Background to the report

The High Speed Two (HS2) programme aimed to construct a high-speed, high-capacity railway between London and Manchester via Birmingham.

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The Department for Transport (DfT) is the programme’s sponsor, responsible for funding and overseeing delivery. High Speed Two Limited (HS2 Ltd), an arm’s-length body of DfT, is responsible for delivering an operational railway.

In October 2023, the government announced significant changes to the HS2 programme, including the cancellation of Phase 2 of the railway from the West Midlands to Manchester, and a smaller HS2 station in London Euston.

The government took these decisions due to increasing costs of Phase 1, repeated delays to the schedule and changing patterns of travel since the COVID-19 pandemic, which it considered to have weakened the case for HS2.

Following the October 2023 announcement, DfT and HS2 Ltd began work to fully understand the implications for the programme. This included confirming the revised scope of Phase 1, identifying how HS2 Ltd would close down Phase 2, and determining how DfT would deliver and fund the HS2 station at Euston.

Scope of the report

This report examines whether DfT and HS2 Ltd are effectively managing their response to the changes in the HS2 programme to protect and maximise value for money.

It assesses DfT’s and HS2 Ltd’s progress in:

  • responding to the changes and managing the risks
  • resolving key issues that will allow them to reset and deliver the programme

Video summary

The report director, Jonny Mood, summarises the findings.

Conclusion

As soon as government announced plans to cancel Phase 2, DfT and HS2 Ltd started work to understand and respond to immediate risks to value for money. They established what decisions were needed on the scope of Phase 1 to minimise unnecessary costs and established plans to decommission Phase 2 sites.

DfT’s work to dispose of land and property is at an early stage, but its plans for a small number of potential sales provide the opportunity for DfT to learn from this in developing its wider disposals strategy.

While HS2 is now a smaller programme, it remains by any measure an extremely large and complex endeavour, and DfT and HS2 Ltd need to reset the programme successfully to avoid repeating past failures and maximise its value.

To do this, they will need to be clear on what benefits they now want the programme to achieve and how they plan to achieve them, agree a realistic budget to deliver them, and re-establish control so that risks and costs can be managed effectively and benefits delivered for both passengers and taxpayers.

DfT and HS2 Ltd must now take the time needed to properly reset, and set themselves up to deliver value for money from the programme.

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