Sunak’s cuts to HS2 cost taxpayer £2bn

Losses revealed for cancellation of ‘phase two’ of railway project between Birmingham and Manchester

Rishi Sunak’s decision to scale back HS2 cost the taxpayer more than £2bn, new documents have shown.
In the latest annual report for the high-speed railway, bosses have revealed the fees associated with cancelling “phase two” of the project between Birmingham and Manchester.
This includes a £1.1bn writedown for work already carried out on the northern leg, as well as an additional £1bn in accountancy charges.
A further £153m was also lost owing to design work for a 10-platform station at London Euston, as plans have since been downgraded to a six-platform terminus.
Another £95m of remediation work was also set aside for safeguarding building sites that are no longer required, taking the total tally lost to £2.17bn.
The cancellation of HS2’s second leg was announced by the former prime minister last October, when he said the project no longer made economic sense after years of delays and cost overruns.
At the time of Mr Sunak’s decision, the total costs associated with HS2 had swelled to more than £70bn.
Since coming to power on July 4, Labour has said it does not plan to reverse the previous government’s decisions regarding the railway project.
However, since Lord Hendy, a former chairman of Network Rail and an HS2 advocate, was appointed rail minister in July, there has been speculation that parts of the project may be revived.
A HS2 spokesman said: “In this case, losses relate entirely to work delivered on the northern phase of HS2, which was cancelled by the previous government, and the former design of the high-speed station at Euston.”
The company behind the project said the charges do not account for land and property purchased across now-cancelled sections of the route, which bosses said can be resold at a later date.
The Telegraph revealed earlier this week that HS2 continued buying houses on the northern leg even after the project was axed.
The impairments unveiled by the company relate solely to HS2, meaning that other entities may still derive benefit from some of the work concerned.
That could be, for example, another contractor taking forward work at the Euston terminus, or elements of the phase two stretch being used in a high-speed line across northern England.
HS2 said it is reshaping its business around remaining work on the London to Birmingham line, while adopting a more rigorous approach to costs and schedules.
Its latest annual report also revealed that Mark Thurston, former boss of the construction project, was paid £652,569 for his final year, including a £34,345 bonus.
He announced his departure from HS2 last year after spending six years as chief executive.
New boss Mark Wild is expected to arrive in the coming weeks, joining from SGN, the gas distribution network covering Scotland and the South East of England.
Mr Wild is best known for his role in charge of the Crossrail project from 2018 to 2022, where he helped to bring down costs before its completion.
With HS2 set to open between 2029 and 2033, final civil engineering work has begun ahead of the first track being laid.
That includes construction of a station at Old Oak Common in west London, which will serve as the line’s terminus in the capital until the revamped Euston gets the go-ahead.
Work has also begun at the new Curzon Street station in Birmingham.
The last major tunnel under London at Northolt is about half complete, while work on a tunnel on the outskirts of Birmingham has begun.
Meanwhile, boring work for a tunnel under the Chiltern Hills, which will be the line’s longest at 10 miles, was completed in March.