HS2 Project Cost Soars to £102.7bn, Delivery Delayed Until 2039

HS2 could now cost up to £102.7bn, the transport secretary has announced, but vowed the government will deliver the project "to completion".

Trains will not start running until between 2036 and 2039, up to six years later than the most recent official target of 2033, Heidi Alexander told the House of Commons.

The new cost range, delayed start and lower train speed are being announced as a "reset" of the delayed, over-budget and vastly scaled-back project is carried out.

"If it seems like an obscene increase in time and costs, it is because it is," she said. "If it seems like I'm angry, it is because I am."

In its original plan, the HS2 project was due to go to Manchester and Leeds, but those legs were cancelled by previous Conservative prime ministers. The current project is set to run from London to Birmingham.

"I can confirm today that it could cost almost as much to cancel the line as it would to finish it, while delivering none of the benefits," she said.

"This country can build big things, we just need competent people at the helm to deliver them."

Two-thirds of the increase in cost is due to an underestimate of costs by the previous government, inefficient delivery, and to works being missed from the scope of the original plan, according to the government. One third of the increase is due to inflation, Alexander said.

The new, lower speed for HS2 trains is in line with high-speed services in Europe and Japan, and the government says it could save up to £2.5bn and allow the project to be delivered a year earlier.

The updated timeline for the start of services is for trains between Old Oak Common in west London and Birmingham Curzon Street.

The full service from London Euston to Curzon Street and a connection to the West Coast Main Line is not expected to run until between 2040 and 2043.

"We will get the job done but we will also take every opportunity to save time and money in the process, getting a grip on delivery, controlling costs, and stripping out the complexity that's plagued the project in the past," she said.

"It is true that the early years of the HS2 project were beset with delay and cost overruns, with HS2 Ltd failing to maintain control of the budget, and frankly, the Department for Transport allowing them to get away with it," he said.

Mayhew said both Alexander and HS2 Ltd should set out "in detail" their plan for saving money and delivering the project on the new timeline.

"If she's as angry as she says she is, that must be backed up by consequential legislative changes that stop these cost overruns from occurring in the future," he said.

Alexander said HS2 Ltd chief executive Mark Wild has set the organisation a target of delivering the project by 2037 at a cost of £92.2bn.

"We support it, which gives him a clear mandate to drive down costs and improve productivity," she said.

Wild said he recognised this would be an unwelcome update on the project for local communities and taxpayers, but the reset was "the only way to regain control of the project".

"Really that decision on [reducing] speed should have been taken a long time ago to enable us to deliver the scheme at a lot less cost."