Government criticised over HS2 Euston station delays

A report by a Parliament committee has criticised the government over its handling of HS2’s station at Euston and how it mismanaged the cost expectations of building a large railway station in the centre of a city.

Proposed Euston station (c) HS2

The report into HS2 Euston station by the Public Accounts Committee says that the government still doesn’t know what it is trying to achieve with the Euston station site, despite spending more than eight years of work planning it.

The project has been mired in a lack of clarity about its scale, costs and overall end design pretty much ever since it was proposed, with numerous changes to the project adding to both the costs and delays.

Originally planned as an 11-platform station to be built in two phases alongside a redeveloped existing Euston station, it was cut back to a single phase smaller 10-platform station in 2020.

The Committee report says though that the £2.6 billion cost announced by the Department for Transport (DfT) in April 2020 was already below HS2’s preliminary estimate of £3 billion, and preliminary estimates are almost always under the final budget once detailed design work gets underway. Those later detailed design work pushed the cost to £4.4. billion

Since then, the £4.4 billion cost of an 11-platform station has risen to £4.8 billion for the smaller 10-platform station.

However, the whole site is now on hold for the next two years as the government pushes HS2 to revise the design again. Ostensibly a cost-saving measure, it will in fact push costs up as high inflation means building something later will always cost more than building it today.

The Committee says that it is concerned that the costs were not fully understood and that the government’s six monthly reports on HS2’s progress were not clear about cost increases until just before the project was put on hold. The Committee has told the government that it should be more transparent about changes to costs in its future submissions to the members of the Committee.

The Committee is also concerned that even at this stage, there’s a lack of clarity about what the Euston station’s final design ambitions will be. There are effectively two options — the full option with the oversite development that was planned, or a cost-cutting option where the station would not be structurally designed to support oversite developments. That cheaper option saves money upfront, but then lacks the ability to claw back some of the costs from the oversite development above the station. The Committee notes that as one of the aims of the station is to promote regeneration of the area, going for the up-front cheaper option would mean the regeneration ambitions are also cut back, to the detriment of the people who live and work in the area.

The Committee is also concerned that the decision to pause building work at Euston station was taken without a full understanding of the costs involved in pausing a construction project part way through being built, and the impact on people living in the area blighted by the building site.

There are also questions about how the government will manage high levels of inflation on the HS2 programme. The inquiry heard the HS2 project is seeing 30% to 40% swings in the cost of raw material, and as HS2 will need to absorb those costs without additional funding, it’s not clear how that could be achieved.

The report also criticises the DfT for failing to learn lessons from previous rail project problems and says that it is seeing similar issues at Euston as it saw with the Thameslink and the Great Western Railway modernisations. There’s a concern that lessons from Euston won’t be factored in when deciding on what sort of station to build in Manchester, the discussions for which is underway at the moment.

Dame Meg Hillier MP, Chair of the Committee, said: “The HS2 Euston project is floundering. This is a multi-billion pound scheme which has already caused major disruption to the local community put on pause. The pause, ostensibly to save money, is not cost free – mothballing and possible compensation for businesses which have lost work will all need to be added to the HS2 tally. The Government must now be clear what it is trying to achieve with this new station, and how it will benefit the public.

Our report finds that a wildly unrealistic budget for HS2 Euston was set in 2020 in the expectation that it would be revised. The Government must demonstrate that that it is not just repeating the same mistakes of unrealistic costings. HS2 Euston has shown us that forging ahead over-optimistically in an unclear direction is clearly not the right approach.”

The delays to the HS2 station mean that it’s now unlikely to open until 2040, and the London end of the HS2 railway will terminate at Old Oak Common, with passengers expected to switch to other services, mainly the Elizabeth line, to complete their journey.

The full report is here.