HS2 Will Cost More, Finish Later and Run Slower

The High Speed Two (HS2) railway line will cost up to £102.7 billion, could be up to 13 years late and trains will be slower, according to a new report by the National Audit Office (NAO).

The NAO says and HS2 Ltd “are making progress” in their second reset, but even excluding inflation, costs have doubled since the last reset in 2020.

Cost More

The Department for Transport (DfT) now expects HS2 will cost between £87.7 billion and £102.7 billion. This is around double the 2020 cost estimate for the Euston-Birmingham route. The costs have increased because of scope change, underestimation, and inefficient delivery, the NAO says.

Despite the cost increases, DfT assessed that completing HS2 is less costly than cancelling it.

Finish Later

HS2’s completion will also be heavily delayed. Train services between Old Oak Common and Birmingham are expected to start operating between May 2036 and October 2039, and from Euston to the north of Birmingham (to join the West Coast Main Line) between May 2040 and December 2043. This means that DfT now expects to open the full railway between around 3 and 13 years later than it expected in 2020.

Euston’s HS2 Extension

So far, £3.8 billion has been spent on works at Euston with another £4.1 billion of public funding anticipated, based on early station designs and to complete the tunnelling into Euston from Old Oak Common. Total costs will be higher, once the private finance the government intends to use to deliver the station is confirmed and included.

Stations Too Small

The HS2 programme was initially intended to have a route going further north than Birmingham, known as Phase 2, but this was cancelled in 2023. Without Phase 2, HS2 trains will run on the existing railway north of Birmingham. However, the existing stations are too small for the planned length of trains (two 200-metre units).

Running shorter single 200-metre unit trains would mean they have less seating capacity than the current trains using the West Coast Main Line. A decision on how to solve this is expected by 2028.

Run Slower

The speed of HS2 trains is being reduced to try to save money. By cutting the speed from 360 km/hr to 320 km/hr (around 200 mph, similar to high-speed European trains), DfT estimates this will reduce the delivery delays due to not having to test the railway to the higher speed, and will save between £1 billion and £2.5 billion. However, longer train journey times will cause a longer-term loss in benefits of £1.3 billion, which could negate the savings in reducing the speeds.

Failed Negotiations

HS2 Ltd tried to make other savings by renegotiating supply chain contracts in spring 2024, but “was not in a strong position to negotiate”, the NAO report states, adding “HS2 Ltd’s approach to transferring risk to the supply chain was not seen as attractive by contractors.”

Now, after writing off £500 million of historical costs, HS2 Ltd is focusing on an approach that better incentivises cost-effectiveness. It is also renegotiating contracts for the Old Oak Common and Curzon Street stations, where costs have more than doubled.

Restore Confidence

Sir Geoffrey Clifton-Brown, Chair of the Committee of Public Accounts, said: “Today’s report confirms that HS2 will arrive years later, cost vastly more – up to £102.7 billion – and deliver less than originally planned.

“While governance is improving and HS2’s designation as a mega-project has introduced more streamlined decision-making, more work is needed to complete the reset and restore confidence.

“The government must prove it has finally gripped this programme and begin to rebuild public trust in a project whose reputation has been severely damaged by a litany of failures, so that it can start delivering long-promised benefits.”

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