Updated 13.15

The Commons Public Accounts Committee has published a highly critical report about the latest developments at HS2, which it says is now ‘very poor value for money’ after Phases 2A and 2B to Crewe and Manchester were cancelled by the Prime Minister last October.

The Committee says the remaining Phase 1 between London and Birmingham ‘will not be value for money, as its total costs significantly outweigh its benefits’.

The Department for Transport had told the Committee that it was still better to complete Phase 1 – a calculation made by excluding the £23 billion spent to date, and including as a benefit of the project avoiding approximately £11 billion of remediation costs which would be incurred if the last section was also cancelled.

The Committee has remained unconvinced, saying that it has been ‘left with little assurance over the calculations’.

The Committee’s chair Dame Meg Hillier said: ‘The decision to cancel HS2’s Northern leg was a watershed moment that raises urgent and unanswered questions, laid out in our report. What happens now to the Phase 2 land, some of which has been compulsorily purchased? Can we seriously be actively working towards a situation where our high-speed trains are forced to run slower than existing ones when they hit older track? Most importantly, how can the Government now ensure that HS2 deliver the best possible value for the taxpayer?

‘HS2 is the biggest ticket item by value on the Government’s books for infrastructure projects. As such, it was crying out for a steady hand at the tiller from the start. But, here we are after over a decade of our warnings on HS2’s management and spiralling costs – locked into the costly completion of a curtailed rump of a project and many unanswered questions and risks still attached to delivery of even this curtailed project.’

Responding to the report, Lord McLoughlin, who chairs Transport for the North, said: ‘We know the North has huge economic potential, but poor connectivity is holding the region back. Transport for the North’s ambition is to close the productivity gap, decarbonise surface transport and improve opportunities for all. That requires transformational investment in our transport system, and none more so than in our railways.

‘The decision to stop HS2 at Birmingham is a missed opportunity for the North, and the country as whole. It wasn’t just the improved North-South connectivity it would have enabled, but the extra capacity it provided, both in terms of the new high-speed line and in the space freed up on the existing network to run more services. This would have benefited passengers and freight.

‘Transport for the North’s evidence shows those capacity and connectivity needs haven’t changed, and we need still need that transformational investment in pan-regional transport to support levelling up. We will continue to work with government to address these challenges and deliver the benefits citizens and businesses across the North need.’

Railway Industry Association chief executive Darren Caplan said: ‘Today’s report by the Public Accounts Committee raises many questions which remain unanswered, not least of which is how HS2 going to operate as a railway. Ministers urgently need to make decisions on this point and others to ensure both sunk and future investment deliver value for money for taxpayers and the railway.

‘It remains RIA’s view that the full benefits of HS2 can only be realised by building the full HS2. However, going forward RIA and our members are committed to working with the Government on the trajectory of future rail investment and how this meets long-term demand for rail capacity. It is imperative that options are kept open as the scope of work on this is developed.’