HS2 budget review is... to be reviewed

Concerns multiply over the increasing costs of the high-speed London to Birmingham rail link

Fears over the £33bn budget for the hugely controversial High Speed Two (HS2) rail link are escalating as the team behind the project has launched yet another cost-cutting review.

The Independent on Sunday can reveal that HS2 Ltd, which is owned by the Department for Transport (DfT), is trying to find further savings so that it can stick to its original budget, having only just finished its first review.

HS2 is struggling with costs 13 years before the first passengers buy tickets for the super-fast trains that will cut the 84-minute London to Birmingham journey time to 49 minutes. Any cost overruns would badly damage the financial arguments for HS2, which include creating more than 100,000 jobs and generating around £60bn for businesses and the wider economy.

Alison Munro, HS2's chief executive, has already admitted that there are problems with higher than expected construction costs, while professional services fees, such as those for engineers designing parts of the route, are rising. Some rail experts believe the final bill for HS2 could be as much as 20 to 30 per cent higher than the £32.7bn estimate – or that the Government will have to scale back its proposals drastically.

HS2's first cost-cutting exercise, known as Baseline 2, highlighted concerns over issues such as professional fees and VAT. In recent weeks, Baseline 3 has started, which is said to probe the more detailed design work and examine technical details that could be altered to help get costs under control.

Last month, the National Audit Office identified a £3.3bn funding gap between 2017 and 2021, which are the key years for constructing the first phase of a rail link that will ultimately run to Manchester, Leeds and Edinburgh.

Opponents of HS2, including environmentalists angered by the potential blight on the countryside and the disruption to ancient woodland, seized on the latest evidence of a cash crisis. Joe Rukin, campaign manager at Stop HS2, said: "They've reviewed the costs and immediately started a review of the review of the costs. HS2 Ltd hasn't been able to get a single figure right; there's not a single figure that we trust.

"What really worries people is that in the end it won't be construction costs that get squeezed but mitigation and compensation [for homeowners and businesses that are forced to move]."

Stop HS2 is holding a convention in Staffordshire at the end of this month, when around 600 protesters will be given what Mr Rukin described as a "crash course" in campaigning against the project. They will also be able to top up campaign funds if they splash out £28.50 on hooded tops, or snap up 35inx24in flags with the "Stop HS2" logo.

An HS2 spokesman said: "We're always working to manage the cost of HS2 and part of that is an ongoing efficiency challenge group. It's an ongoing programme."

There have already been some major changes to HS2's ambitious vision. The demolition and rebuilding of Britain's sixth busiest railway station, Euston, was scrapped after officials realised they had underestimated the cost by 30 to 40 per cent.

It is also believed that a row is brewing over how HS2 should be built. It had been thought that a large private sector organisation or consortium would be brought in to oversee construction, which is what happened at the London 2012 Olympics after it was discovered that the original budget was a wild underestimate of the real cost.

Instead, it appears that the DfT wants to keep control of the project itself. Last month Andrew McNaughton, technical director of HS2, said that the UK had become over-reliant on the type of multinational engineers that manage some of the country's biggest projects.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
JK Rowling will not be releasing a 'romance' novel anytime soon
books
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidates on the verge of tears as they were ejected from the boardroom
News
One of the 'princesses' in the video
videoYouTube reinstates sweary video after takedown for 'violating terms'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Business Intelligence Consultant - Central London - £80,000

£65000 - £80000 per annum: Ashdown Group: Business Intelligence Consultant - C...

SEN Teaching Assistant

£70 - £85 per day: Randstad Education Group: SEN Teaching Assistants needed in...

Year 4 Teacher required for 2 terms

£21500 - £35000 per annum: Randstad Education Cambridge: Randstad Education ar...

Accounts Assistant - Sales Ledger, Sage Line 50 - St Albans

£20000 - £22000 per annum + benefits: Ashdown Group: A highly successful and w...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?