Background to the report

The High Speed Two (HS2) programme aims to construct a new high speed, high-capacity railway between London, the West Midlands and the north of England. HS2 is the government’s largest infrastructure programme by value and many of its component parts are large and complex projects in their own rights. Phase One of the programme is under construction and covers the route between London and the West Midlands. Euston will be the London terminus station for HS2.

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In January 2020 we reported that the work at Euston was more complex than DfT had originally anticipated and that there was uncertainty over the HS2 station design. The design at that time was for 11 platforms to be built in two stages. Government commissioned the Oakervee Review (the Review), which published in February 2020 and concluded that the HS2 Euston station design and approach were not satisfactory: it added unnecessary cost, did not meet stakeholders’ ambitions and there was limited joined-up thinking between work on the HS2 station and the Network Rail station.

Scope of the report

Following the changes to the HS2 Euston station since we last reported in January 2020, this report assesses whether DfT and HS2 Ltd are now set up to effectively manage the risks to value for money at Euston station. We examine:

  • whether DfT and HS2 Ltd have addressed the issues identified in early 2020 relating to the scope of the HS2 Euston station design and whether they are managing to stay within budget
  • what steps DfT has taken to improve its governance and integration arrangements across the three projects within the wider Euston programme and whether appropriate delivery arrangements are now in place to achieve value for money

We do not examine progress on the rest of the HS2 programme or undertake a detailed examination of the other two projects at the Euston site. The fieldwork for this report was completed ahead of the decisions by DfT and HS2 Ltd in March 2023 on how to manage wider inflationary cost pressures. We have not examined the steps taken by HS2 Ltd and DfT to manage affordability on the wider HS2 programme and its impact on the Euston station project. All costs are in 2019 prices unless otherwise indicated.

Conclusions

DfT’s and HS2 Ltd’s attempt to reset the programme since 2020 has not succeeded and further action is now required to develop an affordable and viable station. DfT and HS2 Ltd have been working to reach an affordable solution since 2015, but this highly complex project continues to present significant challenges. While it was necessary to look again at the design and costs of the station in 2020, the budget for Euston station was fixed too early and too low for what was intended to be achieved. DfT and HS2 Ltd have made efforts to reduce costs and improve governance. However, they have not been able to develop an affordable scope that is integrated with other activity at Euston and a further reset is required.

The changes DfT has announced to the HS2 programme provide the time that may allow it and HS2 Ltd to move the Euston project forward on a more stable footing. However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially to higher spend overall for the project that will need to be managed closely. A successful reset will need DfT and HS2 Ltd to have a clear understanding of the costs, risks and benefits of their chosen design for the HS2 station within the wider Euston programme, supported by a realistic budget, clear and effective governance and integration arrangements, and long-term certainty on the scope of the project. DfT and HS2 Ltd cannot yet demonstrate that the conditions are in place to secure value for money.

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Publication details

Press release

View press release (27 Mar 2023)

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