Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
HS2 Euston's actual cost estimate of £4.8 billion greatly exceeded previously reported figures.
Recommendation
However, HS2 Ltd’s latest cost estimate of £4.8 billion is significantly higher than previously reported, at £2.2 billion over the budget.49 The Department told us that it did not know of the £4.8 billion estimate until HS2 Ltd reported it to them during February and March 2023.50 Prior to that, the Department noted that HS2 Ltd had been reporting a cost estimate of £3.3 billion, within a range of £2.6 billion to £3.6 billion.51 It acknowledged that this cost pressure was ‘slightly greater’ than the £0.4 billion being reported to Parliament but that those figures had not been validated while work was still underway.52 As a result, the Department told us that it reported what was known and validated which, until February 2023, was a cost pressure of £400 million.53 HS2 Ltd acknowledged that the £2.6 billion budget was seen as a stretch target, and that it had been working towards trying to get back to its previous estimate of £3.3 billion.54
Government Response Summary
The government agrees, noting it transparently disclosed the significant £4.8 billion revised cost estimate to Parliament via the National Audit Office when it became available, and reaffirms its commitment to upholding transparency in the HS2 programme.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 5.2 The HS2 Parliamentary report published in October 2022 set out HS2 Ltd.’s assessment of a £0.4 billion pressure for Euston station above its £2.6 billion budget, which was aligned with the range against which it had incentivised Mace Dragados to deliver the single-stage design, which was £2.6-£3.6 billion. Information regarding the significant additional pressure from the £4.8 billion revised estimate only became available in January 2023. In advance of the subsequent Parliamentary Report, which was published in June 2023, the department disclosed this transparently to Parliament through the National Audit Office. 5.3 The department is committed to upholding transparency in the HS2 programme.