Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
HS2 Ltd faces estimated sub-£10 million legal exposure from cancelled Phase 2 contracts.
Conclusion
We also asked whether any contracts would need to be cancelled in respect of Phase 2 and payments made to companies as a result. HS2 Ltd told us that for Phases 2a and 2b the number of contracts let was very small, but it was exposed to some legal challenge, the value of which exposure it estimated to be under £10 million.39
Government Response Summary
The government acknowledges the issues with cancelled contracts and legal exposure by detailing its ongoing work to bring HS2 Phase 2 work to an orderly stop, ensuring value for money. HS2 Ltd is developing detailed plans for closedown activities, including costs and milestones.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2024 3.2 The government is progressing its plan to implement amendments to Phase 1 of the HS2 programme, and to progress the closedown of the remaining phases. 3.3 The department is working through options to enhance the railway junction between HS2 infrastructure and the existing West Coast Main Line at Handsacre, near Lichfield, to improve the connection for passengers and freight customers. The department is also undertaking a review of HS2 infrastructure in delivery to ensure that the government is bearing down on costs and only delivering what is essential. 3.4 Following the government's decision to cancel HS2 Phase 2, the department and HS2 Ltd have started to bring the work on Phase 2a, Phase 2b Western Leg and HS2 East to a stop in an orderly, safe, respectful, and efficient way whilst ensuring value for money. Safeguarding directions on Phase 2a were lifted on 18 January 2024 and Phase 2b safeguarding (covering the former Western and Eastern Legs) will be amended by summer 2024, to allow for any safeguarding needed for Northern Powerhouse Rail. HS2 Ltd is developing detailed plans that will set out the scope of work for closedown activities, including remediation works to be undertaken and thereafter provide the costs and key milestones to complete the closedown of Phase 2a, Phase 2b Western Leg and HS2 East. 3.5 The department will provide an update in its next six-monthly report to Parliament. 3.6 The government agrees with the Committee’s recommendation. Target implementation date: during 2024 3.7 As set out in its November 2023 report to Parliament, the department is supporting the HS2 Ltd Executive Chair in delivering a comprehensive change programme in HS2 Ltd so that it is well placed to deliver the revised programme. A key part of this is ensuring the right skills and capability are in place. 3.8 The department will provide an update in its next six-monthly report to Parliament.