HS2: Costs review ‘ongoing’ amid reported £30bn overrun

The government has insisted that a review of the cost of a new high-speed railway linking London, Birmingham, Manchester and Leeds is continuing.

The assurances come despite the project reportedly needing an extra £30bn.

HS2 chairman Allan Cook has written to the Department for Transport to warn that the project will exceed the official £56bn budget, the Financial Times reported.

The newspaper cited an internal review for the figure.

“The chairman of HS2 Ltd is conducting detailed work into of the costs and schedule of the project to ensure it delivers benefits to passengers, the economy and represents value for money for the taxpayer,” the Department for Transport said in a statement.

“This work is ongoing. We expect Allan Cook to provide his final assessment in due course.”

An HS2 Ltd spokesperson said: “We don’t comment on leaks or speculation. We have previously noted that our chair, as you would expect, continues to scrutinise the programme, and regularly reports back to the Department.

“We are determined to deliver a railway that rebalances the economy, creates jobs, boosts economic growth and is value for money for taxpayers.”

‘No smoke without fire’

Analysis by Tom Burridge, BBC transport correspondent

There’s been no denial that this letter was sent by the Chairman of HS2 to the top civil servant at the Department for Transport.

And none of my contacts have rubbished the “potential £30bn overspend” idea outright.

Sources at HS2 and at the DfT insist Allan Cook’s review is ongoing and that he hasn’t settled on a final figure.

That may be true, but there has been a subtle shift of tone in recent months from both HS2 and the government; a creeping acceptance that the project, in its current form, is increasingly unlikely to come in within its £56bn budget.

And there has already been plenty of evidence suggesting that the project’s original estimates of how much it would cost to purchase land and property along the route were significantly below the true values.

This leak, which feels at the very least like a case of ‘no smoke without fire’, comes at a very sensitive time.

Transport Secretary Chris Grayling, who has repeatedly insisted that the project HAS to be delivered within budget, is possibly leaving his post in a matter of days.

Boris Johnson is by no means a die-hard fan of the scheme.

And he has already nominated a former HS2 executive, Douglas Oakervee, to carry out a separate review of the project, if he becomes prime minister next week.

£56bn was already a hefty sum.

As a former senior official at the Treasury puts it: “in terms of value for money it [HS2] scores lower than lots of other projects.”

And the government “is taking quite a big risk” by putting so much money into high-speed rail, the source told me.

That risk looks set to rise.