Asked by: Margaret Greenwood (Labour - Wirral West)
Question to the Department for Transport:
To ask the Secretary of State for Transport, what recent estimate he has made of the total cost of the HS2 programme.
Answered by Andrew Stephenson - Minister of State (Department of Health and Social Care)
The full HS2 network is estimated to cost between £72-£98Bn (2019 prices). The numbers include contingency to accommodate unforeseeable cost pressures which may emerge during construction, as is to be expected with all major infrastructure projects. More information on cost can be found in the 6-monthly parliamentary reports.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government when they will correct the figure for the estimated cost of the works for HS2 Phase 2a on their website page HS2 Phase 2a: High Speed Rail (West Midlands to Crewe) Act 2021; why other documents on this page have been updated but this figure has not; and whether they will place in the Library of the House the most recent comparable figures.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The estimated cost of works on the gov.uk web page is the Estimate of Expense as required by Standing Order 45 of the House, when the High Speed Rail (West Midlands to Crewe) Bill was deposited in July 2017. There is no requirement for the Estimate of Expense to be updated, although other documents linked on the web page have been updated when required by Standing Orders. The Government committed to regularly update Parliament on the progress of the HS2 programme by issuing reports twice a year, with the most recent on 23 March and contains updated cost figures.
Asked by: Jon Trickett (Labour - Hemsworth)
Question to the Department for Transport:
To ask the Secretary of State for Transport, what recent estimate he has made of the cost to the public purse of the High Speed Two rail project.
Answered by Andrew Stephenson - Minister of State (Department of Health and Social Care)
In April, the Government approved the Full Business Case for Phase One and set the funding envelope at £44.6bn (2019 prices), including Euston. The overall Phase 2a estimated cost is ranged between £5-7bn (2019 prices). Updated cost estimates will be provided for the Phase 2b links to Manchester and Leeds once the Integrated Rail Plan is concluded. The Government has committed to keeping Parliament regularly updated on the latest cost estimates of the scheme via twice yearly reporting. The first of these was published in October and can be accessed below: https://www.gov.uk/government/speeches/hs2-6-monthly-report-to-parliament.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether HS2 Ltd used the same methodology to estimate costs on the (1) Area South, (2) Area Central, and (3) Area North, sections of the HS2 Phase One line of route.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
HS2 Ltd has utilised a number of methodologies to ensure that its cost estimates are robust, consistent, and appropriate These principles are put in place to enable a common approach for benchmarking across the three Areas of the Phase One line of route, and in order to demonstrate value for money.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government what methodology was used by HS2 Ltd to estimate the costs of the HS2 Phase One line of route between London and the West Midlands.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
HS2 Ltd has used a range of methodologies to estimate the cost of Phase 1 including New Rules of Measurement (NRM), Rail Method of Measurement (RMM), and Civil Engineering Standard Method of Measurement (CESMM). The estimates are tested through benchmarking techniques and ultimately validated through the contracted prices secured with suppliers.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government, further to the publication of their Full Business Case – High Speed 2 Phase One, published on 15 April, why “spend up to the end of 2019 has been treated as sunk and excluded from the appraisal”; whether they have written off such costs in any other major projects previously; if so, which; and whether the exclusion of such costs is compliant with the guidance issued in The Green Book.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The spend to date on HS2 up to the end of 2019 was £7.5bn (2015Q1 prices, excluding VAT). However not all of this is treated as sunk costs in the economic case as the land and property costs could be recoverable were HS2 not to go ahead.
what would the benefit-cost ratio figures be if those costs had been included;
The benefit cost ratio figures including sunk costs are as follows:
| Full Network | Statement of Intent | Parliamentary Powers |
BCR without WEIs | 1.1 | 0.8 | 0.8 |
BCR with WEIs | 1.3 | 1.0 | 1.0 |
whether the writing off of development costs up to the time of Notice to Proceed is in compliance with the HM Treasury's Green Book;
The appraisal of HS2 has been undertaken in compliance with HM Treasury’s Green Book. The Green Book states that “[w]hat matters are costs and benefits affected by decisions still to be made.”
what other Government-funded projects have had the development costs written off; and whether any such costs were written off in order to improve the benefit-cost ratio figures.
Costs have not been written off in the approval of HS2, HS2 Ltd’s delegated Funding Envelope (the “Target Cost”) for Phase One is £40bn (2019 prices). This Target Cost includes the costs already spent on the project.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government, further to Full business case High Speed 2 Phase One, published on 15 April, what is the total amount of the ‘sunk costs’; what costs incurred before December 2019 were not included in the economic appraisal; what would the benefit-cost ratio figures be if those costs had been included; whether the writing off of development costs up to the time of Notice to Proceed is in compliance with the HM Treasury's Green Book; what other Government-funded projects have had the development costs written off; and whether any such costs were written off in order to improve the benefit-cost ratio figures.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The spend to date on HS2 up to the end of 2019 was £7.5bn (2015Q1 prices, excluding VAT). However not all of this is treated as sunk costs in the economic case as the land and property costs could be recoverable were HS2 not to go ahead.
what would the benefit-cost ratio figures be if those costs had been included;
The benefit cost ratio figures including sunk costs are as follows:
| Full Network | Statement of Intent | Parliamentary Powers |
BCR without WEIs | 1.1 | 0.8 | 0.8 |
BCR with WEIs | 1.3 | 1.0 | 1.0 |
whether the writing off of development costs up to the time of Notice to Proceed is in compliance with the HM Treasury's Green Book;
The appraisal of HS2 has been undertaken in compliance with HM Treasury’s Green Book. The Green Book states that “what matters are costs and benefits affected by decisions still to be made.”
what other Government-funded projects have had the development costs written off; and whether any such costs were written off in order to improve the benefit-cost ratio figures.
Costs have not been written off in the approval of HS2. HS2 Ltd’s delegated Funding Envelope (the “Target Cost”) for Phase One is £40bn (2019 prices). This Target Cost includes the costs already spent on the project.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the Department for Transport:
To ask the Secretary of State for Transport, whether the recent cost projections of High Speed Two meet his Department’s benefit-cost ratio guidelines.
Answered by Andrew Stephenson - Minister of State (Department of Health and Social Care)
The forthcoming cost-benefit analysis which will inform the HS2 Phase One Full Business Case will include the recent cost projections for the project. These costs are used within the economic case and align with the department’s Transport Analysis Guidance, which will also be reflected within the Business Case.
Asked by: Lord Berkeley (Labour - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government, further to the statement by Baroness Vere of Norbiton on 11 February (HL Deb, col 2153), whether the projected cost for the first phase of HS2 includes the capital cost of rolling stock, provision of power supply, and infrastructure and rolling stock maintenance facilities.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The projected costs for HS2 (phase 1) are inclusive of the design and build of the rolling stock, the connections to the national grid for power supplies, and the infrastructure and rolling stock maintenance facility.
Asked by: Lord Alton of Liverpool (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government how they respond to the assessment of Lord Berkeley, former deputy chairman of the Oakervee Review into HS2, that (1) Parliament has been misled about the cost of HS2, (2) it could cost more than £100 billion, and (3) the costs are “out of control”.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Lord Berkeley’s report represents his personal views. The Secretary of State commissioned the Oakervee Review to provide advice on how and whether to proceed with HS2, including examining the project’s costs and benefits. Douglas Oakervee’s report will inform our assessment of the estimated cost, if the Government decides to proceed. We will of course give appropriate consideration to Lord Berkeley’s personal views.