HS2: Budget and Costs

Lord Berkeley Excerpts

Tuesday 24th July 2018 Lords Chamber

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government when they intend to update the cost estimate and business case for HS2 Phase One.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, HS2 cost estimates and business cases are periodically updated as the scheme design is progressed to ensure that the scheme remains affordable and viable. HS2 Ltd is currently developing an updated phase 1 cost estimate, to be finalised prior to the completion of the phase 1 full business case accompanying the authorisation of notice to proceed in June 2019. The Government remain confident that the phase 1 cost estimate will remain within the SR15 funding envelope of £27.18 billion.

[Lord Berkeley (Lab)]

My Lords, I am grateful to the noble Baroness for that Answer. It is good that HS2 is regularly updating its budget, but it is a pity that no one knows about it. The last public budget given was in 2013, which is five years ago. Since then, we have had reports of the land purchase costs going £2 billion over budget and well behind, while a report in the Sunday Times last weekend by the consultant to the Infrastructure and Projects Authority using Treasury figures said that the project is up to 60% over budget and was in a “precarious” and “fundamentally flawed” position. Many other reports have also cited increased costs and delays. How can Ministers go on saying that they do not recognise the figures that are coming from all these different sources? Indeed, the Minister has almost repeated that today. Is it not time that we had a review of this project in costs and programme terms, because spending £100 billion with no budget for five years is surely not a good use of public money?

[Baroness Sugg]

My Lords, I thank the noble Lord for his question, and I greatly respect his lifetime of experience in the rail industry. I am also grateful for the noble Lord’s continuing scrutiny of HS2. As I have said, we continually update the cost estimates, but we do not share the details of those estimates as they are commercially sensitive. However, the headline figures will inform the business case as published in 2019. I understand that the article in the Sunday Times was based on an end-of-role report from a few years ago, and of course we do not comment on leaked documents. HS2 does not recognise or agree with either the analysis or the figure it contains, while the Infrastructure and Projects Authority recently described the HS2 programme as on target to be completed on time and on budget.