HS2: Boris Johnson’s government announces review into whether major rail project should be axed

Move follows revelation project will cost up to £30bn more than expected

The future of the HS2 rail project is hanging in the balance with the announcement of a review into whether it should be axed.

Business and political leaders mounted an angry backlash when Grant Shapps, the transport secretary, ordered the fresh analysis into the scheme, arguing he was unconvinced it represented value for money.

The move followed the revelation that HS2 will cost up to £30bn more than expected, with a bill between £70bn and £85bn – not the £56bn budgeted.

The project has been dogged by a series of delays, concerns over poor management and allegations by whistleblowers that parliament was misled on the cost of land purchases.

But HS2 is overwhelmingly supported by council chiefs in the north and midlands, which would be connected to London by trains capable of travelling at 250mph.

The threat to scrap it was branded a “disaster” by a midlands strategy group, which warned it would undermine plans to transform the region’s road and rail network.

The Federation of Small Businesses protested that pulling the plug on HS2 would be repeating the “stop-start approach to major transport investment that’s held our economy back for decades”.

And Andy Burnham, Labour’s Greater Manchester mayor, while not opposing a review, suggested the government’s “commitment to the north” was about to be tested.

“People here are watching closely and will demand nothing less than the Northern Powerhouse that was promised,” Mr Burnham cautioned.

But the move delighted many Conservative MPs, who had piled pressure on Boris Johnson to follow through on his criticisms of HS2, made during the Tory leadership campaign.

“Fantastic to hear that there will be an independent review into whether to proceed with HS2,” David Davis, the former Brexit secretary, tweeted.

“It’s time to cancel this white elephant and spend money where it will have the most impact across the country.”

Boris Johnson had already made his scepticism clear during the Tory leadership campaign, criticising the way costs are “spiralling out of control” and refusing to guarantee it would go ahead as planned.

Mr Shapps said the government needed to know the “facts”, despite parliament approving HS2, a project in gestation for at least a decade.

“What I’ve said to Doug Oakervee – who’s undertaking this review – and what the prime minister has said, too, is, ‘Just give us the facts’,” he told Sky News.

“Go and find out all the information that’s out there. Give us exactly where we are up to, really, genuinely what it would cost to complete this project, then we will know and we will be in a much better position to make the decision to ‘go or no go’ by the end of the year.”

His department wanted a “blank sheet of paper” on HS2 and he said he had brought in an expert to “get to the bottom of what is the right way forward”.

The move was strongly criticised by the British Chambers of Commerce, amid rising tensions with business leaders over the risk of a no-deal Brexit.

“There is a strong economic case for delivering all phases of HS2,” said Adam Marshall, the organisation’s director general.

“The delivery of other transformational schemes, including Northern Powerhouse Rail, rely on the connections that HS2 will make.

“While no project should have a blank cheque, business communities across the UK will be concerned about the potential for further delays to HS2.”

The terms of the review insist it will also consider the merits of building the northern sections, linking into cross-Pennine improvements, ahead of the southern London-Birmingham link.

It will be led by Mr Oakervee, a former chair of HS2 Ltd, the company set up by the government to carry out the project.

Costs are spiralling because of “poor ground conditions found during the surveying work” and plans for trains to “run at even higher speeds than other comparable rail projects”, the Financial Times was told last month.

About £7.4bn has already been spent on HS2, mostly on buying up property and on preparatory work such as demolitions around Euston station in London.

Phase one between London and Birmingham is due to open at the end of 2026, with a second phase to Leeds and Manchester scheduled for completion by 2032-33.

Darren Caplan, the chief executive of the Railway Industry Association, said the organisation hoped the “quick” review would lead to a go-ahead in December.

“We should put the HS2 scheme into perspective and remember all the benefits it brings,” he said.