HS2: MPs raise fresh concerns over handling of 'badly off course' rail project

17 May 2020, 09:47

An HS2 sign near the village of South Heath in Buckinghamshire
An HS2 sign near the village of South Heath in Buckinghamshire. Picture: PA

By Megan White

MPs have raised fresh concerns over the handling of HS2, claiming bosses have been "blindsided by contact with reality" with the project "badly off course.”

A report published by Westminster's Public Accounts Committee (PAC) said that the Department for Transport (DfT) and HS2 Ltd's lack of transparency had "undermined public confidence in the programme".

The Government has now been urged to give "regular, accurate and open updates" on problems faced by the project.

It also stated that the appearance of DfT Permanent Secretary Bernadette Kelly and HS2 Ltd executives, CEO Mark Thurston and chief financial officer Michael Bradley, before the Committee in March also "raised questions about the previous picture provided by the witnesses of the project's health".

The report read: "The Department and HS2 Ltd were aware of the scale of the issues facing the programme as early as October 2018.

"In March 2019, HS2 Ltd formally notified the Department that it could not deliver Phase One to budget and schedule.

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"Despite being aware of these issues, the Permanent Secretary withheld from us that the programme was in significant difficulty when she appeared before the previous Committee in October 2018 and May 2019, even in response to specific questions about the programme's delivery timeline and budget.

"HS2 Ltd's annual report and accounts for the year ending March 31 2019 similarly failed to give an accurate account of the programme's problems.

"The Department and HS2 Ltd defended their actions, stating that there were commercial sensitivities, and that options were still being pursued to remedy the situation."

It added: "While we recognise that ministers had not yet decided how to proceed, no adequate excuse was provided for not disclosing to this Committee and Parliament the risk and uncertainty the programme was facing.

"We are disappointed by the Permanent Secretary's response to our concerns about her failure to explicitly inform the Committee of the programme's delays and overspend when asked about the general health of the project."

Committee chair, Labour MP Meg Hillier, accused the Government of having made a "wealth of mistakes" over major transport infrastructure.

She said: "There is no excuse for hiding the nature and extent of the problems the project was facing from Parliament and the taxpayer.

"The Department and HS2 appear to have been blindsided by contact with reality - when Phase One started moving through Parliament, the predicted costs of necessary commitments to the communities affected have exploded from £245 million to £1.2 billion.

"The Government unfortunately has a wealth of mistakes on major transport infrastructure to learn from, but it does not give confidence that it is finally going to take those lessons when this is its approach."

She added: "In the six-monthly reports the Department has now agreed to give us, we want to see an honest, open account, and evidence of learning from past mistakes being applied to bring this project under control, to deliver it within the timeline and budget that have been agreed in justifying the project."

The Committee's deputy chair, Conservative MP Sir Geoffrey Clifton-Brown, said that the PAC was "in the dark" about serious cost overruns.

He said: "This PAC report on HS2 is one of the most critical, in both the transparency of Government and the handling of a project, that I have seen in my nine years in total on the committee.

"The Permanent Secretary appeared before the committee in October 2018 and again in May 2019. In March 2019, HS2 Ltd formally told the Department it had breached the terms of the Development Agreement, and would be unable to deliver the programme to cost and schedule - yet the Permanent Secretary did not inform the committee on either appearance that the programme was in trouble.

"This is a serious breach of the department's duty to Parliament and hence to the public, which as the report says, will undermine confidence. Furthermore, the PAC was in the dark about serious cost overruns and was therefore unable to do its duty to inform Parliament that value for money on the project was at risk.

"The cost overruns have been blamed partly on the speed that the hybrid Bill committee for Phase One proceeded with. I was a member of that committee, which lasted for 20 months: this is complete nonsense."

Responding to the report, a DfT spokesperson said: "The current Secretary of State has been clear that this project must go forward with a new approach to Parliamentary reporting, with clear transparency, strengthened accountability to ministers, and tight control of costs.

"We have comprehensively reset the HS2 programme, introducing a revised budget and funding regime, with significant reforms to ensure the project is delivered in a more disciplined and transparent manner.

"This includes appointing the first dedicated HS2 minister, bi-annual updates to Parliament and establishing a monthly ministerial task force, chaired by the Secretary of State, to ensure the project has a rigorous scrutiny like the 2012 Olympics.

"The Permanent Secretary acknowledged in May 2019 that there were cost pressures that the Department and HS2 Ltd were working to address in line with government policy at the time. Those discussions were active and commercially confidential."