Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Deferred
HM Treasury to challenge HS2 revised costs before final programme budget agreement.
Conclusion
The Department confirmed that as well as agreeing a revised cost for the programme with HS2 Ltd, there will also be challenge from HM Treasury before a revised budget for the programme can be set. It told us that HM Treasury is already closely engaged and an important step in determining the eventual cost of the programme will be the upcoming spending review. As part of that, the Department will need to agree with the Treasury what the funding profile for the programme will be for the remainder of this Parliament.25
Government Response Summary
The government agrees with the 'recommendation' and is commissioning a comprehensive review of the programme, including its cost position, to inform a reset in 2026. They are finalizing a cost estimating methodology with HM Treasury advice over the summer, to be fully implemented as part of the programme reset.
Government Response
Deferred
HM Government
Deferred
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.