High Speed Two: A Progress Update

Summary

National Audit Office have reported three times on the HS2 programme. Each of their previous reports highlighted significant cost and schedule pressures; the potential effect of any increases in these on the scope and benefits of the programme to passengers, communities, businesses and the economy; and areas of risk going forward.

This fourth report examines whether the Department and HS2 Ltd have protected value for money in their stewardship of the programme so far, and the risks to value for money going forward. The report assesses:

- the progress of the programme since we last reported in 2016;
- why the schedule is delayed and forecast costs have increased; and
- the risks that the Department and HS2 Ltd must manage.

Report conclusions

High Speed Two is an ambitious national programme, the construction of which will take decades. The Department, HS2 Ltd and government more widely underestimated the task, leading to optimistic estimates being used to set budgets and delivery dates. In not fully and openly recognising the programme’s risks from the outset, the Department and HS2 Ltd have not adequately managed the risks to value for money. If these risks had been recognised and managed earlier, then the significant activity in a pressured environment over the past year trying to understand and contain cost increases may not have been necessary. There are lessons to be learned from the experience of High Speed Two for other major infrastructure programmes.

The NAO welcome the increased realism on the estimated cost and schedule for the programme. However, significant risks remain. While the estimated cost and schedule for Phase One are now on a stronger footing, the challenge of getting Phase One into construction, and of monitoring and managing the programme as it progresses, is considerable. Phase Two is at a far earlier stage of development with many important decisions to be made before HS2 Ltd and the Department can improve cost and schedule estimates. Completing High Speed Two will require sustained focus and support from the Department and across government to ensure the programme is re‑established on a sound basis, balancing cost, time and benefits, and delivered in a way that achieves long-term value for money.

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