Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Accepted
Delaying Euston tunnel contracts risks significant additional costs and taxpayer burden.
Conclusion
We raised concerns about the risk of incurring significant additional cost later if contracts for the tunnel between Old Oak Common and Euston were not let in the coming months. The Department said there were significant phasing issues of this nature 40 Q 129 41 Q 132 42 Committee of Public Accounts: HS2 Euston, 63rd Report of Session 2022–23, HC 1004, 7 July 2023 43 Department for Transport: NETWORK NORTH: TRANSFORMING BRITISH TRANSPORT, CP 946, October 2023 44 Q 147 45 Q 149 46 Qq 147, 164–5 47 Qq 152–3 48 Q 160 49 Qq 155, 156 16 HS2 and Euston for the Euston redevelopment that it would have to address pragmatically. It recognised the issue that there is a dependency on getting the tunnelling away to open Old Oak Common and said that, ultimately, it might seek funds to compensate the Government for that tunnelling from the private sector as part of the wider development – “If there is a cash flow issue, the taxpayer will probably have to substitute for that in the short term.”50 The Department told us that “The attractiveness of Euston and the high-speed station at Euston is only going to be realised if you have the approach into Old Oak Common. That is understood.”51
Government Response Summary
The government agrees with the committee's concerns, reiterating its ambition to deliver HS2 to Euston and confirming that work is underway to develop funding packages and financing mechanisms for the Euston Quarter, including options to pay for the Old Oak Common to Euston section, with preparatory tunnelling works continuing.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2024 4.2 The government’s ambition remains to make the best use of funding from alternative sources to enable the delivery of HS2 to Euston and the creation of a transformed Euston Quarter. 4.3 Work is currently underway to develop funding packages and financing mechanisms that best meet the objectives of the Euston Quarter while delivering value for money for the taxpayer. The approach aims to use private sector discipline and maximise the level of private investment to deliver the descoped transport infrastructure at a lower cost alongside more ambitious housing and regeneration opportunities. 4.4 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2024 4.5 As set out in the Network North command paper of 4 October 2023, the government remains committed to delivering HS2 between Birmingham and Euston as planned. 4.6 The government’s ambition is to make best use of funding from alternative sources to enable the delivery of HS2 to Euston. The government continues to define and develop a range of development models and financing mechanisms to best meet the objectives of the Euston Quarter while delivering value for money for the taxpayer. 4.7 This includes the consideration of options to pay for the section of HS2 from Old Oak Common to Euston. The department and HS2 Ltd are currently working on these options with preparatory works continuing in the meantime ahead of the commencement of tunnelling.