Recommendations & Conclusions
23 items
4
Recommendation
10th Report - HS2: Update following the…
Deferred
HS2 Ltd’s efforts to reduce the environmental impact of HS2 are not delivering value for money, with the c.£100 million cost of a protective ‘bat tunnel’ more than doubling the cost of that section of railway alone. The Committee does not consider that the right balance has been struck between …
Government response. The government agrees to provide a final response by early 2026, after proposed Planning and Infrastructure Bill measures are finalised, regarding how the Nature Restoration Fund would have impacted the bat tunnel case study. They are already working with DEFRA …
HM Treasury
12
Conclusion
10th Report - HS2: Update following the…
Deferred
Prior to the October 2023 announcement, HS2 Ltd estimated that the total costs of Phase 1 would be £49 billion to £57 billion. The Department’s estimate was lower, at £45 billion to £54 billion but still above the funding envelope of £44.6 billion set in 2019. These estimates were all …
Government response. The government agrees with the 'recommendation' and commits to finalizing a cost estimating methodology over the summer, with full implementation as part of the programme reset in 2026, following a comprehensive review by the HS2 Ltd CEO.
HM Treasury
13
Conclusion
10th Report - HS2: Update following the…
Deferred
We expressed to the Department how unsatisfactory we found it that the cost estimates for completing the programme are still in 2019 prices. The Department agreed, telling us that it expects that any funding agreed at the spending review will be in current prices. It also explained that this will …
Government response. The government agrees with the 'recommendation' and has commissioned a comprehensive review of the programme and its cost position, aiming to inform a programme reset in 2026. They are finalizing a cost estimating methodology, with full implementation planned as part …
HM Treasury
14
Conclusion
10th Report - HS2: Update following the…
Deferred
The Department confirmed that as well as agreeing a revised cost for the programme with HS2 Ltd, there will also be challenge from HM Treasury before a revised budget for the programme can be set. It told us that HM Treasury is already closely engaged and an important step in …
Government response. The government agrees with the 'recommendation' and is commissioning a comprehensive review of the programme, including its cost position, to inform a reset in 2026. They are finalizing a cost estimating methodology with HM Treasury advice over the summer, to …
HM Treasury
15
Conclusion
10th Report - HS2: Update following the…
Deferred
The Department emphasised the need for a long–term spending profile for the completion of HS2, acknowledging to us that agreeing annual budget settlements was really poor for long–term infrastructure delivery.26 20 C&AG’s Report, para 4.6 and 4.7; Department for Transport, HS2 6 monthly report to Parliament: October 2020, 13 October …
Government response. The government agrees with the 'recommendation' and has commissioned a comprehensive review of the programme and its cost position, aiming to inform a programme reset in 2026. They are finalizing a cost estimating methodology, with full implementation planned as part …
HM Treasury
16
Conclusion
10th Report - HS2: Update following the…
Deferred
In July 2017, HS2 Ltd let contracts with four joint venture companies for the main civil construction work on Phase 1. However, in 2020, once the cost of building the railway became clearer, it revised the terms of the contracts in an attempt to ensure an affordable programme at that …
Government response. The government "disagrees with the committee's recommendation" but "agrees with the substance," stating that contract renegotiations are ongoing and subsumed into a wider program reset, and further updates will be provided later.
HM Treasury
17
Recommendation
10th Report - HS2: Update following the…
Deferred
However, the previous Public Accounts Committee was clear on the risk of these changes and that HS2 Ltd needed to closely manage these contracts. In its May 2020 report it warned that: “Now that it is bearing more of the risk of cost increases, HS2 Ltd also needs to ensure …
Government response. The government states it disagrees with the recommendation but agrees with its substance, needing more time for an update as commercial renegotiations are subsumed into a complete programme reset by the HS2 Ltd CEO. HS2 Ltd will apply robust contract …
HM Treasury
18
Conclusion
10th Report - HS2: Update following the…
Deferred
HS2 Ltd acknowledged that it has not managed these contract risks in an optimal or coherent way.30 In September 2023, HS2 Ltd estimated that the forecast cost of main civil construction work alone had increased by £6 billion (2019 prices) since 2020.31 27 Q 35; Department for Transport, HS2 6-monthly …
Government response. The government disagrees with the committee's observation but agrees with its substance, explaining that HS2 Ltd is undergoing a complete programme reset, including commercial renegotiations, and will provide further updates as the commercially sensitive work concludes.
HM Treasury
19
Conclusion
10th Report - HS2: Update following the…
Deferred
HS2 Ltd told us that it is now seeking to renegotiate these contracts.32 It considers that the current contracts are unproductive and that reset provides the opportunity for a fair allocation of risk and an opportunity to find different ways of commercially incentivising the outcomes that it wants, rather than …
Government response. The government states it disagrees with the recommendation but agrees with its substance, needing more time for an update. Commercial renegotiations are ongoing and subsumed into a complete programme reset by HS2 Ltd's new CEO, with robust contract management applied …
HM Treasury
20
Conclusion
10th Report - HS2: Update following the…
Deferred
We challenged HS2 Ltd on the feasibility of renegotiating existing contacts to deliver significant cost savings given the lack of incentives for the contractors to change terms. It told us that all major contractors have expressed willingness to discuss and work through a renegotiation as there was recognition from the …
Government response. The government "disagrees with the committee's recommendation" but "agrees with the substance," explaining that contract renegotiations are ongoing and highly commercially sensitive, forming part of a wider programme reset, with further updates promised in future six-monthly reports.
HM Treasury
21
Conclusion
10th Report - HS2: Update following the…
Deferred
We expressed our concern to HS2 Ltd for the potential for the large main contractors to pass any financial consequences of contract renegotiations down the supply chain to the small and medium–sized enterprises, of which HS2 Ltd told us there were around 2,400, who may find it more difficult to …
Government response. The government states it disagrees with the recommendation but agrees with its substance, deferring a full update until ongoing commercial renegotiations, which are subsumed into a broader programme reset, are complete. HS2 Ltd will apply robust contract management in the …
HM Treasury
22
Recommendation
10th Report - HS2: Update following the…
Deferred
We challenged the Department on the balance in legislation that needs to be taken between meeting environmental obligations and costs, raising the example of the £100 million cost of a protective ‘bat tunnel’.36 In order to mitigate HS2’s impact on nearby bat habitats, the Sheephouse Wood Bat Protection Structure is …
Government response. The government agrees with the recommendation and intends to provide a preliminary response by Summer 2025. A final response is deferred until early 2026, pending the finalisation and Royal Assent of proposed measures in the Planning and Infrastructure Bill.
HM Treasury
23
Conclusion
10th Report - HS2: Update following the…
Deferred
HS2 Ltd confirmed that it was its decision to build the structure and not one required by Natural England. However, the Department and HS2 Ltd told us that, despite its cost, that they had concluded the ‘tunnel’ structure was the most efficient and appropriate way to protect the bats out …
Government response. The government agrees with the observation but defers a final response until early 2026, pending the finalisation and understanding of measures in the Planning and Infrastructure Bill, while committing to a preliminary response by July 2025.
HM Treasury
24
Conclusion
10th Report - HS2: Update following the…
Deferred
The Department strongly agreed, however, about how the balance between compliance and cost should be considered when delivering national infrastructure in the future.41 HS2 Ltd also recognised that it was a complex issue and a sensitive area, telling us that the structure needed local planning permission from Buckinghamshire Council which …
Government response. The government agrees but will provide a preliminary response by July 2025, with a final response by early 2026, as the full assessment depends on proposed measures in the Planning and Infrastructure Bill which are not yet finalized or received …
HM Treasury
25
Conclusion
10th Report - HS2: Update following the…
Deferred
In follow–up evidence, the Department confirmed that the total cost of building the structure will be £95 million (in 2019 prices). The Department also reported that the cost of building that section of the railway, irrespective of any mitigation works, would have been £73 million, meaning that the bat structure …
Government response. The government agrees with the committee's observation and commits to a preliminary response by July 2025, with a final response by early 2026 after proposed measures in the Planning and Infrastructure Bill are finalised and Royal Assent received.
HM Treasury
26
Conclusion
10th Report - HS2: Update following the…
Deferred
HS2 Ltd does not monitor how much in total it spends on environmental mitigation. For example, we asked HS2 Ltd how much it was spending on wildlife migration schemes such as for the great crested newt at Halse Copse. In its follow–up letter, HS2 Ltd told us that it was …
Government response. The government agrees with the conclusion but defers a final response until early 2026, pending the finalisation and Royal Assent of the Planning and Infrastructure Bill and a full understanding of its measures, which would inform a re-assessment of this …
HM Treasury
27
Conclusion
10th Report - HS2: Update following the…
Deferred
In January 2025, the government announced that it will look to change how infrastructure projects meet their environmental obligations as part of its forthcoming Planning and Infrastructure Bill. It set out that this would include a Nature Restoration Fund which will pool contributions from developers to fund larger strategic interventions …
Government response. The government agrees with the conclusion but defers a final response until early 2026, pending the finalisation and Royal Assent of the Planning and Infrastructure Bill and a full understanding of its proposed measures.
HM Treasury
33
Conclusion
10th Report - HS2: Update following the…
Deferred
We challenged the Department over the necessity and added risk of establishing an additional delivery body to oversee the works at Euston and its surroundings. The Department recognised that setting up new organisations is far more complex and difficult than is often thought, and that its experience with HS2 Ltd …
Government response. The government agrees with the committee's recommendation and commits to providing an update on progress at Euston in its next six-monthly report to Parliament, expected in Summer 2025.
HM Treasury
40
Conclusion
10th Report - HS2: Update following the…
Deferred
However, the Department told us that overall decisions need to be made on future rail investment first. It explained that the government’s long– term strategy being developed for strategic rail investment, including on improvements to rail connectivity in the north of England, may affect what land is bought or sold …
Government response. The government agrees with the conclusion, stating that preparatory work for a Phase 2 land disposal programme is underway, and it will include its approach to addressing future West Coast Main Line capacity and northern rail connectivity in a future …
HM Treasury
43
Conclusion
10th Report - HS2: Update following the…
Deferred
The HS2 programme was originally intended to improve capacity on the West Coast Main Line. However, with the cancellation of Phase 2, the revised programme will only address capacity between London and Birmingham. The Department is exploring options to run longer HS2 trains north of Birmingham, but this would require …
Government response. The government agrees with the 'recommendation'. While preparatory work on a Phase 2 land disposal programme is underway, they will include their approach to addressing future West Coast Main Line capacity issues and northern rail connectivity in a future six-monthly …
HM Treasury
44
Conclusion
10th Report - HS2: Update following the…
Deferred
The Department acknowledged the capacity challenge on the West Coast Main Line as a consequence of not building Phase 2, estimating that it will reach capacity by the late 2030s. These capacity concerns were also raised with us in evidence from Manchester City Council, Transport for Greater Manchester and the …
Government response. The government agrees with the conclusion, stating it will include its approach to addressing future West Coast Main Line capacity issues and northern rail connectivity in a future six-monthly report, following the outcome of the spending review.
HM Treasury
47
Recommendation
10th Report - HS2: Update following the…
Deferred
However, the Committee has needed to recommend repeatedly that the Department and HS2 Ltd improve the degree they reflect on past or current experiences and implement any lessons. In 2020, the previous Committee made clear its dissatisfaction: 80 “Given the repeated emergence of issues across the Department’s major programmes, we …
Government response. The government commits to learning lessons and has identified key lessons, aiming to implement them during the HS2 programme reset. It will write to the Committee outlining key areas of lessons and provide further updates in the next Parliamentary report …
HM Treasury
48
Recommendation
10th Report - HS2: Update following the…
Deferred
The previous Public Accounts Committee also concluded in its 2023 report on HS2 Euston that it was another example of the Department making the same mistakes and failing to learn lessons from its management of other major rail programmes, highlighting the need for more work on cost estimation, the treatment …
Government response. The government commits to learning lessons and has identified key lessons, aiming to implement them during the HS2 programme reset. It will write to the Committee outlining key areas of lessons and provide further updates in the next Parliamentary report …
HM Treasury