Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Deferred
Department manages HS2 via annual funding despite need for long-term profile.
Conclusion
The Department emphasised the need for a long–term spending profile for the completion of HS2, acknowledging to us that agreeing annual budget settlements was really poor for long–term infrastructure delivery.26 20 C&AG’s Report, para 4.6 and 4.7; Department for Transport, HS2 6 monthly report to Parliament: October 2020, 13 October 2020 21 Q 7; Department for Transport, HS2 6-monthly report to Parliament: December 2024, 17 December 2024 22 Qq 23–25 23 Transport Committee, Oral evidence: HS2: progress update, HC 85, Q 408 24 Department for Transport, HS2 6-monthly report to Parliament: December 2024, 17 December 2024 25 Qq 14, 19 26 Q 21 13 However, ahead of the programme’s reset and spending review and the longer–term certainty they should provide, the Department reported that it is having to manage HS2 Ltd’s delivery through annual funding and delivery targets for this year and the next. HS2 Ltd told us that it recognised this as a necessary short–term intervention.27 Renegotiating contracts
Government Response Summary
The government agrees with the 'recommendation' and has commissioned a comprehensive review of the programme and its cost position, aiming to inform a programme reset in 2026. They are finalizing a cost estimating methodology, with full implementation planned as part of this 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.