Recommendation 10

In our 2020 report we recommended that the Department publish regular reports on progress to Parliament, including a realistic appraisal of the programme’s likelihood of delivering to budget and schedule.18 HS2 Ltd and the Department reported £0.8 billion in cost pressures in their most recent update to Parliament in March 2021.19 We therefore asked what they were doing to finalise and manage cost pressures to ensure that the programme kept within its revised budgets. HS2 Ltd told us that these cost pressures were from three areas: Euston station; enabling works, including additional costs from the diversion of utilities; and, civil construction contractors. It told us it was looking for ways to mitigate and offset them. HS2 Ltd explained that it had an efficiencies programme and had found savings and opportunities totalling £200 million, mostly for civil construction such as bulk purchase of fencing and security.20 HS2 Ltd noted that it was rare that cost pressures were a surprise, as it identified and tracked potential cost risks early on, but that it was being vigilant about when contingency would be released to cover these cost pressures.21 We asked the Department and HS2 Ltd how much additional costs the programme had incurred as a result of the COVID-19 pandemic. HS2 Ltd explained that it would be difficult to “unstitch the true Covid-related costs” but that at the end of 2020 13 Letter from DfT to the Chair, 16 June 2021 14 Q 98. 15 Written statement to Parliament, HS2 6-monthly report to Parliament: March 2021, 23 March 2021 16 C&AG’s Report, High Speed 2: A progress update, Session 2019–20, HC 40, 24 January 2020, Figure 7; Committee of Public Accounts, High Speed 2: Spring 2020 update, Third Report of Session 2019–21, HC 84, 17 May 2020 17 Qq 1, 13, Letter from Mark Thurston to the Chair, 13 July 2021] 18 Committee of Public Accounts, High Speed 2: Spring 2020 update, Third Report of Session 2019–21, HC 84, 17 May 2020, conclusion 1 19 Qq 86–87; Written st