Recommendation 9

In April 2020, as part of the overall Phase One budget of £44.6 billion set by the Department, HS2 Ltd planned to design and build the HS2 Euston station for £2.6 billion. This budget was lower than its £3 billion assessment of what the station would actually cost to build.16 We asked HS2 Ltd why it accepted a budget for the station that was so much lower than its estimate of what it would actually cost. HS2 Ltd told us that its estimate was based on a very high-level concept design and that it agreed with the Department that it would have to come back and revisit the scope and costs at Euston. This was because there was lots of uncertainty around exactly what the station and all the surrounding area entailed.17 Given the complexity of the Euston project, we asked the Department about the extent to 9 C&AG’s Report, para 2.11 10 Q 1; C&AG’s Report, paras 10–11 11 Q 32 12 Q 7 13 Q 61 14 Q 47 15 Qq 22, 32, 60 16 C&AG’s Report, paras 2.2–2.3 17 Qq 26, 68 HS2 Euston 11 which they challenged the initial high-concept budget.18 The Department explained that its challenge of costs at the time was focused on the overall Phase One budget and that it had used independent advisers to challenge the reasonableness of individual elements. The advisors had not endorsed Euston station as a fully funded design and concluded that its budget was ‘a stretch target’.19