HS2 construction delays expected in bid to cut costs

Rishi Sunak’s government is set to delay some sections of the ambitious HS2 high-speed railway project in a bid to save money.

The decision will affect the section of the high-speed railway between Birmingham and Crewe, and between Crewe and Manchester, according to the BBC.

HS2 has been dogged by criticism over its finances, with costs ballooning far beyond the initial estimates set out during David Cameron’s Conservative government.

The whole project, aimed at creating a high-speed rail line being built from London to the North West, was given a budget of £55.7bn in 2015.

But the overall target cost, excluding the eastern leg of Phase 2b from the West Midlands to the East Midlands, has ballooned to between £53bn and £71bn.

Rail minister Huw Merriman told the Commons last week that the government is still “absolutely committed” to delivering HS2, but warned that “cost pressures” must be examined.

Responding to the report that the project will be delayed, Mr Sunak’s official spokesman said: “You will know there’s work already under way on HS2.

He added: “Equally the rail minister has been clear we’re continuing to look at any cost pressures and ensure the project delivers value for money for taxpayers.”

But soaring inflation means at least £2bn extra will be needed for the London to Birmingham section alone since the government offered its last estimate in October.

HS2 Ltd chief executive Mark Thurston recently said the project has suffered a “significant” impact from inflation adding to the cost of building materials, labour, fuel and energy.

“We’re looking at the timing of the project, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation,” he told the BBC.

Senior Tory MP Simon Clarke – the former chief secretary to the Treasury under Liz Truss – described delaying the project as a “sensible decision”.

He said: “Having observed HS2’s progress as chief secretary, I have serious doubts as to value for money and cost control.”

Michael Fabricant, also a Tory MP, said he will ask the government whether the delay “marks the end of HS2 north of Birmingham” and if the “damage” done in southern Staffordshire – including to his Lichfield constituency – will be repaired.

The Tory MP added: “Simply saying the project is delayed is not good enough. This project with the backing of Labour and the Lib Dems should never have gone ahead in the first place.

“Covid has encouraged remote working and even now regular rail commutes are down by 40 per cent on pre-Covid levels. The government are well aware this makes the business case for HS2 even less convincing than it was in the first place.”

But Andy Bagnall, chief executive for rail industry lobby group Rail Partners, said recent inflationary pressures had made infrastructure projects “more challenging” but insisted HS2 was worth pushing forwarg.

“It is critical for Britain’s economy and meeting net zero targets that large sections of HS2 are not delayed, which will ultimately increase the overall cost,” he said.

The rail industry chief added: “We must address industry financial challenges across infrastructure and operations head on – not focusing solely on cost reduction, but also on driving revenues to close the financial gap and reduce the railway’s reliance on taxpayer funding.”

In October last year, transport secretary Mark Harper said the forecast for when HS2’s phases would be complete remained within planned ranges.

That involved Phase One – connecting London with Birmingham – opening between 2029 and 2033. Services will initially start and end at Old Oak Common, west London, due to delays at Euston.

Mr Harper said Phase 2a, extending the line from Birmingham to Crewe, was “on track” to be completed between 2030 and 2034. The date range for the western leg of Phase 2b, connecting Crewe with Manchester, remained between 2035 and 2041.

No timetable has been set for when the eastern leg of that phase will open as it is at the early stage of development. A planned extension to Leeds was shelved in November 2021.