HS2 has revealed greater than £2bn in prices related to Rishi Sunak’s determination to downgrade the high-speed rail line.
The UK’s largest infrastructure undertaking introduced it had written off £1.1bn in prices incurred throughout “phase two,” which was meant to attach Birmingham to Manchester till the federal government scrapped it final yr.
In its annual report, HS2 Ltd disclosed an additional £1bn in accounting prices associated to the undertaking’s diminished ambitions, which is able to decrease its anticipated future revenue. General, the enterprise reported £2.17bn in one-off prices because of the railway’s scale-back.
Sunak cancelled the second leg of the HS2 undertaking and scaled again plans for London Euston station in October final yr throughout the Conservative celebration convention in Manchester. This determination, considered as a political misstep, brought about dismay in Manchester, a metropolis that was set to profit from the brand new fast hyperlink.
The HS2 undertaking had confronted lengthy delays and rising prices, inflicting its estimated price ticket to balloon to £71bn. The federal government claimed it could save £36bn by scrapping a part of the road, with Sunak pledging to reinvest in different rail initiatives, together with Community North, to enhance hyperlinks between northern cities.
Initially deliberate as a Y-shaped line linking London with Manchester and Yorkshire, HS2 has been progressively scaled again. Boris Johnson’s authorities cancelled plans for HS2 to achieve Leeds in November 2021. The choice to terminate HS2 in Birmingham has been met with anger in areas that have been poised to profit. Labour has said it could not reverse the choice, with Keir Starmer acknowledging in January that it was “not possible.”
The federal government’s spending watchdog lately famous that the choice to axe HS2’s second leg is more likely to imply increased fares on the west coast mainline from London to Manchester to discourage practice journey. HS2 was meant to alleviate capability on the road, however the Nationwide Audit Workplace warned there might be 17% fewer seats on trains between Birmingham and Manchester because of the determination to cease the road within the Midlands.
HS2 attributed £850m of asset write-downs to the cancellation of the Birmingham to Manchester route, which means the corporate is “no longer expected to gain an economic benefit from the preparatory work required to build these phases.” This determine doesn’t embody the price of buying land and property, which the corporate hopes to promote later.
The corporate additionally reported a lack of £1.07bn from the cancelled part two leg, together with design, preparation of laws, enabling works, and environmental initiatives. A further £95m in prices will come up from winding down the undertaking, similar to “remediation” and guaranteeing protected work stoppage.
In idea, some taxpayer prices might be recouped by redirecting funds to different areas of the rail community, or if a future non-public or public physique revives the Birmingham to Manchester line or the unique bigger plan for Euston station.
The annual report additionally disclosed that HS2’s former chief govt, Mark Thurston, was paid £652,569 for his remaining yr, together with a £34,345 bonus. Thurston resigned in 2023 after six years. On the time, HS2 was nonetheless anticipated to increase to Crewe and Manchester.
A spokesperson for HS2 said: “We are required to declare spending on the project that HS2 Ltd is no longer expected to gain any economic benefit from. In this case, losses relate entirely to work delivered on the northern phase of HS2, which was cancelled by the previous government, and the former design of the high-speed station at Euston.”
Shadow transport minister Helen Whately commented: “Cancelling the second leg of HS2 was a difficult decision, but it was the right one. The £36bn saved will make more of a difference as road and rail improvements for communities up and down the country. Or at least would have done, because Labour have now thrown the entire transport pipeline into chaos. Vital transport upgrades look like they’ll be collateral in their mission to trash our legacy.”
The Division for Transport has been approached for remark.
