HS2 could be cut further amid rising costs as hundreds of contracts for the rail project remain unsigned and ministers search for savings ahead of the November 17 budget.
- Transport Secretary Mark Harper said the government was looking into the finances
- He said they are looking into the possibility of delivering HS2 in a “more efficient way”.
- He also insisted that they were committed to delivering it on time and on budget
- However, DfT’s Clive Maxwell said he would not “speculate” on a time frame
Officials indicated yesterday that HS2 faces further cuts amid rising costs.
Transport Secretary Mark Harper said his department is “looking at all the programs we have” for savings ahead of the November 17 budget statement.
This includes how the high-speed rail project can be delivered “in a more efficient way,” he said.
But he also insisted that the government “remains committed to delivering HS2 on time and within budget”.
Separately, Clive Maxwell, the Department for Transport’s HS2 official, said “I wouldn’t speculate” when asked if the project could be scaled back again.
Speaking to members of the House of Commons transport committee, he added: “It is clear that the government is looking at its finances.”
HS2 faces deeper cuts as Transport Secretary Mark Harper said his department was “looking at all the programs we have” for savings ahead of the November 17 budget statement.
It came as sources close to HS2 said many of the contracts that officials should have agreed to by now are not rubber stamped and are piling up at Whitehall.
They’re “pretty normal contracts,” according to an insider, casting more doubts about the project’s future.
The source said: No contracts worth hundreds of millions were signed, mainly related to the section between Birmingham and Crewe.
“It’s very nice to say you’re committed, but you have to do some things to show you’re committed.”
At the weekend, Upgrade Secretary Michael Gove raised the possibility of a HS2 cut.
When asked yesterday if Mr Gove was wrong, Mr Harper told LBC: ‘It’s clear that we are focused at all times on how to deliver high-speed rail services in the most efficient way… And in light of the fall statement, we’re looking at all the programs that we’ve got.
“But the government remains committed to delivering HS2 on time and within the budget we have set.”
As he told ITV’s Good Morning Britain: “Of course we’re looking at how you can get efficiencies, how you can do things in a more efficient way… We’ll continue to focus on getting value for money for taxpayers.”
HS2 chief executive Mark Thurston said he was “confident the government will make the right decision” by moving forward with the project in its current form.
But he also warned that the current maximum budget of £71 billion for high-speed line delivery between London and Manchester would increase significantly as the figure is based on 2019 prices.
The source said: No contracts worth hundreds of millions were signed, mainly related to the section between Birmingham and Crewe.
Amid rising inflation, the cost of steel rose nearly fourfold at one point and the price of concrete by 10 percent.
Asked if the final cost would end up being ‘much higher’, he told MPs on the committee: ‘Well, that was determined by the 2019 prices, and therefore they should be indexed at an appropriate time. But that’s just about dealing with inflation (currently at around 10 percent).
The London to Birmingham station alone is likely to exceed the latest ‘target cost’, with more than a quarter (£1.5bn) of HS2 Ltd’s £5.5bn emergency fund spent.
HS2, which was originally set to cost more than £100bn, has already been slashed twice.
Former prime minister, Boris Johnson, ruled out the majority of the project’s “eastern terminus”, which was due to link Birmingham with Leeds, in November last year. The move saved up to £30 billion.
A branch linking HS2 to the main West Coast line near Wigan, known as The Golborne Link, was also disconnected in June, saving up to £3 billion.
