effectively”.

This is “starkly illustrated by their continued disagreement” over how much it will cost to build the line from London to the West Midlands, it stated.

The DfT’s estimated range in November 2023 was £45 billion to £54 billion, while HS2 Ltd’s latest estimate in June 2024 was between £54 billion and £66 billion.

All these figures were in 2019 prices.

Once adjusted for inflation, the cost “might be close to £80 billion”, according to the report.

“Casebook example”

The PAC said: “The HS2 programme has become a casebook example of how not to run a major project.

“It is unacceptable that over a decade into the programme we still do not know what it will cost, what the final scope will be, when it will finally be completed or what benefits it will deliver.”

Shortly after joining HS2 Ltd as chief executive at the start of December 2024, Mark Wild said the project was “in a very serious situation that requires a fundamental reset”.

In October last year, then-prime minister Rishi Sunak cancelled a plan to extend HS2 between the West Midlands and Manchester.

The planned leg to Leeds was axed in November 2021.

A previous review was carried out in 2020 because of escalating costs and delays.

The PAC said: “The department and HS2 Ltd must not waste this latest opportunity to reset the programme properly, learning lessons from past mistakes and maximising for the taxpayer what value they can from this huge investment.”

The committee noted there are “significant risks” with the redevelopment of London’s Euston station.

The Government confirmed in October 2024 it would pay for tunnelling work to the station from Old Oak Common in the west London suburbs.

But it is “unclear how achievable” the DfT’s goal of Euston’s redevelopment being privately-funded is, the PAC said.

The committee also highlighted the building of a bat protection tunnel in Buckinghamshire costing more than £100 million as an example of how HS2 Ltd’s efforts to reduce the environmental impact of the project are “not delivering value for money”.

“A cautionary tale”

Conservative MP Sir Geoffrey Clifton-Brown MP, who chairs the committee, said: “It is time to deal with HS2 as what it is – a cautionary tale that should be studied by future governments in how not to run a major project.

“We are sceptical of the Government’s ability to successfully deliver even a curtailed scheme, one which we already know will on its face bring very poor value for money.

“The question has instead become: what possible benefit can the Government now salvage for the taxpayer, from a mess that presents real risks to the UK’s overall reputation?”

He added: “It is ultimately the Department for Transport that has failed to manage this enormous project and manage HS2 properly.

“This is likely to have wasted billions of pounds of taxpayers’ money in delays and overspends.”

A spokesperson for HS2 Ltd said: “Mark Wild, our new chief executive, agrees with the committee’s conclusion that there has been failure in the management of HS2’s cost and schedule.

“He is taking decisive action to get the project back on track at the lowest feasible cost.

“His fundamental reset is critical to ensure the successful delivery of HS2’s goals – driving economic growth and connecting our biggest cities with fast and reliable journeys.”

The DfT was approached for a comment.