The failure of the High Speed 2 (HS2) programme, one of our most important public sector projects, is now a reputational risk to the UK.
The Public Accounts Committee (PAC) has published its report updating its long-running scrutiny of the project, following the cancellation of HS2’s Northern leg.
The report urges the Government to lay out to the public, in responses to the PAC expected before summer this year, what value taxpayers can now expect from their huge investment in the project.
Image: Jo Fichtner – HS2 Ltd-tunnel boring machine
Thirteen years since HS2 was given the go-ahead by Government, it is not known what it will cost, what the final scope will be, when it will be completed, and what benefits it will deliver. The PAC’s inquiry was told by the Department for Transport (DfT) and HS2 Ltd., who share responsibility for HS2’s repeated failures, that the programme would now undergo a “fundamental reset”, following a similar reset less than five years ago. The PAC is seeking details from Government of how oversight of the programme will be improved.
However, the report finds that neither DfT nor HS2 Ltd currently have the skills or capabilities to make a success of the programme. The report notes past findings of gaps at the DfT in key areas such as risk management and assurance, project management and project controls. The PAC is not convinced that DfT has sufficiently considered how it can bring fresh thinking to its own leadership of HS2, or whether it has the right skills and capabilities in place to lead the programme effectively and credibly.
The PAC’s inquiry found that very little progress has been made on addressing the needs of those affected by the purchase of land and property as part of the programme. People who previously owned property that is no longer needed, who may welcome the opportunity to buy it back, have been waiting for years, and are still waiting, for answers. The report calls for people’s cases to be addressed sympathetically and rapidly, particularly where this was someone’s home.
The report also specifically picks out Euston Station, and HS2’s ‘bat tunnel’, as elements of concern. It finds that the c.£100m cost of the 1km bat tunnel, which did not strike the right balance between protecting wildlife and the burden on the taxpayer, more than doubled the cost of that section of railway alone. On Euston, the Government’s plans currently rest on the c.£6bn cost being significantly underpinned by the private sector. There is no clear plan for this, and the Committee is sceptical the private sector will come forward to the level required. In the meantime, local businesses, residents and passengers will continue to face significant disruption at Euston for many years to come.
The Government and HS2 Ltd’s inability to agree with each other on how much the programme will cost starkly illustrates their failure to work together effectively. Total programme costs could approach £80bn, and the PAC is pessimistic as to whether significant cost savings can be delivered in construction on the project. The PAC’s warnings that HS2 Ltd. needed to carefully manage its contracts in this area went unheeded. Given a lack of apparent incentives for contractors to deliver significant savings, HS2 Ltd. must now lay out what steps it will take if it cannot renegotiate better terms.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: “Our Committee has not made recommendations in our report on delivering better outcomes for HS2’s future passengers. We are long past that point. It is time to deal with HS2 as what it is – a cautionary tale that should be studied by future Governments in how not to run a major project. We are sceptical of Government’s ability to successfully deliver even a curtailed scheme, one which we already know will on its face bring very poor value for money. The question has instead become: what possible benefit can the Government now salvage for the taxpayer, from a mess that presents real risks to the UK’s overall reputation?
“This Committee has scrutinised HS2 since its inception. Our report lays out a catalogue of warnings proceeding from that scrutiny which, if heeded, may have brought about a different outcome. Both DfT and HS2 Ltd. must now begin the hard work of making this project the best possible version of itself in the circumstances, while swiftly addressing the needs of those impacted by decisions made under this scheme who are still waiting for answers. The Government must now look to future, and deliver on its responsibilities to Parliament and the wider public - through the lens of its accountability to the PAC.
“It is ultimately the Department of Transport that has failed to manage this enormous project and manage HS2 properly. This is likely to have wasted billions of pounds of taxpayers money in delays and overspends. The department as well as resetting the project must now reset itself to manage this project to a workable conclusion in line with the eventually agreed budget and timescale. To do this they will need to employ people with the correct range of skill sets to critically supervise and oversee this huge project. This is the only way to salvage its severely tarnished reputation. We expect to see a real improvement when we next examine this matter.”
