Government announces HS2 construction delay to cut costs
The Government has announced that construction of part of HS2 will be delayed by two years to save money.
Construction of HS2 between Birmingham and Crewe will be delayed by two years, Transport Secretary Mark Harper said on Thursday.
Mr Harper said: “We have seen significant inflationary pressure and increased project costs, and so we will rephrase construction by two years, with an aim to deliver high-speed services to Crewe and the North West as soon as possible after accounting for the delay in construction. “
He also announced setbacks to key road projects as he blamed the pressures of soaring inflation and increasing costs.
HS2 has been dogged by criticism over its finances.
A budget of £55.7 billion for the whole of the project was set in 2015.
But the target cost excluding the eastern leg of Phase 2b from the West Midlands to the East Midlands has ballooned to between £53 billion and £71 billion.
Rail minister Huw Merriman told the Commons last week that the Government is "absolutely committed" to delivering HS2 but "cost pressures" must be examined.
Responding earlier to reports that the project would be delayed, Prime Minister Rishi Sunak's official spokesman said: "You will know there's work already under way on HS2.
"Equally the rail minister has been clear we're continuing to look at any cost pressures and ensure the project delivers value for money for taxpayers."
HS2 Ltd chief executive Mark Thurston recently said the project has suffered a "significant" impact from inflation adding to the cost of building materials, labour, fuel and energy.
"We're looking at the timing of the project, the phasing of the project, we're looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation," he told the BBC.
Conservative MP Simon Clarke, former chief secretary to the Treasury, described delaying the project as a "sensible decision".
He said: "Having observed HS2's progress as chief secretary, I have serious doubts as to value for money and cost control."
Michael Fabricant, also a Tory MP, said he will ask the Government whether the delay "marks the end of HS2 north of Birmingham" and if the "damage" done in southern Staffordshire - including to his Lichfield constituency - will be repaired.
He added: "Simply saying the project is delayed is not good enough.
"This project with the backing of Labour and the Lib Dems should never have gone ahead in the first place.
"Covid has encouraged remote working and even now regular rail commutes are down by 40% on pre-Covid levels.
"The Government are well aware this makes the business case for HS2 even less convincing than it was in the first place."
But the leader of Birmingham City Council, Ian Ward, said the decision to delay part of the route represents "another betrayal of the Midlands and the North, making a mockery of the Government's empty promises to level up the UK economy".
The Labour councillor said in a video message posted on Twitter: "HS2 has the potential to deliver economic growth across the country, but it is being undermined by the Government at every turn.
"We will only truly see the full benefits of HS2 when Birmingham and the Midlands are at the very heart of a national network.
"So another delay represents a massive blow to this once-in-a-generation opportunity to re-balance the UK economy."
Andy Bagnall, chief executive for rail industry lobby group Rail Partners, said: "While inflationary pressures make infrastructure projects more challenging, it is critical for Britain's economy and meeting net zero targets that large sections of HS2 are not delayed, which will ultimately increase the overall cost.
"We must address industry financial challenges across infrastructure and operations head on - not focusing solely on cost reduction, but also on driving revenues to close the financial gap and reduce the railway's reliance on taxpayer funding."
In October last year, the Transport Secretary said the forecast for when HS2's phases would be complete remained within planned ranges.
That involved Phase One - connecting London with Birmingham - opening between 2029 and 2033.
Services will initially start and end at Old Oak Common, west London, due to delays at Euston.
Mr Harper said then Phase 2a - extending the line from Birmingham to Crewe - was "on track" to be completed between 2030 and 2034.
The date range for the western leg of Phase 2b - connecting Crewe with Manchester - remained between 2035 and 2041, the Cabinet minister added.
No timetable has been set for when the eastern leg of that phase will open as it is at the early stage of development.
A planned extension to Leeds was shelved in November 2021.