Spending watchdog concerned HS2’s Euston terminus not classed as mega-project

The chair of the Public Accounts Committee (PAC) has raised concerns that HS2’s Euston scheme has not been not classed as a mega-project.

In his first annual report as chair of the government’s spending watchdog, Geoffrey Clifton-Brown warned that because its current cost is below £10bn, it would fall “under the previous ineffective approach to governance and decision-making”.

In June, the Office for Value for Money and Treasury announced several changes to how they will manage mega-projects, the definition of which requires costs to exceed £10bn.

Clifton-Brown said the committee had been told Euston “has the potential to become a mega project” but expressed significant concern about the current status of the scheme.

Cost overruns on the HS2 scheme has a whole led the previous Tory government to pause plans to build a terminus at Euston more than two years ago.

The Labour government’s first budget last autumn confirmed it would go ahead, but insisted, like its predecessor, that the scheme at Euston must be substantively funded by private finance, expected to cost around £6bn.

In his report today, Clifton-Brown said his committee was “unconvinced that the private sector will provide this level of funding”.

He said delivery of the station to accommodate the mainline underground and HS2 railway was “extremely complex and uncertain”, complaining that there was “currently no clear plan”.

Addressing the HS2 scheme more generally, Clifton-Brown said the committee was “no more certain of government’s ability to successfully deliver this vast programme than we were a decade ago”.

“It is unacceptable that the final cost, scope, completion date and benefits of this now thirteen-year-long project are still unknown, and in June of this year the Secretary of State for Transport confirmed that the programme will be delayed once again beyond 2033,” he said.

“The fact that DfT and HS2 Ltd disagree on the estimated total costs for completing the programme is illustrative of their failure to work together effectively and ensure adequate financial oversight of the programme”.

Clifton-Brown said the PAC had been “encouraged” by the Office for Value for Money’s recommendations on governance and budgeting for mega projects, as well as the merger of previous infrastructure advisors to create the National Infrastructure and Service Transformation Authority under the oversight of Treasury.

He expressed hope that Treasury’s “direct stake” in major projects would give it “far better oversight and accountability to deliver these huge programmes, rather than the old way of simply leaving these mega projects to the department to deliver”.