HS2 slammed for poor decisions and contract legacy
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The UK Government is preparing to revise construction contracts for HS2 as ministers step in to take control of the project amid rising costs. Transport Secretary Louise Haigh announced that she is “reinstating ministerial oversight of the project to ensure greater accountability.”
Haigh also stated that the incentives of the main HS2 contractors are under review, which could result in the renegotiation or amendment of some contracts.
“It has been clear for some time that HS2’s costs have spiralled out of control,” Haigh said. “Since becoming Transport Secretary, I have seen firsthand the extent of failure in delivering this project – and it’s severe. Taxpayers deserve efficiency, and I will accept nothing less.”
Haigh emphasized that urgent action is being taken to address the escalating costs and ensure taxpayers’ money is used wisely. “I have promised to work quickly to fix these issues, and we are implementing measures to bring HS2’s budget under control and prevent these mistakes from happening again.”
Regular meetings will begin immediately, where Haigh, Rail Minister Lord Hendy, and the Chief Secretary to the Treasury will closely monitor the project, which could see its budget reach £66bn. The government acknowledged that the cost of Phase One has surged due to poor project management, inflation, and underperformance from the supply chain, with little clarity on how to stay within budget.
A broader review of how major infrastructure projects are managed has also been commissioned. This review will primarily focus on lessons learned from HS2 to improve its delivery and inform future projects.
Additionally, HS2 Ltd will soon be under the leadership of a new Chief Executive, Mark Wild, who previously led the Crossrail project. Haigh tasked Wild with assessing HS2’s current costs, schedule, and culture, and delivering an action plan to complete the remaining work within a realistic budget and timeframe.
