What next for High Speed 2?

HS2 has been mired in controversy for years as fierce arguments continue about spiralling costs and what will actually be built. Ben Jones considers the future of the project under a new Labour government.

In this article:

• UK high-speed rail costs are inflated by complex planning, environmental regulations, and extensive stakeholder consultations.
• Unlike Europe, the UK prioritizes expensive tunneling and route alterations to appease local opposition, driving up costs.
• Faster speeds and higher specifications in the UK significantly increase construction expenses compared to international projects.

Rachel Reeves’ Budget on October 30 at last delivered clarity - up to a point - on the future of High Speed 2’s London terminus at Euston.

The £6.5 billion tunnels and station will be built, allowing high-speed trains to reach central London from Old Oak Common.

That’s a relief for supporters of the beleaguered project and its contractors, but much uncertainty remains about the final scope of the Euston terminus, how many platforms it will have, who will pay for it, and whether it will ever deliver the benefits it once promised.

Less positively, Labour’s first budget in 14 years failed to revive the critically important Phase 2a between Handsacre Junction and Crewe, cancelled by Rishi Sunak in 2023.

However, the new government has also halted sales of land already acquired along the Phase 2a route, ending the widely criticised ‘fire sale’ instigated by its predecessor.

It’s not much, but it offers a faint glimmer of hope to those who recognise the value of the line in relieving West Coast Main Line congestion.

Also absent from the Budget was any additional support for the £12bn high-speed line between Liverpool and Manchester, which forms a key part of the proposed Northern Powerhouse Rail (NPR) scheme as well as contributing to the now-cancelled western section of HS2 Phase 2b to Manchester.

The final design of the Euston terminal is still in flux, despite almost £300 million already being spent on design fees.

The original plan for 11 platforms and up to 14 high-speed trains per hour has been scaled back to just six platforms with capacity for six to eight trains per hour serving Birmingham (3tph), Manchester (3tph) and Glasgow (1tph).

Independent rail consultant William Barter tells RAIL that not investing in the 11-platform layout will limit growth.

“Designing Euston so it is fit for potential growth in the future requires the full 11 platforms,” he says.

“Seven provides a minimal viable product, certainly for services to Birmingham and north-west England, but does nothing to solve potential services to the East Midlands or further services to Scotland.

“Unless we allow for that, HS2 will be forever limited to half its capacity.”

Without the extra platforms, future expansion of HS2 services to the East Midlands, Yorkshire and the North East of England, which would likely have been the biggest economic beneficiaries from faster and more frequent rail services, look extremely unlikely.

Meanwhile, passengers at the existing Euston station are forced to pick their way through an enormous building site to find their trains - a situation that could continue well into the 2030s.

With its first (and at the moment only) phase currently costed by the government at between £45bn and £54bn, HS2 holds the dubious honour of being the world‘s most expensive railway.

Phase 1 is more than £20bn over budget and construction costs could reach an extraordinary £200m per kilometre.

Even the opening of the line is uncertain, with HS2 Ltd offering a four-year window between 2029 and 2033 for the start of public services.

Only the equally troubled $128bn (£98.5bn) California High-Speed Rail (CAHSR) project in the USA comes close to matching HS2’s soaring costs, with some estimates suggesting that CAHSR could top out at ($200m (£154m) per mile.

For comparison, the Tours-Bordeaux TGV extension in France cost between £15.4m and £19.2m per kilometre in the mid-2010s, although much of that line runs through sparsely populated agricultural regions.

On average, European high-speed rail projects outside the UK cost around £32m per kilometre, although population density, land costs and topography can have a significant effect on costs.

It’s cheaper to build quickly and economically across the relatively empty expanses of France and Spain than the more crowded regions of north-west Europe or through difficult terrain in Italy or the Alps.

That said, China and Japan have succeeded in threading new high-speed railways through some of the world‘s most densely populated mega-cities for far less than it will cost Britain to build the 225km (140 miles) of track between London and Birmingham.

Chinese contractors managed to drive the Jakarta-Bandung ‘Whoosh’ high-speed line through some of Indonesia’s most difficult and densely populated terrain for around £38.5m per kilometre.

It’s depressingly common for major infrastructure projects to blow their budgets. But it’s not just railways - costs have exploded for other nationally significant infrastructure projects in the UK. For example, the price tag for Hinkley Point C nuclear power station has increased from £18bn to £33bn in recent years.

However, even firm supporters of HS2 have lost patience in recent years at the way the project has been managed.

In short, it has become an expensive mess that will likely never deliver many of the social and economic benefits it once promised.

So, how did we get here?

Political interference and chronic short-termism, the UK’s lack of long-term, integrated transport and industrial policies, slow and overly bureaucratic planning and environmental regimes, poor project management, and inadequate oversight by civil servants and government have all been blamed, along with the construction industry seeking to insulate itself from all of the above with contract bids that include staggering mitigation costs.

Since it was launched in 2012 with a projected overall cost of £33bn for almost 650km (400 miles) of new railway, HS2 has been led by five CEOs and seven chairmen and (in theory) overseen by six Prime Ministers, eight Chancellors and nine Transport Secretaries during a time of unprecedented political turmoil in the UK.

Numerous reports and audits have exposed management failures within the project - including the absence of a detailed schedule and costings, the time required to agree detailed technical designs, frequent design changes, and inadequate oversight from HS2 Ltd and the government.

In October, The Times called HS2 “a story of prolonged dysfunction”.

It thundered: “The gradual stunting of HS2 represents egregious short-termism but also an object lesson in why Britain struggles to escape its doom loop of anaemic growth.

“The project has become emblematic of Britain’s inability to complete big infrastructure projects.”

RAIL columnist, author and long-time HS2 sceptic Christian Wolmar agrees: “There are a number of reasons for the fact that costs are far in excess of those for high-speed lines built in mainland Europe. While some are a result of flaws in the original design, others are the result of poor project management.

“A number of mistakes were made at the outset, including the decision to build the line for 400kph (250mph) operation - 100kph faster than the international norm.

“One supporter of HS2 reported that for each extra mile-per-hour of speed, the cost of the project increased by £1bn. There was also a lack of discussion over the chosen route, which could have followed existing motorway corridors.

“Management of the project has been poor throughout, with no one bearing down on costs and apparently no one responsible for working within a budget, all compounded by a lack of transparency.

“This lack of accountability is a particularly scandalous aspect of the scheme.”

Rapidly rising construction costs have plagued major projects across the world in recent years. But even before the COVID-19 pandemic, Russia’s invasion of Ukraine in 2022, and the surge in inflation that followed those global events, HS2‘s costs and lack of transparency were starting to alarm many observers.

Speaking in 2022, Ricardo Ferreras, director of Spanish construction giant Ferrovial, blamed the process of obtaining permits and conducting environmental studies for the increased cost of major infrastructure projects such as new railways.

“It’s true the cost per kilometre is way higher in the UK than it is in Europe - for example, in France or Spain,” Ferreras said.

“It is about the number of resources that we use here in the UK that are linked with planning - the environmental matters, the stakeholder engagement, all the consents that are needed.

“As an example, in Spain, the government will get all consents and all environmental permits, and then when they award the contract, the contractor can just focus on delivering the project.”

Wolmar adds: “The cost of HS2 should be placed in a wider context. As a comparison with more successful schemes elsewhere, Spain has built a network of 2,600 miles at an overall cost of £50bn - less than the expected cost of the 225km Old Oak Common to Birmingham line.

“There are mitigating factors such as the relative cost of land and the lack of opposition in other countries, but regardless, a variance of ten or 20 times is remarkable.”

Successive UK governments sold the project to voters as a chance to ‘level up’ deprived post-industrial cities across central and northern regions through investment in improved infrastructure to create ‘northern powerhouses’, although this argument is disputed by critics.

Wolmar continues: “Studies of the impact of high-speed lines in other countries have shown that invariably linking a prosperous city with a weaker one benefits the former, actually adding to the inequality between regions.

“That’s because there is no longer the need for firms to have offices in locations that can easily be reached in an hour or so from the major city. Therefore, HS2 is likely to benefit London more than the provincial cities it serves.”

As a result of such differences in opinion, HS2 was always controversial, raising objections from communities disrupted by its construction, environmentalists trying to save ancient woodland lying in its path and others who argued that it is a steep price to pay for marginally faster travel.

The latter argument ignores HS2’s enormous benefits in freeing up capacity on the existing British rail network for more freight and regional passenger trains.

Massive additional costs were generated in an effort to soothe angry residents - known as ‘nimbys’ (short for ‘not in my back yard’) - along the route.

Opposition was especially fierce north of London. Wealthy retirees living in the Chilterns found themselves in a surprising coalition with radical environmental campaigners from the likes of Extinction Rebellion, as they attempted to halt the project. However, their efforts were in vain and only succeeded in significantly driving up construction costs.

One of the more extreme examples of HS2 Ltd’s efforts to appease objectors is the £100m ‘bat shed’ at Sheephouse Wood in Buckinghamshire (RAIL 1023).

The 0.6-mile concrete structure is one of 8,276 planning consents the company has been forced to secure along the route. It was demanded by Natural England to protect bats from passing trains, although according to HS2 Ltd Chairman Sir Jon Thompson there is no evidence that high-speed trains interfere with bats.

Many miles of extra tunnels and expensive earthworks have been added to make the railway ‘disappear’, adding billions to the price tag for additional planning and approvals work, design changes and higher construction costs.

Where other countries build their new railways largely at ground level or elevated on seemingly endless concrete viaducts, Britain has chosen a far more expensive route requiring 50km (32 miles) of tunnels and 130 bridges, including the UK’s longest viaduct.

On average, it costs ten times per mile of track more to build in tunnel than above ground.

Indeed, putting the arguments aside for a moment, HS2 will feature some stunning civil engineering achievements.

The Colne Valley Viaduct taking the railway out of north-west London stretches for more than 3.4km (two miles) over a series of lakes and waterways.

Major new stations at Euston (whatever form it eventually takes), Old Oak Common, Birmingham Airport and Birmingham Curzon Street will be modern-day ‘cathedrals of transport’, inspired by Britain’s magnificent Victorian-era terminals.

A ’gold-plated’ specification means that the tracks will be suitable for the fastest regular trains in the world when they eventually start running in the 2030s, while the concrete-slab track systems will require much less maintenance than traditional ballasted lines, and equipment such as tunnel-ventilation shafts will be cleverly disguised to blend in with their surroundings.

All of this has contributed to HS2’s higher-than-average construction costs.

Above ground, HS2 Ltd and its contractors have gone to enormous lengths to mitigate their impact on the environment along the route, tweaking the route to limit damage to woodlands and areas of outstanding natural beauty (AONBs), planting millions of new trees and funding environmental and community projects worth millions of pounds, from rewilding schemes to school playground renovations.

Even the hugely controversial decision to scrap all HS2 lines north of Birmingham, made by Rishi Sunak in October 2023, added more than £2bn to the bill in write-offs and accounting costs for work already undertaken.

That move was touted by Sunak as saving £36bn to be redirected to other transport projects across the country, although in reality little of that funding has been forthcoming.

Wolmar adds: “With no clear budget and with the now extended timeline for Phase 1, which still has no clear opening date, it is impossible to obtain any accurate assessment of final costs.

“With rail passenger levels only just returning to pre-COVID levels and the nation’s coffers almost empty, the country is left with a ludicrously expensive venture that, in its current mutilated form, is essentially pointless.”

However, the High-Speed Rail Group (HSRG), an industry coalition comprising HS2 construction contractors, train builders and operators, claims that reinstating Phase 2a (cancelled in October 2023) could actually save the government money by increasing the value of future operating concessions.

These could be worth around £20bn if fully developed from central London and joining lines to northern cities. Phase 1 alone would be worth just a quarter of that, according to HSRG’s analysis.

It argues that spending billions more now to reach Euston and Crewe would save HM Treasury £3.5bn in the long run.

Immediately after the October 30 budget, an HSRG spokesperson said: “Rail investment is far more than a short-term cost - it is a driver of national growth and regional connectivity.

“We hope that an era of fragmented, short-term decision-making has been ended in favour of a move towards a cohesive vision for the future of UK rail.

“However, we cannot stop here. To fully realise the socio-economic benefits of this project, it is critical that Phase 1 is properly connected north of Birmingham to Crewe and beyond.

“Taking a long-term, integrated approach to rail delivery going forward will enable HS2 and the broader network to fuel the UK’s economy and enhance productivity for generations to come. For the first time in some years, this Budget sees that future get one step nearer rather than further away.”

After taking over as Transport Secretary, the now-departed Louise Haigh promised to “get a grip of HS2”.

On October 20, she said: “It has long been clear that the costs have been allowed to spiral out of control, but since becoming Transport Secretary I have seen up close the scale of failure in project delivery - and it’s dire. It’s high time we make sure lessons are learnt and the mistakes of HS2 are never repeated.”

The result is a Major Transport Projects Governance and Assurance Review, led by senior infrastructure delivery adviser James Stewart. Its recommendations will be made to the government in late 2024 or early 2025.

The review will investigate the oversight of major transport infrastructure projects, including the effectiveness of forecasting and reporting of cost, schedule and benefits, as well as actions to deliver cost efficiencies.

It will primarily draw on experiences of HS2 to date, to ensure recommendations are applied to both its delivery and future projects.

Separately, the incentives of the main HS2 contractors are also being reviewed, which could lead to some contracts being renegotiated or amended.

With so much work already under way on Phase 1, it remains to be seen how much difference the review can make to the overall costs and culture of HS2.

Will we ever see a time when the deeply entrenched pro- and anti-HS2 arguments mellow?

The Channel Tunnel and Crossrail, among others, provide ample evidence that hostility to even the costliest, most disruptive projects quickly fades away when they deliver - or exceed - their promises after completion.

We’re still a long way from that day. But if Labour somehow manages to ‘get a grip’ of the project over the next couple of years, it could provide a more receptive environment for the reinstatement of Phase 2a to Crewe.

That would be warmly welcomed by politicians and business leaders across the north of England, especially if it is combined with progress on Northern Powerhouse Rail. And it would spread the benefits of HS2 more widely.

October 30’s Budget was a small step in the right direction for British high-speed rail, putting an end to a demoralising series of cutbacks.

However, much more work is needed to restore faith in the project and create the conditions for further growth, to help Britain’s rail network and HS2 deliver better, faster and more efficient services into the second half of the 21st century.