Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Accepted
Department outlines new strategy to enhance HS2 Phase 1 cost control and governance.
Conclusion
In its October 2023 Command Paper on Network North and its new plans for completion of Phase 1, the Department stated that “We need to make changes quickly and decisively so the remainder of HS2 is delivered as cost effectively as possible. That means: a) Bearing down on the costs of Phase 1 and only delivering what is essential. b) Embedding a singular focus on cost control in HS2 Ltd and its supply chain and being prepared to take difficult decisions on contracts, scope and benefits to hold to budget. c) Reinforcing the leadership of HS2 Ltd, under Sir Jon Thompson, to change the culture on cost control with challenge from DfT, HMT and the IPA. d) Providing strengthened governance and control from the Government whilst this reset is developed and delivered, with increased oversight and reduced delegation.”31
Government Response Summary
The government agrees with the committee's observation by reiterating its commitments from the Network North command paper to bear down on costs, embed cost control, reinforce leadership in HS2 Ltd, and strengthen governance, while detailing steps like recruiting new Non-Executive Directors and a CEO.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring and autumn 2024 2.2 HS2 Ltd’s leadership and its collective capability are critical to the success of HS2. The department commenced a recruitment exercise to identify new Non-Executive Directors in January 2024. Additionally, HS2 Ltd commenced a recruitment exercise to identify a new Chief Executive Officer in February 2024 and is also recruiting to a number of senior executive roles. 2.3 As noted in the Network North command paper of 4 October 2023, HS2 Ltd and the department are committed to: • bearing down on the costs of Phase 1 and only delivering what is essential; • embedding a singular focus on cost control in HS2 Ltd and its supply chain and being prepared to take difficult decisions on contracts, scope and benefits to hold to budget; • reinforcing the leadership of HS2 Ltd, under Sir Jon Thompson, to change the culture on cost control with challenge from the department, HM Treasury and the Infrastructure and Projects Authority; and • providing strengthened governance and control from the government whilst this reset is developed and delivered, with increased oversight and reduced delegation. 2.4 A plan has been developed by the department, HM Treasury and HS2 Ltd to implement the above commitments. The department will provide an update in its forthcoming six-monthly reports to Parliament. 2.5 HS2 Ltd and the department are working together and with the principal suppliers to ensure focus on cost-effective delivery of the remainder of the civil works. The department will provide an update on that work in forthcoming reports to Parliament, subject to commercially sensitive details.