Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The cancellation of the second phase of the HS2 high-speed railway line has cost taxpayers more than £2bn, according to the project’s annual report released on Monday.
Former prime minister Rishi Sunak axed plans for the leg in October 2023 after long delays and cost overruns that had led to estimates it would cost more than £70bn in 2019 prices.
HS2, the arm’s-length body responsible for delivering the project, said £8.6bn of taxpayers’ money was spent on it in the year to the end of March, up from £6.9bn the previous year.
The total spend included £2.17bn in costs associated with scaling back the railway, including remediation and wind-down costs, and ensuring that work could be stopped safely.
The cost of cancelling the northern leg of the HS2 project, which would run north of Birmingham, will add to growing concerns over the value for money of the remainder of the railway line. The line would have originally enabled trains to run at a maximum speed of 360km/h in a Y-shape between London, Manchester and Leeds.
Once Britain’s most ambitious infrastructure project, HS2 has faced budget overruns and delivery delays, as well as allegations over conflicts of interest and transparency.
The line will now run between Birmingham and a new station at Old Oak Common in west London, until plans are finalised for a new terminus at Euston station, where demolition of surrounding areas started several years ago.
A National Audit Office report last week said it would be several years before trains would run to the proposed Euston terminus in central London with plans yet to been finalised.
The public spending watchdog warned that without additional capacity on the West Coast main line, passengers would potentially need to be put off using the existing overstretched railway.
This is because the new purpose-built HS2 trains would be slower and have less capacity than existing services once they switch to the older tracks north of Birmingham.
Tony Travers, professor at the London School of Economics, said there was a “serious lack of transparency” over the project.
“The annual report is vitally important as there is virtually nothing published in the public domain about how HS2 plans to use its money in the future, anything of interest in the board papers is heavily redacted, and there is no published budget or corporate plan with financial details.”
Northern leaders and businesses had long said the main benefits of the scheme were to the economies of the North and the Midlands.
Henri Murison, chief executive of the Northern Powerhouse Partnership lobby group of businesses, said the government would need to carry out “further detailed work” to plan for the West Coast main line’s capacity problems in the absence of HS2.
“At least some recently cancelled sections of new line will almost certainly still need to be built,” he said. “However, this is in the end funded and financed.”
The report also revealed that Mark Thurston, HS2’s former chief executive, was paid £652,569 for his final year, including a £34,345 bonus. Thurston announced his resignation in 2023 after six years.
HS2 has since appointed Mark Wild, a former head of London’s Elizabeth line, as chief executive.