Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Rejected
HS2 Ltd actively managing contract pauses but not receiving formal claims from contractors.
Conclusion
We asked HS2 Ltd whether it was receiving notifications from contractors of their intentions to make contractual claims due to the pause. HS2 Ltd told us that this was not the case and that it is in discussion with contractors about how it can slow down or defer works, and agree the mechanism by which it will resurrect the work when the funding becomes available to do so.33 HS2 Ltd also told us that the funding settlement it has agreed with the Department for the next two years includes its estimate of the sum needed to wind up the contracts affected by the pause.34
Government Response Summary
The government disagrees with the implied recommendation, stating that despite considering the costs of pausing, it was not affordable to continue due to budget pressures. It is working with HS2 Ltd to manage pause costs and will provide the Committee with details of spend and contractual obligations later.
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.