The National Audit Office has warned that the cost of the ‘reset’ of the remaining section of HS2 will be about £153 million. Transport secretary Heidi Alexander announced last month that the line between London and Birmingham will now cost up to £107 billion, after chief executive Mark Wild had devised a new and detailed plan to complete the project.

The cost of HS2 has increased significantly since 2020. The latest figure of £102.7 billion is about double the 2020 cost estimate for Phase One between London and Birmingham.

In its latest report on the high speed scheme, the NAO said: ‘The driving causes behind the majority of these cost increases are scope change, inefficient delivery and an underestimation of the time needed to complete delivery. Further work is needed to refine the May estimate, and HS2 is working towards a more certain and fully assured baseline estimate by spring 2027. Despite the cost increases, DfT assessed that completing the programme would represent value for money compared with cancelling the programme.’

It added that the DfT and HS2 Ltd were aiming to complete the reset by spring 2027, but said: ‘It is crucial that they get it right this time following past failures.

‘They should ensure that they do not proceed with putting the plans into action until they are confident everything is in place to deliver against them.’

It said the DfT and HS2 Ltd should review in the autumn how ‘realistic’ the new timetable was and revise it if necessary.

A further uncertainty is the continuation of HS2 from Old Oak Common to Euston, and £3.8 billion has been spent on works at Euston so far, with another £4.1 billion of public funding likely to be needed. The NAO expects that total costs will be higher, once the private finance the government intends to use to build the station is confirmed and included.

NAO head Gareth Davies said: ‘These previous issues highlight the importance of DfT and HS2 Ltd getting it right this time to ensure the future success of the programme. Establishing a fully robust estimate of cost and schedule, completing commercial negotiations and getting the right capabilities in place is necessary before they can complete the reset.’

The DfT commented: ‘Following years of mismanagement, this government has taken decisive action to reset HS2 and ensure the safe delivery of the line between Birmingham and London at the lowest reasonable cost.’

The completion of the line between Euston and north of Birmingham is not expected until 2040-43, although services between Old Oak Common in west London and Birmingham Curzon Street are expected to start in 2036-39.

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