HS2: The inside story of why the project went off the rails

The absence of a guiding mind, a single accountable individual in Westminster or Whitehall taking ownership of HS2, led to runaway costs and ultimately the cancellation of the second leg of the high-speed railway project north of ­Birmingham to Manchester.
That is a key conclusion of a report by the Institution of Civil Engineers into one of the great national debacles of recent times, which says that the lack of ­a multi-decade commitment to such a large-scale infrastructure scheme left HS2 open to cancellation by a prime minister able to overturn predecessors’ decisions without recourse to parliament.
It is now almost a year since Rishi Sunak stood in a hotel room in Manchester, the city with the most to gain from HS2, and announced that the next phase would not merely be put on hold but cancelled with a commitment to divert money to fixing potholes.
Today the vision of a modern, high-speed connection with 36 trains an hour running at 250mph has been reduced to a service between Acton in west London and Aston in the Midlands. And even that may not open for another decade.
One year on from the cancellation, the institution says Britain needs a legally binding national transport strategy or masterplan that overrides the political cycle and sees big schemes through to completion.
It rejects accusations from politicians that the construction industry was guilty for the cost overruns, finding that HS2 was initially poorly specified because of the need to get the project under way before public support drained away; and then over-specified by a demand for unprecedented frequencies and speed on a “world-class railway fit for the next 200 years”.
The report, The Cancellation of HS2’s Northern Leg — Learning Lessons, concludes: “The lack of a well-embedded strategic story for HS2 meant that a significant cohort of the public was indifferent to the project. It did not take much for them to become detractors.”
From its inception, the point of HS2 to many was never entirely clear. It was agreed that even after the upgrade of the west coast main line, new rail capacity would be needed, not least to allow more rail freight and to take lorries off the road. The logic was that if you were to build a new line, you may as well build best-in-class and therefore high-speed. The subsequent decade of debate over what high-speed should mean and the calculations over economic benefits to different regions obscured the simple case of the need for north-south relief capacity.
One of the fundamental problems of HS2 was identifying who was in charge. Was it the chairman or the chief executive of HS2? The transport secretary or the departmental permanent secretary? The chancellor or the prime minister? The report finds that no one position nor government agency had “ownership” for the duration of the project.
“Frequent political changes resulted in many changes in the political case for HS2, as well as the depth of political buy-in from those accountable for the political outcomes of the project,” the authors say.
“HS2 had to navigate six prime ministers, eight chancellors and nine secretaries of state for transport. All of these senior decision-makers will have had different ideas of why HS2 was important. Over time, this meant decisions were no longer aligned to any central purpose and the narrative over the need for HS2 was constantly shifting [and] reduced the institutional memory of previous decisions.”
No one, not even the Treasury, knows yet how much the first phase of HS2 will end up costing and what the extensions to Manchester and to Leeds might have cost. The estimates, though, have been these.
In 2010, HS2 London to Birmingham was reckoned to cost £17 billion, plus £3 billion for the trains, and the extensions to Manchester and Leeds a further £30 billion.
By 2013, London to Manchester was at £50 billion, including the trains. By the time of the Oakervee Review in 2020, the entire Y-shaped network was estimated to cost £98 billion. When the planned Leeds extension was scrapped, the estimate to get to Manchester stood at £71 billion.
When the Conservatives came to power in 2010, support for HS2 was, for many MPs, a trade-off and alternative to building a third runway at Heathrow. But backing HS2 came with protests from local communities affected along the proposed route and the financial cost of agreeing to more and longer tunnels escalated.
Having backed it, the report argues, HS2 had to be mobilised quickly to prevent support draining away. The rush to get moving not only accounts for the low 2010 estimates but also the unaccounted-for costs that would build up as a result.
MPs ended up supporting legislation based on “unrealistic budgets” and when the design stage was at “level 0” no one involved at a senior level allowed for further costly route revisions.
“Fundamental questions were not answered early on,” the report says. “The pace of delivery continued to be prioritised over design maturity. Design was still being developed while contractors were already doing early groundwork.”
The great criticism was that HS2 became over-engineered. The report rejects this, stating that the over-specification came from Whitehall. “The initial study recommended a preference for world-class design and designing a railway for ‘the next 200 years’.”
The specification was for 18 trains in each direction at 250mph. That has never been delivered anywhere else in the world and would require 99 per cent reliability and unprecedented road-based emergency and maintenance track access provision. Building to higher standards with the best materials came at a cost.
The legislation was meant to override local planning authorities. In the event, the number of planning consents and volume of challenges was far higher than ever expected, even from the government’s own Environment Agency, racking up legal fees and inevitable construction delay costs.
Having seven individual contracts along the line, later consolidated into four joint ventures, was meant to avoid unsustainable risk bearing down on a single contractor. In the event, it meant there was no one “guiding mind” along the length of the project, no standardisation that would bring efficiencies or economies of scale, no checks and balances that would reduce cost. The need to get on with it reduced the amount of feasibility testing. In the end, what ended up getting built was a case of contractors meeting the price rather than a calculation of what the asset should have cost.
Perhaps nobody could have foreseen the impacts of Brexit, Covid and the Russia-Ukraine war on rising labour, material and energy costs. Yet the report finds that “there was a ‘head in the sand’ mentality. The government did not account properly for inflation. This contributed to the public and political outcry on costs. Nobody wanted ownership of the cost difference.”
The report’s conclusion is that a project of the magnitude of HS2 in both scale and time needs continuous coherent leadership, an identifiable sponsor and “owner” of the project for the duration and, baked into that, that a politician from a later generation cannot, without legal or legislative challenge, overturn the decisions made by their predecessors.
“It is not possible to separate politics from major infrastructure projects, but delivering those projects requires commitment over multiple political cycles,” it concludes. “It is true that HS2 coincided with a period of unprecedented political upheaval in the UK. However, the experience shows the need for governments to think long term. Getting this right is vital for the UK.”