The Government has dismissed reports that construction of HS2 could be going ahead between the West Midlands and Crewe, and is launching an independent review of the costs of Phase 1 between London and Birmingham with the intention of learning lessons from the troubled history of the high speed line.

Former London Underground managing director and Crossrail CEO Mark Wild has been named as the new chief executive of HS2 Ltd, while some of the construction contracts are to be reviewed and could be amended.

Transport secretary Louise Haigh said the extent of the challenge inherited on HS2 has become clear, with ‘costs being allowed to spiral out of control and failure to deliver to budget’.

The Government is attributing the soaring costs of HS2 to ’poor project management, inflation and poor performance from the supply chain, without sufficient explanation of what is to be done to deliver to budget’.

It has also made it clear that it will not be reversing last year’s decision to cancel Phases 2A and 2B, although it ‘recognises concerns about connectivity between Birmingham and Manchester’. Even so, ministers say the primary focus is now the completion of HS2 Phase 1 between London and Birmingham ‘at the lowest reasonable cost’.

The Government is also reinstating ministerial oversight of the project to ensure greater accountability. This will involve regular meetings from now on, where both the transport secretary and rail minister Lord Hendy will be joined by the chief secretary to the Treasury. They plan to ‘challenge and remove obstacles to securing the full benefits of the railway more cost effectively’.

Transport secretary Louise Haigh said: ‘One of my first jobs has been to urgently review the position I have inherited on HS2.

‘It has long been clear that the costs of HS2 have been allowed to spiral out of control, but since becoming transport secretary I have seen up close the scale of failure in project delivery – and it’s dire.

‘Taxpayers have a right to expect HS2 is delivered efficiently and I won’t stand for anything less.   

‘I have promised to work fast and fix things and that's exactly why I have announced urgent measures to get a grip on HS2’s costs and ensure taxpayers’ money is put to good use.  It's high time we make sure lessons are learnt and the mistakes of HS2 are never repeated again.’

The independent Major Transport Projects Governance and Assurance Review will be led by senior infrastructure delivery advisor James Stewart, and will make recommendations to the Government this winter.

It will investigate the oversight of major transport infrastructure projects, including the effectiveness of forecasting and reporting of cost, schedule and benefits, as well as ways to make savings.