Delaying HS2 Euston could waste more billions, watchdog warns

Delays in linking up HS2 and Euston could end up wasting taxpayers’ money, with a platform design already ballooning billions of pounds over budget, Britain’s spending watchdog has warned.

The Government has sought to arrest spiralling costs by delaying various parts of the beleaguered high-speed route including, most recently, the construction of the Birmingham to Crewe leg, which will be pushed back by two years.

Ministers hope this pause will allow for the initial services between Old Oak Common in west London's suburbs and Birmingham Curzon Street to be prioritised.

The changes will mean HS2 services do not stop at Euston in central London for years to come, with passengers expected to instead travel for half an hour on the Elizabeth Line.

Now the National Audit Office (NAO) has warned that, while the postponement may put the Euston work on a “more stable footing”, 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”.

More than £2 billion over budget

It said the latest estimate by HS2 Ltd set the cost for the 10-year platform design at Euston at £4.8 billion, more than £2 billion over budget.

The NAO said: “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.”

The NAO said that it has not yet been shown that “the conditions are in place to secure value for money”.

The report found that by the end of December 2022, HS2 Ltd had spent more than £2 billion on the HS2 Euston station and its approaches, covering design, land and preparation works.

Gareth Davies, head of the NAO said: “Government is once again having to revise plans for Euston HS2.

“Clearly, the 2020 reset of the station design has not succeeded.

“DfT and HS2 Ltd have not been able to develop an affordable scope that is integrated with other activity at Euston, despite their focus on costs and governance since 2020.

“Recent high inflation has added to the challenge.

“The March 2023 announcement by the Transport Secretary pausing new construction work should now give DfT and HS2 Ltd the necessary time to put the HS2 Euston project on a more realistic and stable footing.

“However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially a more expensive project overall, and that will need to be managed closely,” he added.

Labour's Dame Meg Hillier, chairwoman of the Public Accounts Committee, said: “Attempts to reset the HS2 Euston Station have failed.

‘Delays will disrupt businesses’

“It is still unaffordable and no further forward than it was three years ago.”

She said that the report shows “that the redesigned station would have cost nearly double what was budgeted”.

Ms Hillier continued: “The delays to fix this will be felt not only by the taxpayer, but will continue to disrupt people and businesses around Euston.

“The DfT and HS2 Ltd have wasted enough time and money.

“They must get Euston right next time or risk squandering what benefits remain.”

A DfT spokesman said: “We remain committed to delivering HS2 from Euston to Manchester in a way that delivers the best value for money to the taxpayer.

“That’s why we recently announced we will re-phase the Euston section of the project to manage inflationary pressures and work on an affordable design for the station.

“We will carefully consider the recommendations set out by the National Audit Office and will formally respond in due course.”