Decision to delay HS2’s London terminus will cost at least £200mn

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The budget for the London terminus of Britain’s new HS2 high-speed railway line was “unrealistic” from the beginning, and the government’s decision to delay constructing it will cost at least another £200mn, a report from a cross-party group of MPs warns.

The rebuilding of Euston station to accommodate high-speed trains has emerged as one of the biggest headaches for the HS2 programme. The project is designed to carry passengers from London to Birmingham and the north of England but has suffered delays and large cost overruns, which could exceed £70bn, up from £37.5bn in 2013.

In an effort to control ballooning costs, ministers announced plans earlier this year to halt, for an unspecified period, work at Euston and the final stretch of track, which will run in a 7.2km tunnel into central London. It also delayed construction of the section between Birmingham and Crewe for two years.

At the time, the government said the move would allow the project to be put on “a more realistic and stable footing”.

The report from the House of Commons public accounts committee, published on Friday, says the earlier budgets for Euston station had been “completely unrealistic”. The committee says that, at the time the decision was taken to pause work on the station, its estimated cost was £4.8bn. The original budget had been £2.6bn.

The MPs have found that the upfront costs of mothballing the rebuild work will cost the taxpayer an initial £200mn. But it adds that the government did “not know what the additional costs and impacts will be from its decision to pause construction.”

The government had not yet “reached a clear understanding” of the impact of inflation on the Euston rebuild, the report adds.

The committee has also found that, despite eight years planning the station, the government still had no agreed design and did “not know what it [was] trying to achieve.”

Ministers first scaled back plans for Euston in 2020, when it cut the number of HS2 platforms from 11 to 10. But a National Audit Office report earlier this year found that this revised plan was still £400mn more expensive than the original.

The PAC report warns that the effects on local people and businesses of the delay are also “unknown”. The HS2 construction sites at Euston — cleared by demolition in recent years — sit next to homes and business.

It adds that ministers had not learnt lessons from earlier troubled infrastructure projects, such as Crossrail, London’s long-delayed east-west underground railway now operating as the Elizabeth line.

Dame Meg Hillier, chair of the public accounts committee, said the project at Euston was “floundering,” adding: “The pause, ostensibly to save money, is not cost free . . . the government must now be clear what it is trying to achieve.”

The government said it remained “committed to delivering HS2 from Euston to Manchester in the most cost-effective way for taxpayers, which is why earlier this year we made the decision to rephase the construction of Euston to help balance the nation’s books and work on an affordable design for the station.”