Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Department and HS2 Ltd are working to agree cost estimation methodology with Treasury.
Conclusion
Both the Department and HS2 Ltd told us that they were working together to reach an agreed methodology including drawing on third–party technical advice on cost estimation and, to ensure that the underpinning assumptions of future estimates are agreed, establishing an oversight group with HM Treasury representation.18 The Department expressed confidence that there would be agreement on the methodology in the coming two to three months.19
Government Response Summary
The government agrees with the recommendation, outlining steps to finalise and implement an agreed cost estimating methodology with HS2 Ltd, including a comprehensive review and collaboration with NISTA and HM Treasury, by Spring 2026.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee's recommendation. Target implementation date: Spring 2026 2.2 The Secretary of State has commissioned the CEO of HS2 Ltd to undertake a comprehensive review of the programme, including HS2's current cost position and the capability and culture of HS2 Ltd, and to make recommendations to inform the programme reset. 2.3 The department and HS2 Ltd have agreed the areas of cost estimation that need to be addressed to enable a robust and reliable life-cycle cost of HS2 to be set, these include, reset of project schedule and duration, consolidation of costs incurred, scope delivered, quantities remaining and an evaluation of supply chain productivity. 2.4 The department is working closely with HS2 Ltd, accompanied by NISTA and HM Treasury advice, to finalise the cost estimating methodology over the summer and to fully implement it as part of the reset of the programme in 2026. 2.5 Once this process is complete, the department will provide a further update to inform the Committee at the earliest opportunity providing additional further details on the agreed approach to cost estimation methodology.