Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Rejected
Impact of HS2 Euston construction pause on the supply chain remains undetermined
Recommendation
We asked the Department if Ministers had looked at the impact on businesses when they made the decision to pause construction. The Department told us that the decisions Ministers were trying to make were about trying to protect the supply chain as far as they could and that this was an important part of the advice that was being given to Ministers as they considered options.30 HS2 Ltd told us that it had been working with the Department to develop various funding scenarios and best options for the HS2 programme since November last year but, with the decisions now made, it needs to determine the full extent of the impact of the pause on the contractors and subcontractors working at the Euston site.31 It intends to work with its existing suppliers to redeploy as many resources as it can to other parts of the HS2 programme but it was unable to confirm what proportion of the supply chain that would cover.32
Government Response Summary
The government rejects the implicit recommendation, stating it considered costs but paused construction due to affordability pressures. It commits to providing the Committee with spend-to-date, contractual settlement costs, and supply chain re-employment details after the Euston Reset Programme.
Government Response
Rejected
HM Government
Rejected
3.1 The government disagrees with the Committee’s recommendation. 3.2 The department did consider the projected costs of pausing the work but was not in a position to continue even had it wished to give the scale of the affordability pressure. It is working with HS2 Ltd to ensure that the costs of the pause are being managed effectively. HS2 Ltd is demobilising construction activities at Euston in a controlled manner. It is noted that, whilst most work on the station site has stopped, some activities are continuing to complete certain ‘no regrets’ assets that were underway, such as the construction of the replacement London Underground traction substation. 3.3 The department will write to the Committee to set out the spend to date on the HS2 station (including spend on adjusting Network Rail infrastructure to enable construction of the HS2 station) once this information is available from HS2 Ltd and its suppliers, along with details of the costs of settling contractual obligations and the extent to which the supply chain has been re-employed elsewhere on the HS2 project. Details of further spend to complete the station, including further design work, will necessarily follow after completion of the Euston Reset Programme when the design of the station to be implemented has been confirmed.