Government 'opaque' over 'badly off course' HS2, report claims

The Government has been told it must be open on the issues faced by HS2 in a report from the Public Accounts Committee (PAC), which oversees Government spending, released this morning.

The report said the scheme had gone “badly off course” and that evidence given by a Department for Transport (DfT) official and HS2 executives in March shed doubt on previous assurances of the scheme’s progression.

But a DfT spokesperson said: “The current Secretary of State has been clear that this project must go forward with a new approach to Parliamentary reporting, with clear transparency, strengthened accountability to Ministers, and tight control of costs.

The PAC report said: “The High Speed Two programme has gone badly off-course and is now estimated to cost up to £88bn, significantly more than the original budget of £55.7bn (both figures are 2015 prices).

“We are unconvinced that there will not be further cost increases, such as those we have seen in Crossrail and many other programmes, especially given that the route and forecast cost of the northern sections of the proposed railway is still very uncertain and will remain so for years to come.”

It added that along with cost increases and delays, “public confidence in the programme has been undermined”.

The committee found: “At best, the Department for Transport’s previous evidence to the Committee has been less than clear. The Department withheld information from us which would have given a clearer and more accurate picture of the budget and schedule pressures the project was facing.”

The report said DfT and HS2 Ltd “seemed to believe that a lack of transparency with Parliament and the public on the problems facing the programme would in some way protect it.”

The DfT spokesperson said: “We have comprehensively reset the HS2 programme, introducing a revised budget and funding regime, with significant reforms to ensure the project is delivered in a more disciplined and transparent manner.

“This includes appointing the first dedicated HS2 Minister, bi-annual updates to Parliament and establishing a monthly Ministerial Task Force, chaired by the Secretary of State, to ensure the project has a rigorous scrutiny like the 2012 Olympics.”

But the PAC report said there was “no justification” for being “opaque”.

It said HS2 Ltd’s accounts for the year ending March 2019 did not reflect the project’s issues, and when DfT Permanent Secretary Bernadette Kelly appeared in front of the committee in October 2018 and May 2019, she did not reveal that phase one of the scheme would not be delivered on budget or on time, despite HS2 Ltd informing the Government in March last year and Ms Kelly being asked specific questions on the topic.

The report indicated this could be a breach of the Civil Service Code and Parliamentary Privilege.

The DfT spokesperson said: “The Permanent Secretary acknowledged in May 2019 that there were cost pressures that the Department and HS2 Ltd were working to address in line with government policy at the time. Those discussions were active and commercially confidential.”

But the committee said it did not believe either DfT or HS2 had “the skills and capacity they need, now or in the future” to deliver the major construction project.

Committee Chair Meg Hillier MP said: “The Committee is concerned about how open the Department and HS2 Ltd executives have been in their account of this project. It is massively over budget and delayed before work has even begun.

“There is no excuse for hiding the nature and extent of the problems the project was facing from Parliament and the taxpayer. The department and HS2 appear to have been blindsided by contact with reality – when Phase One started moving through Parliament, the predicted costs of necessary commitments to the communities affected have exploded from £245m to £1.2bn.

“The Government unfortunately has a wealth of mistakes on major transport infrastructure to learn from, but it does not give confidence that it is finally going to take those lessons when this is its approach.

“In the six-monthly reports the Department has now agreed to give us, we want to see an honest, open account, and evidence of learning from past mistakes being applied to bring this project under control, to deliver it within the timeline and budget that have been agreed in justifying the project.”

The Committee’s Deputy Chair Sir Geoffrey Clifton-Brown MP said: “This PAC report on HS2 is one of the most critical, in both the transparency of Government and the handling of a project, that I have seen in my nine years in total on the committee.”

Lord Berkley, the former deputy chairman of the Oakervee Review into HS2 who published a dissenting report earlier this year, said: “I am pleased that the Public Accounts Committee (PAC) has taken steps to investigate HS2, but it is clearly not enough. Unfortunately, the report has failed to take into account the even earlier warnings that I, and others, gave the Government several years previously about the cost increases, and the failures of successive ministers to properly inform Parliament.”