Recommendation 3

The Department does not yet know the costs and impacts of pausing construction. Neither the Department nor HS2 Ltd know the likely costs of pausing construction work for the next two years. They had been developing funding scenarios for the HS2 programme since the 2022 Autumn Statement but, with the decisions now made, HS2 Ltd still needs to work with its supply chain and with the local community to determine the full extent of costs and impacts. This would include making the site safe and potentially useable by local residents during the construction pause, 6 HS2 Euston and meeting contractual obligations. HS2 Ltd hopes to find an interim solution that is amenable to local residents and businesses, while it intends that much of the supply chain will be redeployed to other parts of the HS2 programme. However, we are not convinced that the impact on the supply chain, particularly on the smaller businesses, will be mostly mitigated by their employment elsewhere. Recommendation 3: We expect departments to have identified the costs associated with decisions on pausing projects so that Ministers can make fully informed decisions and so that departments can manage these costs effectively. • For Euston, the Department should produce an interim report in three months on how they and HS2 Ltd are managing the costs of the pause, exactly how much has already been spent including costs associated with Network Rail and how much more they expect to spend to complete the project. This should include the cost of settling contractual obligations. HS2 Ltd should also include in that update the proportion of the supply chain at Euston, in particular small and medium sized enterprises, that have been re-employed elsewhere on the HS2 programme. The Department should also report on how much of the design work for the revised projects had been done and how much remains to be completed.