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Transport Secretary launches HS2 review to deal with spiralling costs

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The government has announced urgent action to control the spiralling costs of HS2 and bring the project back on track, with the potential for HS2 contracts being renegotiated or amended.

HS2 artist impression.
Credit: HS2.

Transport secretary Louise Haigh has launched an independent review to ensure lessons are learned and ensure costs for HS2 are being brought under control. 

Haigh warned the failure to deliver to budget represents a significant challenge inherited on HS2.

Since work first began in 2017, the cost of Phase One has soared, due to “poor project management, inflation and poor performance from the supply chain”. 

The Major Transport Projects Governance and Assurance Review will be led by senior infrastructure delivery adviser, James Stewart.

The incentives of the main HS2 contractors are also being reviewed, which could lead to some contracts being renegotiated or amended.

As part of the effort to get a grip on costs, the management of HS2 Ltd is set to be taken over by a new chief executive, Mark Wild, will be tasked with providing an action plan to deliver the remaining work as cost effectively as possible.

The government will also continue to publish six-monthly reports on the progress of HS2.

In 2023, former prime minister Rishi Sunak scrapped construction of the northern phase of HS2 connecting Birmingham and Manchester

A report by the National Audit Office revealed remediation work to close down Phase Two will take three years to complete at a cost of up to £100 million.

The government has said it is not resurrecting Phase Two of HS2, despite concerns about connectivity between Birmingham and Manchester.

The Secretary of State made the primary focus the safe delivery of HS2 between Birmingham and London at the lowest cost, which Haigh has made clear to HS2 Ltd.

The government is also reinstating ministerial oversight of the project to ensure greater accountability. 

This will see regular meetings where the Transport Secretary alongside Rail Minister, Lord Hendy, and Chief Secretary to the Treasury, will challenge delivery and remove obstacles to delivering the railway more cost effectively.  

Transport Secretary Louise Haigh said: “One of my first jobs as Transport Secretary has been to urgently review the position I have inherited on HS2.   

“It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming Transport Secretary I have seen up close the scale of failure in project delivery – and it’s dire.

“Taxpayers have a right to expect HS2 is delivered efficiently and I won’t stand for anything less. 

“I have promised to work fast and fix things and that’s exactly why I have announced urgent measures to get a grip on HS2’s costs and ensure taxpayers’ money is put to good use.  

“It’s high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again.”

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