HS2 contracts could be amended to secure funds for London leg to Euston

HS2 contracts could be overhauled under a new push by Labour to deliver the leg between Birmingham and central London at the “lowest reasonable cost”.

Transport Secretary Louise Haigh announced an independent review into oversight of the troubled high speed line on Sunday, after it emerged that HS2 could not clarify whether the project was over budget by £10bn or £20bn.

The Department for Transport reconfirmed the Government would not be “resurrecting” Phase 2 of the high-speed line north of Birmingham, which was cancelled by the Conservatives.

“The Government recognises concerns about connectivity between Birmingham and Manchester, but its primary focus now is the safe delivery of HS2 between Birmingham and London at the lowest reasonable cost, and the Secretary of State has made this objective clear to HS2 Ltd,” the DfT said in a press release.

The DfT said that a “Major Transport Projects Governance Assurance Review” led by James Stewart, the former chairman of infrastructure at KPMG, would “ensure lessons are learned to support action and to ensure that the costs for HS2 are brought under control”.

The review will look at “oversight of major transport infrastructure projects, including the effectiveness of forecasting and reporting of cost, schedule and benefits, as well as actions to deliver cost efficiencies”.

At the same time, the DfT said it would review the “incentives” of the main HS2 contractors “which could lead to some contracts being renegotiated or amended”.

Ms Reeves is poised to approve plans to build a new tunnel from Old Oak Common, in west London, to Euston to ensure HS2 has a central London terminus, with around £1bn due to be announced to dig the subterranean link. But it remains unclear how the wider Euston station redevelopment will be delivered, given a lack of interest from private developers.

Documents leaked to The Sunday Times criticised HS2’s biggest private-sector contractor, BBV, as “too large to effectively control”, and said that civil servants had “low confidence” in figures provided by the project.

HS2 Ltd was unable to clarify to the newspaper if the latest overspend on the scheme was £10bn or £20bn.

DfT’s statement that its focus will be on the line between Birmingham and London comes amid speculation that there could be some sort of extension north of Birmingham.

While there are no plans to build a high-speed rail line to Crewe, ministers are considering proposals to approve a slower, lower specification rail line to boost connectivity between Birmingham and Manchester.

The Government is meanwhile poised to give the go-ahead to plans to build a new tunnel from Old Oak Common to Euston to ensure HS2 has a central London terminus.

Ms Haigh said: “One of my first jobs as Transport Secretary has been to urgently review the position I have inherited on HS2.  

“It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming Transport Secretary I have seen up close the scale of failure in project delivery – and it’s dire.

“Taxpayers have a right to expect HS2 is delivered efficiently and I won’t stand for anything less.  

“I have promised to work fast and fix things and that’s exactly why I have announced urgent measures to get a grip on HS2’s costs and ensure taxpayers’ money is put to good use.  It’s high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again.”

BBV were contacted for comment.