BRITAIN’s troubled high-speed rail project, HS2, is now expected to cost between £87.7bn and £102.7bn, compared with a 2019 estimate of £35bn-45bn to complete the 225km London - Birmingham line. While the new cost estimate includes a new fleet of 54 trains, it excludes any allowance for future inflation.

The completion date for the section from Old Oak Common in west London to Birmingham Curzon Street has been pushed back from the previous estimate of 2029-2033 to between May 2036 and October 2039.

The final underground section to London Euston, on which construction finally started in January, and the connection from Birmingham to Handsacre Junction on the West Coast Main Line (WCML) will not be completed until between May 2040 and December 2043. This is when high-speed trains will finally operate north of Birmingham to Manchester, Liverpool and Glasgow with journey time savings of around 20 minutes.

Announcing the new cost estimate and completion timetable, Britain’s transport secretary, Heidi Alexander, says that two thirds of the increase in cost is due to works being missed from the scope of the original project, underestimation by previous governments, and inefficient delivery of the project. Construction started in 2020 with some design just 10% complete. The remaining one third of the cost increase is due to past inflation.

The government has revealed that £2.4bn, at 2019 prices, was spent on HS2 Phase 2 prior to its cancellation in October 2023, plus £548m (in cash terms) on work to extend and rebuild London Euston up to the end of December 2022, including £105.6m of previous design work that was written off. It also revealed that £15.5bn had been spent on the Phase 1 main civil engineering works (at 2019 prices) by July 2024, representing the entire original budget for this item.

The government has also decided to reduce the maximum speed on the line from 360km/h, which would have made HS2 the fastest railway in the world, to 320km/h. “The change in speed could deliver savings of between £1bn to £2.5bn and at least a year in delivery time,” the government claims. This is mainly due to reducing testing and commissioning time.

“Initial assessments indicate that journey times from London to Birmingham will increase by 3 minutes, and will still be 30 minutes faster than the current service, whilst delivering the capacity we need and supporting future economic growth along the line, and around the stations,” Alexander says.

Construction of the connection to Handsacre Junction on the WCML has been delayed to reduce costs. Other measures to cut costs include abandoning plans to fully automate the new railway as this not needed to operate just three trains per hour initially and up to 10 trains/h and would add further complexity. Without ATO, it will be possible to lower the signalling specification and introduce a standard ETCS Level 2 system.

HS2 will still be future proofed to operate 16 trains/h, but ATO or another driver advisory system may be required for a frequency beyond 12 trains/h.

Network slashed

When HS2 was first conceived in 2009 as a Y-shaped network linking London and Birmingham to Manchester and Leeds the cost was estimated at £30bn.

Even before work started in 2020, planned links to HS1 (London - Channel Tunnel) and Heathrow Airport were dropped.

Faced with steadily escalating costs and the completion date receding into the future, the project was savaged by the previous government in a desperate attempt to bring costs under control.

In 2021, the government cut back the Phase 2b eastern leg from Birmingham to Leeds to a stump linking Birmingham to the East Midlands. In October 2023, prime minister, Rishi Sunak, cancelled Phase 2a from Handsacre Junction to Crewe, Phase 2b from Crewe to Manchester and the Birmingham - East Midlands section.

Reset

The current Labour government announced a reset for the project in 2024 and in December 2024 Mark Wild took over as CEO of HS2 Ltd, the government organisation responsible for implementing the project, with a remit to bring HS2 back under control. Mike Brown was appointed chair of HS2 Ltd June 2025.

“Mark Wild has set his organisation the challenging ambition of delivering the programme at a cost of £93.2bn and an initial opening date of late 2037 for trains running between Old Oak Common and Birmingham Curzon Street,” Alexander says. “This ambition deliberately sits within the lower half of the ranges to drive better and more efficient delivery. We support it, which gives him a clear mandate to drive down costs and improve productivity.”

While the reset will not be completed until the first half of next year, Alexander says it is already starting to bear fruit. “In the 2025-26 financial year, HS2 Ltd delivered over 10% more progress on construction than planned with the same amount of money.

“Taking earthworks as an example, over 2025-26, HS2 Ltd moved 25 million m3 compared with a plan of 20.8 million, an improvement of 20%. Construction costs are tracking below forecast and delivery performance improved over the past year, with six major milestones on tunnels and roads completed ahead of in-year schedule.”

Measures are being taken to reorganise HS2 Ltd in order to control the project more effectively. These include:

  • cutting 300 corporate roles and rebalancing the organisation to better support delivery teams
  • redirecting resources to boost frontline delivery capacity by 40%, with 168 additional roles focused on cost management, oversight and decision-making
  • bringing in skilled and experienced professionals across commercial, technical, assurance, controls, and finance functions to fill critical capability gaps, and
  • appointing a new director of business delivery to reshape the organisation and a chief commercial officer to provide additional commercial leadership.

“Resetting HS2 was the only way to regain control of the project,” Wild says. “We have turned a corner in the last 12 months with significantly improved levels of productivity, helping us to deliver major milestones ahead of schedule.”

The government says 31,000 people are working on the project and it estimates that around £20bn is being added to the economy around the two station sites and new depot in Birmingham and Old Oak Common over the next decade, including over 63,000 new homes and over 49,000 new jobs in these areas. Commercial development at London Euston alone is estimated to add £41bn to the economy over the next 30 years and will support 34,000 new jobs.