THE government has admitted that HS2 will cost a lot more than the official budget of £55.7 billion for all phases, which ministers were still promising was correct only a few weeks ago.
In a written statement to Parliament, transport secretary Grant Shapps has also said the project will take longer to complete, with high speed trains possibly not reaching Manchester or Leeds before 2040.
The revelation has justified reports in recent weeks that the budget was not going to be enough, and that the government knew as long ago as 2016 that costs were starting to exceed official estimates.
Grant Shapps told MPs: 'The chairman of HS2 [Allan Cook] does not believe that the current scheme design can be delivered within the budget of £55.7 billion, set in 2015 prices. Instead he estimates that the current scheme requires a total budget -- including contingency -- in the range of £72 to £78 billion, again in 2015 prices.
'Regarding schedule, the Chairman does not believe the current schedule of 2026 for initial services on Phase One is realistic. In line with lessons from other major transport infrastructure projects, his advice proposes a range of dates for the start of service. He recommends 2028 to 2031 for Phase One -- with a staged opening, starting with initial services between London Old Oak Common and Birmingham Curzon Street, followed by services to and from London Euston later. He expects Phase 2b, the full high-speed line to Manchester and Leeds, to open between 2035 and 2040.
'He has also suggested that Phase 2a, West Midlands to Crewe, could be delivered to the same timetable as Phase 1, subject to Parliamentary approval. Finally, he is of the view that the benefits of the current scheme are substantially undervalued.'
At the same time the government has published a 'stocktake' of the project from chairman Allan Cook, which says that 'The original plans did not take sufficient account of the compound effect of building a high-speed line through a more densely populated country with more difficult topography than elsewhere – and doing so whilst complying with higher environmental standards.
'Equally, the existing cost/benefit model, which was designed for smaller scale schemes, has proved inadequate in capturing the full transformational effect of HS2, particularly on changing land values.'
The Prime Minister launched an official review of the scheme on 21 August, led by former HS2 chairman Douglas Oakervee and frequent HS2 critic Lord Berkeley. This will recommend later this year 'whether and how HS2 should proceed'.
Labour’s shadow transport secretary Andy McDonald said: 'Successive Conservative transport ministers have shown themselves to be utterly incompetent and unable to oversee the finances and governance of HS2, among other infrastructure projects.
'This government has misled both Parliament and the public about the cost of HS2. People need to have confidence in the project, so this delay is bad news for the UK transport system as a whole and the north of England in particular.'
Liberal Democrat MEP for the North West Jane Brophy said: 'The Tories’ long-term indecision and incompetence was always going to cost taxpayers and fail Northerners the most.
'The Liberal Democrats have always been absolutely clear that HS2 construction should have started in the North.'
The Taxpayers' Alliance has consistently opposed the scheme. TA spokesman Harry Fone said: 'This is a welcome case of government coming clean with taxpayers about the true costs of the hated HS2.
'The problems facing the project are an open secret, with massive overruns and official estimates drifting ever upwards, towards our original estimate of around £90 billion. Overpaid middle management have been unable to keep costs under control, and a bloated PR budget has not helped HS2 Ltd cover their tracks.
'As sceptics have suspected all along, HS2 is dangerously close to coming off the rails. The recent review must now ask difficult questions about whether to throw good money after bad and press ahead or not.'
However, the Railway Industry Association insisted that HS2 is still 'vital'.
Chief executive Darren Caplan said: 'Despite today’s news that HS2 Phase 1 may not be completed until 2028/31 and the update on costs, it is important to remember the project remains vital for the UK, its economy, cities and regional communities, and as shown by chairman Alan Cook's Stocktake, the benefits have been substantially undervalued. It will still more than pay for itself.'