Construction of HS2 north of Birmingham to Crewe is to be delayed by two years, in a bid to contain the costs of the project.
Transport secretary Mark Harper said £40 billion will be invested in ‘transformational’ transport schemes over the next two financial years around the country, which would help to ‘level up’ local communities and fulfill one of the Government’s five priorities to enlarge the economy.
He added that this includes continued investment in HS2 from London Euston to Manchester. However, ‘in recognition of inflationary pressures and to help balance the nation’s books, the next two years will be used to rephase construction and optimise future delivery of Phase 2a between Birmingham and Crewe so this is done in the most cost-effective way’.
He continued: ‘The Government will take the time to ensure an affordable and deliverable design at Euston, with a view to delivering the station alongside high-speed infrastructure to Manchester, while the High Speed Rail (Crewe-Manchester) Bill continues through Parliament.’
Before Mr Harper made his announcement, there had been speculation that he could have been set to announce changes to Phase 1, between Old Oak Common and Birmingham, but construction on this section will continue.
Transport for the North reacted by calling for the complete London to Manchester scheme to go ahead. Its chairman, the former transport secretary Lord McLoughlin, said: ‘This is a disappointing announcement. But I was reassured by the transport secretary that we are still getting HS2 to Manchester, and the recommitment to NPR [Northern Powerhouse Rail] is welcome.
‘However, it needs to be understood whether or not these cost savings can be realised while still achieving the same desired outcome and conditional outputs. The government needs to avoid being penny wise and pound foolish, as delays don’t necessarily lead to savings, and in fact can drive costs upwards.
‘Nevertheless, the political leaders of the North who sit on our Board have made their collective position very clear – we must transform the North by building both HS2 and NPR in full.’
The Railway Industry Association, which represents hundreds of companies in the supply chain, warned that delaying the Birmingham-Crewe section could be an ‘inefficient use of taxpayers’ money.’
RIA chief executive Darren Caplan said: ‘Chancellor Jeremy Hunt announced just last November that he was committed to delivering HS2. This was welcome news following the scrapping of both the Eastern Leg from Leeds to Birmingham, and the cancellation of the Golborne Link, to enable high speed trains to get from the Northern Leg of HS2 to Scotland.
‘So it is clearly disappointing to hear of this delay, which seems to prioritise short-termism over a structured, long-term strategy for what is Europe’s biggest infrastructure project. The delay postpones the immense benefits the project is set to deliver for the country, including extra capacity, more economic growth, improved connectivity – driving levelling up – and hundreds of thousands of jobs specifically in the Midlands and the North, and also to other parts of the UK more widely.
‘This stop-start approach to a project is an inefficient use of taxpayers’ money, and could ultimately drive the project's costs up, which is the opposite of what the Government is trying to do. We strongly urge the Government to push on with delivering the full HS2 scheme, including the Eastern Leg and the Golborne Link, or its replacement, as soon as possible.’
The Labour Party was also critical. Shadow transport secretary Louise Haigh said: ‘Tens of thousands of jobs, and billions in economic growth are dependent on this project. The North is yet again being asked to pay the price for staggering Conservative failure. Conservative chaos and chronic indecision is holding back jobs, growth and costing the taxpayer. This is the biggest project in Europe and delays pile costs up in the long-run. Ministers now need to come clean on precisely how much their indecision will cost taxpayers and the North.’
The private operators’ lobbying organisation Rail Partners echoed the cost concerns voiced by other critics. Chief executive Andy Bagnall said: ‘While inflationary pressures make infrastructure projects more challenging, it is critical for Britain's economy and meeting net zero targets that large sections of HS2 are not delayed which will ultimately increase the overall cost.’