HS2 has run over budget and behind schedule due to Government underestimating both the complexity and risks of the project, a Whitehall spending watchdog today claims.
A report from the National Audit Office (NAO) said that it is impossible to estimate the final cost for the plan to link Leeds and Sheffield with London via a high speed rail network.
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The watchdog found that “significant challenges” remain to completing the programme and delivering value for taxpayers and passengers and said that both the Government and HS2 Ltd - the private firm behind the scheme - need to be “transparent and provide realistic assessments” in relation to the railway.
A Government-commissioned review led by former HS2 Ltd chairman Doug Oakervee leaked earlier this week stated that the project’s bill could reach £106bn, nearly double the £56bn HS2 was allocated in 2015.
Transport Secretary Grant Shapps has said the Government will make a decision on whether to go ahead with the project in “weeks rather than months”.
The NAO found that HS2 Ltd did not account for the level of uncertainty and risk in the programme when estimating the costs of the first phase of the route between London and Birmingham and had used a method for calculating contingency that was not appropriate.
It also found that both the Department for Transport (DfT) and HS2 Ltd had not adequately managed risks to taxpayer money and, despite attempting to contain costs, they had been unable to bring them within the available funding, or enable passenger services to start by the planned opening date.
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Head of the NAO, Gareth Davies, said the difficulties with HS2 showed there were “important lessons to be learned, not only for the DfT and HS2 Ltd, but for other major infrastructure programmes”.
He said: “To ensure public trust, the Department and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain.”
A DfT spokeswoman said the department “supported this review and is already acting on many of its recommendations” while HS2 Ltd said management had made “several significant changes and improvements to the organisation, its governance and processes”.
Meanwhile peers have clashed over the spiralling cost of HS2.
Tory former Cabinet minister Lord Forsyth called for a major re-think of the scheme but Labour former transport secretary Lord Adonis warned against pulling the whole project “up by the roots” and ending up with even bigger costs to upgrade existing lines.
The report is published after the heads of 19 Local Enterprise Partnerships in the Midlands and the North, wrote to Prime Minister Boris Johnson, urging him to deliver HS2 without further delay.
Political leaders in northern England and business groups have consistently claimed HS2 is vital to boosting transport links across the region while construction firms warn that scrapping it would cause major damage to the industry.
Henri Murison, director of the Northern Powerhouse Partnership, said that research showed that HS2 would deliver more than £2 from every £1 spent for the economy, a better return than comparable projects like the Jubilee Line extension or Thameslink in London.