GovWire

Overview

I am reporting continued progress on High Speed Two (HS2) with the governments sixth update on HS2 to Parliament.?

The government remains committed to delivering HS2 from London Euston to Manchester and the East Midlands to bring our biggest cities and economic regions closer and giving companies and workers more choice about where they locate and live.

Since notice to proceed on Phase One 3 years ago, we have seen significant progress on construction of the Birmingham to London section, Royal Assent of the High Speed Rail (West Midlands to Crewe) Act 2021 and the introduction of High Speed Rail (Crewe to Manchester) Bill to Parliament.

On 9 February 2023, Sir Jon Thompson was appointed as the Chair of HS2 Ltd following an extensive search. The Secretary of State for Transport was pleased to meet him and the HS2 Ltd Board in Birmingham on 12 April 2023 to discuss the programme.

Progress on building the railway has been achieved in the face of significant challenges from the effects of COVID-19 and the impact of excess inflation driven by the war in Ukraine.

As the Secretary of State for Transport outlined in his written statement to Parliament on 9 March 2023, the government has acted to balance the nations books, necessitating deferral of some of the Department for Transport (DfT)s capital spending including rephasing the delivery of parts of HS2.As set out in previous reports, the government remains concerned about the increasing projected costs to complete Phase One reported by HS2 Ltd.

Construction of the Old Oak Common to Birmingham Curzon Street section continues at full pace, which will provide initial passenger services to schedule. There has been notable progress on this section in this period.

HS2s tunnel boring machine (TBM) Dorothy began and completed her second one-mile tunnel bore under Long Itchington Wood in Warwickshire and the Chiltern TBMs reached the halfway point of their 10-mile drive at Christmas. SixTBM journeyshave now been launched on Phase One and driven a total distance of approximately 14.5 miles.Work is progressing north of Birmingham but has been rephased south of Old Oak Common and at Euston.

We remain committed to delivering HS2 services to Euston. We have decided not to proceed with construction at Euston over the next 2 years both to reduce expenditure during that period and to address the affordability challenge set out in the recent National Audit Office report. We will use this time to develop a more affordable scheme design that delivers for passengers, the local community and taxpayers.

The government will not be proceeding to construction on Phase 2a (West Midlands to Crewe) in the next 2 years to reduce expenditure. We will use the time to develop mature designs and delivery approaches to ensure that this section is delivered in the most cost-effective way.

The High Speed Rail (Crewe to Manchester) Bill Select Committee members have now been appointed and the committee has begun hearing petitions against the bill and first additional provision (AP1), which gives effect to Parliaments instruction to remove the Golborne Link from the bill while alternatives are considered.

Other notable milestones of the HS2 programme in this reporting period include:

• HS2 Ltd and its supply chain have now begun over 1,200 apprenticeships, more than halfway to the target, with the programme now supporting over 28,500 jobs as of March 2023
• there are now 19 diesel-free work sites on the HS2 programme. This is a significant step towards the projects aim to cut carbon emissions during construction and improve air quality for workers and local communities
• in North Warwickshire, the Marston Box Rail Bridge the worlds longest box slide was successfully installed. During a short closure of the M42 over Christmas 2022, 450 people worked to move the 12,600-tonne box structure 165 metres across the motorway into position

Despite the global economic challenges, this government is continuing to invest in the countrys future infrastructure. HS2 is not just a railway: it will drive economic growth and opportunities across the country, provide a low-carbon alternative to car travel and domestic flights and train a skilled workforce for the UKs future infrastructure sector.

This report uses data provided by HS2 Ltd for Phases One, 2a, 2b and HS2 East and covers the period between September 2022 and February 2023 inclusive. Unless stated, all figures are presented in 2019 prices. Data on benefits performance is reported on quarterly; the data included in this report is taken from March 2023.

Programme update??

Schedule

The forecast date for initial HS2 services between Birmingham Curzon Street and Old Oak Common remains within the range of 2029 to 2033.

On the Phase 2b Western Leg, we continue to aim for the delivery of the railway within the estimated delivery-into-service date range of 2035 to 2041, as provided in the Strategic Outline Business Case. The High Speed Rail (Crewe to Manchester) Bill is currently working its way through Parliament.

Following the decision to rephase the construction of Euston and Phase 2a, revised delivery-into-service ranges for these elements of the railway will be confirmed once plans have been redeveloped.

Affordability

As set out in the last Parliamentary Report, HS2 Ltd has advised DfT that its projected costs for Phase One would exceed the target cost of 40.3 billion if unmitigated.

HS2 Ltds Executive and Board are currently reviewing the estimate at completion for Phase One. This will assess the previous pressures and further emerging costs as well as the work the government commissioned from HS2 Ltd to address these pressures.

With around half of the Phase One budget spent and significant work completed on enabling and main works, this is an appropriate time to review the projected costs against the budget noting that significant judgments remain in any projection. I will update Parliament further once this important work has been concluded and assured.

As reported in the recent National Audit Office report on Euston, the latest proposed target price from the construction partner (Mace Dragados joint venture) is 4.8 billion around 2.2 billion over HS2 Ltds budget and a higher cost than the previous design.

I visited the Euston site on 5 April 2023 and saw for myself the challenges of constructing a complex station in a dense urban environment that will integrate with the existing conventional station and London Underground and local transport, as well as enabling oversite development.

Nonetheless, the station is not affordable at this cost, nor in any case, does the government have the financial headroom to proceed with the construction over the next 2 years. We will, therefore, use the time to look again at the Euston station design to ensure it delivers for passengers, the local community and taxpayers. This will include considering how we might partner with the private sector to capture benefits for customers.It will require careful prioritisation of requirements and a willingness from stakeholders to compromise.

I welcome the NAOs report and recommendations and we will act upon them as we look again. Officials are now working with the Euston Partnership, HS2 Ltd and Mace Dragados to understand the causes of the additional costs and to develop alternative delivery options. I will update Parliament as this work progresses through future publications of this report.

As it was noted in the last Parliamentary report, like the rest of the economy, the HS2 programme has experienced higher-than-expected levels of inflation, which 