Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Deferred
Initial HS2 Euston station budget was a 'stretch target' and significantly underestimated costs
Conclusion
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
Government Response Summary
The government agrees with the observation and has launched the Euston Reset Programme, aiming to ensure an affordable HS2 station design and establish a realistic budget range and new delivery date in due course, with a target implementation date of Summer 2025.
Government Response
Deferred
HM Government
Deferred
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 2.2 The objective of the Euston Reset Programme is to ensure that the scope of the HS2 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.