HS2 reset: cost up to £102.7bn, trains delayed to 2039

Transport Secretary Heidi Alexander announced that the HS2 high-speed rail project could now cost up to £102.7bn.

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

To reduce costs, the trains’ top speed will be cut from the originally planned 360km/h (224mph) to 320km/h.

The new cost range, delayed start and lower speed come as part of a “reset” of the over-budget, delayed and significantly scaled-back project.

Alexander published the Lovegrove report into HS2, which she said details the “litany of failure” inherited from the previous Conservative government.

“Instead of signalling the country’s ambition, HS2 became a signal of the country’s decline,” she told MPs.

Alexander said the rail project was now expected to cost between £87.7bn and £102.7bn in 2025 prices.

In 2013, the project was forecast to cost £50.1bn in 2011 prices, equivalent to about £75bn in today’s money when adjusted for inflation.

However, that forecast was made when the line was still due to run to Manchester and Leeds; the current project is set to run only from London to Birmingham.

Two-thirds of the cost increase stems from cost underestimation by the previous government, inefficient delivery and works omitted from the original scope, according to the government. Alexander said one-third of the increase is due to inflation.

The new, lower speed for HS2 trains aligns with high-speed services in Europe and Japan, and the government said 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 applies to trains between Old Oak Common in west London and Birmingham Curzon Street.

The full service from London Euston to Curzon Street, including a connection to the West Coast Main Line, is not expected to start 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,” Alexander said.