Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Ensure realistic and affordable Euston station budget and design before restarting construction.
Conclusion
The £2.6 billion budget set in 2020 proved to be completely unrealistic for what the Department wanted to deliver. In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd set a £2.6 billion budget for Euston. This budget was below HS2 Ltd’s early estimated cost for the station of £3 billion. Later, more detailed estimates showed that the costs were likely to be significantly higher, with the 11-platform design forecast to cost £4.4 billion in June 2020 and the revised 10-platform design £4.8 billion in March 2023. This is despite work by HS2 Ltd between 2020 and 2022 to identify ways to reduce the expected costs. HS2 Ltd tells us that it set the budget in 2020 on the expectation it would be revised given the uncertainty around the station design and its provisional estimate. The Department also acknowledges that its challenge of costs at the time was focused on the overall Phase One budget rather than individual elements, such as Euston. The NAO reports that additional spending of £548 million has taken place up to the end of December 2022 (in cash terms) of which £106 million was nugatory spend due to the decision to alter the design from 11 platforms to 10. Recommendation 2: The Department needs to be much clearer to Parliament and the public that the revised budget it sets is realistic and the station design it approves is affordable and deliverable with timescales for construction before it restarts construction work at Euston.
Government Response Summary
The government agreed, stating the Euston Reset Programme will establish a realistic budget range, assess the updated station design for affordability, and provide a new delivery-into-service date before restarting construction work.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. station design is affordable and provides value for money to the taxpayer and that the programme is set up appropriately for HS2 Ltd to manage cost risk. The Euston Reset Programme will include the setting of a realistic budget range and assessment of maturity for the updated station design that is adopted and a new delivery-into-service date will be provided in due course. billion budget, which was aligned with the range against which it had incentivised Mace Dragados to deliver the single-stage design, which was £2.6-£3.6 billion. Information regarding the significant additional pressure from the £4.8 billion revised estimate only became available in January 2023. In advance of the subsequent Parliamentary Report, which was published in June 2023, the department disclosed this transparently to Parliament through the National Audit Office. 5.3 The department is committed to upholding transparency in the HS2 programme.