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21 June 2021updated 04 Sep 2021 1:18pm

How the cost of HS2 has surged

The high-speed rail project is now expected to cost at least £107.7bn, up from £32.7bn in 2012. 

The cost of HS2 – the planned high-speed railway line linking London to Birmingham, Manchester and Leeds – has increased by £1.7bn in the past year. The rise, revealed to the Financial Times by sources close to the project, is linked to the Covid-19 pandemic. Social distancing measures and suspension of work have reduced productivity and forced delays. 

How the cost of HS2 keeps rising
HS2 estimated budget (£bn)
Financial Times, HS2 Ltd, Oakervee Review

The current budget estimate is the latest in a series of cost increases since the contentious project was first proposed more than a decade ago. An initial budget estimate in 2012 of £32.7bn had risen to almost £56bn by the time of the 2015 government spending review. In 2020 an independent review of the project by the engineer Douglas Oakervee found that the cost could reach as much as £106bn. 

Opposition to the project, which received final approval from Boris Johnson’s government in February 2020, has been growing. Local anger about HS2 was a factor in the Conservatives’ dramatic defeat by the Liberal Democrats in the Chesham and Amersham by-election on 17 June. 

Critics of the line fear its potential impact on the environment and that it could further reinforce London’s dominance. But supporters argue HS2 is essential for additional rail capacity.

A spokesman for HS2 said: “The FT reports today imply that the project’s budget has gone up by £1.7bn, this is categorically not the case.

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“The HS2 budget for Phase One remains at £44.6bn. This includes contingency, including unforeseen events like Covid-19. HS2 remains well within this budget and is not forecast to go above it as things stand. It does not require any extra money from the Treasury.”

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