Spending watchdog demands greater HS2 scrutiny

The powerful public accounts committee slams the Department for Transport and HS2 for lack of transparency, warning it has undermined public confidence in the programme.

The critical report highlights serious concerns about the early failure to report that the project had gone badly off-course as the budget soared from £56bn to £88bn.

Committee MPs also said they were concerned that several years into the programme, huge uncertainty remained with the design and delivery of Euston station.

The report calls for DfT within six months to set out its plan for Euston, including how it will be delivered and how it will ensure effective working between all stakeholders.

They also questioned whether DfT and HS2 Ltd had the skills and capability they need now or in the future.

“A lack of capability continues to be an issue; HS2 Ltd recently assessed that while it had improved its capabilities in most areas, it still has gaps in key areas such as risk management and assurance, project management and project controls.

“Now that it is bearing more of the risk of cost increases, HS2 Ltd also needs to ensure that it has the right commercial skills to manage its revised contractual arrangements with its main construction contractors,” says the report.

In its recommendations to Government, the Committee is seeking new, formal assurances that DfT and HS2 Ltd have the capability to manage the programme and its supply chain, into construction and through to completion.

Committee chair Meg Hillier MP said: “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.”

Committee’s Deputy Chair Sir Geoffrey Clifton-Brown MP 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.”

updated: 18/05/2020