HS2 ‘will not go over £50bn budget’

Lord Deighton, the Treasury Minister brought in by the Government to oversea infrastructure investment after his success as chief executive of the London 2012 Olympics, said he is “absolutely committed” to HS2 being built within its existing budget.

The Government has allocated £42bn towards building the ‘Y’ shaped high-speed line linking London, Birmingham Sheffield, Leeds and Manchester; and a further £8bn for the cost of the new 250mph trains.

Those figures include a contingency fund of more than £15bn, however, meaning Ministers are confident the scheme will not run over budget – despite concerns about spiralling costs.

“I absolutely get the sentiment behind all the voices which say the cost of HS2 has to be really well managed,” Lord Deighton said. “We have to deliver this properly, it has to be kept within that envelope. We will deliver this within the envelope – I’m absolutely committed to that.”

The Government launched its “fightback” on HS2 last month following a series of negative reports from bodies including the Commons public accounts committee, which questioned whether the scheme would deliver value for money.

The Labour Party is now apparently considering whether to withdraw support for the scheme – despite having been its original architects in 2008 – with Shadow Chancellor Ed Balls openly questioning whether the money would be better spent on other projects.

But Lord Deighton stressed that political consensus over the need for a new North/South line is essential for it to become a reality.

“Consensus is critical,” the Tory peer said.

“One of our mantras for the Olympics and Paralympics was cross-party support, we worked really hard at it right through the seven years.

“We kept all the Opposition parties – which, of course, swapped as we went through it – just as involved as the Government. That was crucial.

“I don’t see why infrastructure should be any different. There’s not much ideological difference about whether we should have good railways, good roads, power stations that produce the electricity we need, ports that allow goods to go in and out.”

Prime Minister David Cameron and his deputy Nick Clegg have both warned over recent weeks that Labour would be “betraying the North” if the party U-turns on HS2.

Asked whether he fears Mr Balls and Labour will pull withdraw support, Lord Deighton said: “I don’t think they will. I think the essence of his warning was: ‘If this is out of control, we’ll have to think again’. It’s going to be under control.”

The Tory peer was also full of praise for Sir David Higgins, the current boss of Network Rail who will take over as head of HS2 Ltd in January.

Earlier this week, Sir David said he hopes to bring forward the scheme’s 2033 completion date.

He has suggested he is considering starting building work on the second phase of the line in reverse, heading from North to South, to enhance the economic benefits for the region.

“We said to ourselves, ‘who is the best possible person in the world to come and ensure that we take charge of this project to deliver?’” Lord Deighton said. “That person is David Higgins.

“If you’ve got someone of David’s quality at the top, it means your ability to hire terrific people every layer, all the way down, gets leveraged, and that’s incredibly powerful.”