Cost of Euston HS2 terminus could race past £4.8bn estimate, MPs say | HS2

The estimated £4.8bn cost of HS2’s endangered Euston terminus could balloon further unless the government becomes “clear what it is trying to achieve”, the public accounts committee has warned.

In a highly critical report, MPs on the committee said the Department for Transport (DfT) was yet to “establish the design and expectations for the station” against what it was “willing to spend”, despite spending more than eight years planning and designing the London terminus.

The original 11-platform plan was scaled back and original designs abandoned after a review of the high-speed rail network’s costs in 2020, but still far exceeded the £2.6bn budget, which the report criticised as “completely unrealistic”.

The transport secretary, Mark Harper, paused construction of the Euston site along with other parts of HS2 in March this year as the estimates surged. Yet the committee found the government did not know how much additional cost the decision would entail, nor the impact on the local area, with work still to be done to make the site safe and potentially useable until construction resumes.

Under the latest plans, high-speed trains will terminate at a new Oak Old Common interchange with Crossrail in west London when they start operating from Birmingham. Services will only be coming into Euston if and when the new line reaches Manchester in 2040.

The committee also questioned the accuracy of ministers’ six-monthly updates to parliament. It noted that the potential overspend at Euston was put at £400m in October 2020, a sum not altered in subsequent updates through to October 2022 – despite proving less than 20% of the figure the National Audit Office reported five months later in March. The committee called on the DfT to provide greater transparency in its calculations.

MPs said questions remainedabout how the government would manage high levels of inflation across HS2, after its inquiry was told of 30-40% swings in the cost of raw materials.

The committee’s chair, Meg Hillier, said: “The HS2 Euston project is floundering. This is a multibillion-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 … 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 it is not just repeating the same mistakes of unrealistic costings.”

The HS2 terminus forms part of a wider programme to redevelop Euston, including the existing Network Rail mainline station for conventional trains, with new housing and commercial buildings over and around the site.

Residents in the area have suffered enormous disruption, with work at Euston having been under way for six years. This has included widespread house demolitions and the loss of parks, trees and established businesses in the area.

A DfT spokesperson said: “We remain committed to delivering HS2 from Euston to Manchester in the most cost-effective way for taxpayers, which is why earlier this year we made the decision to rephase the construction of Euston to help balance the nation’s books and work on an affordable design for the station.

“The National Audit Office recently acknowledged this will provide time to put the station design on a more stable footing. We note the recommendations made in the committee’s report and will respond to them in due course.”