HS2 protests and Covid pandemic contribute to £800m fresh ‘cost pressures’, says minister

Anti-HS2 protests and the coronavirus pandemic have contributed to the project facing new “cost pressures” of £800 million, the Government has announced.

It took an expensive month-long operation to remove activists from a network of tunnels discovered on January 26 in London’s Euston Square Gardens.

The virus crisis has also had a financial impact on the high-speed rail scheme due to access delays and reduced productivity.

In a statement to Parliament, HS2 minister Andrew Stephenson explained that half of the £800 million of “potential cost pressures” is due to difficulties related to the redevelopment of London Euston station.

The remainder is a result of protester action, the Covid-19 pandemic and delays in approving designs and obtaining planning consents.

Mr Stephenson explained that the £800 million can be covered by contingency funds contained within the £44.6 billion budget (in 2019 prices) for Phase One between London and Birmingham agreed last year.

Separately, HS2 Ltd has also drawn £400 million of contingency funds.

Around £11.0 billion (in actual prices) has already been spent on the project, including through land and property acquisition.

In addition, contracts have been signed totalling £12.6 billion (in 2019 prices).

Mr Stephenson said “schedule pressures”, partly due to the pandemic, mean HS2 Ltd is carrying out a “re-planning exercise” due to be completed in the spring.

He claimed this “will not impact the projected delivery into service date range of 2029-2033” set out last year, but warned “further cost pressures could still emerge if mitigation activity is required”.

A Department for Transport spokesman said: “HS2 Phase One remains within its schedule and budget.

“Delivering a major project on the scale and ambition of HS2 will always be challenging but, as mentioned in today’s parliamentary report, current cost pressures are well covered within our existing budget.

“This project is at the heart of our plans to build back better, supporting more than 15,000 jobs and 500 apprenticeships.

“We are committed to a tight control of costs and HS2 Ltd continues to identify areas across the project where savings and efficiencies can be made.”

The Government-commissioned Oakervee Review warned in 2018 that the final bill for HS2 could reach £106 billion (at 2019 prices).

Despite it running tens of billions of pounds over its initial budget and several years behind schedule, Boris Johnson gave HS2 the green light in February 2020.