HS2 faces further delays and cuts as UK government seeks to rein in cost of high-speed line
Britain’s planned High Speed 2 rail line faces further delays of up to four years and more cuts to the project under plans being drawn up by ministers to rein in its ballooning costs.
The extra delays to the country’s biggest infrastructure project would mean it would not be completed until as late as 2045 — 12 years later than originally planned.
Mark Harper, transport secretary, last week met John Glen, chief secretary to the Treasury, to discuss plans to cut billions of pounds from the department’s capital budget after 2025. The price tag of HS2 has soared from £33bn a decade ago to an estimated £100bn making the project a prime candidate for savings.
The transport department’s capital budget is facing a shortfall of £5bn by 2027/28 after chancellor Jeremy Hunt only committed to maintain capital spending “in cash terms” after 2025, resulting in a big real-terms cut with inflation running at a record high.
“This is a function of inflation, we are having to find huge savings because the cost of everything the department is already doing will have become so much more expensive by then,” said one government official.
In October, the Financial Times reported that the Treasury had asked HS2’s management team to identify potential cuts or “scope reductions” to the high-speed line.
Transport department officials have subsequently begun work on “Project Silverlight” aimed at finding cost savings, through a combination of delays and cuts, in the first phase of the project that will link London to Birmingham, according to insiders.
They are also examining cost-cutting across the entire HS2 project to save money over the next five years under an initiative dubbed “Operation Blue Diamond”. Government officials said both reviews would run until the summer with no final decisions made before then.
The opening of the first phase of HS2 has already been pushed back from 2026 to a “window” of 2029 to 2033, while completion of the second part of the line to Manchester and a truncated eastern leg was pushed back from 2033 to between 2035 and 2041.
In a bid to cut costs further, the government shelved a 140km stretch of the eastern leg from East Midlands Parkway to Leeds two years ago. The latest cost-cutting initiative is now examining scrapping the remaining 60km stretch of the eastern leg.
Another potential cut to the scope of the project is the Handsacre Link, which would connect HS2 to the existing West Coast main line, allowing high-speed trains to serve Stafford and Stoke-on-Trent.
Project Silverlight also includes attempts to cut excessive spending by benchmarking costs against big rail schemes such as London’s Crossrail, now known as the Elizabeth line, and HS1, that runs from the capital to the Channel Tunnel.
The wider Blue Diamond review has put forward three different scenarios, all of which include lengthy delays ranging from two to four years for the project’s completion.
But its so-called “nuclear” option under which HS2 would stop at Old Oak Common in west London rather than run into the terminus at Euston as planned was rejected by Hunt last month.
Noble Francis, economics director at the Construction Products Association, warned any changes risked pushing up the price further “due to the additional cost of the design, consultant and project management teams”.
Tony Travers, professor of economics at the London School of Economics, said: “Delaying but committing to the project just puts off the evil day when a chancellor has to make the final decision as to what to build.”
Louise Hague, Labour’s shadow transport secretary, called for an end to “Tory chaos and indecision” on key rail infrastructure: “It’s time for ministers to come clean on these plans which could strangle the project for years and prevent if delivering the full benefit.”
The government said: “We do not comment on speculation.”