‘Construction delays will increase cost of HS2 by billions’

by Rory Butler /  March 17, 2023

The warning came amid the announcement of the Spring Budget this week – and after soaring inflation forced transport secretary Mark Harper to reveal the Birmingham to Crewe stretch of HS2 will be delayed by two years. 

Construction Products Association economics director, Noble Francis, said that while Chancellor Jeremy Hunt’s Budget sought to tackle labour shortages and boost investment, including in the construction sector, the rephased construction of HS2 will impact infrastructure and economic activity “in the near term”, and “in the medium term” ramp up the cost of the high-speed rail project by billions of pounds.     

Last week the Government said high inflation and costs had forced the revised delivery.  

It hopes to reduce annual expenditure by spreading costs over a longer time. 

HS2 CEO, Mark Thurston, recently revealed the price of goods and services, including materials, labour and energy, had been “significant” in the past year.     

Shadow transport secretary Louise Haigh recently told MPs in the House of Commons a leaked document by “senior officials” seen by Labour also revealed the delays “will increase costs” and could put construction firms out of business.   

HS2’s initial budget in 2010 was around £33 billion. Recent estimates however put the total between £70 billion and £100 billion.   

“In light of the recently announced delays to HS2, however, the key to the impact of the Budget will be whether government can actually deliver on its announcements,” said Mr Francis.  

“The delays to HS2 announced just before the Budget will hit both infrastructure and economic activity in the near term and increase the cost of HS2 by billions in the medium term.” 

To read what the Spring Budget means for construction, click here.