Corruption Timeline
As one DfT official said, 'If we had told you the true cost of HS2, you would never have approved it!'
Jan 16 2025 - Michael Gross writes for PoliticsUK
The £300 billion Ponzi Scheme – How The Department for Transport and HS2 Mafia Falsified Figures and Robbed Taxpayers
A National railway that should have cost £40 billion connecting Northern cities with London will now cost up to £300 billion, once financing costs and subsidies are taken into account, connecting only the suburbs of Birmingham and London. HS2 is nothing more or less than a Ponzi Scheme, sucking money into an investment scam that only enriches the supply chain, consultancies, employees of HS2 and the politicians keeping it going.
Successive Conservative Prime Ministers and Secretaries of State for Transport and Ministers at the Department of Transport and indeed Chancellors and the Treasury have at all times known that the project had no cost benefit to the economy, but for political and or financial reasons have pressed on regardless.
HS2 has always been a gravy chain for the supply chain including professionals and the politicians and civil servants who kept this useless and unrealisable project going for improper purposes.
Michael Gross points that HS2 fraud & corruption has being hidden / ignored by PM's, Ministers, Treasury, Select Committee's & MSM.
He has contacted senior journalists, select committee's & MP's and none of them will discuss it. Many people have made serious comments about HS2 / DfT lies, fraud & corruption in the public arena, which if they were untrue would certainly be libellous.
But not a word from the accused & worryingly they are not being held to account by Select Committee's, MP's & MSM.
https://newshubgroup.co.uk/opinion/the-300-billion-ponzi-scheme-how-the-department-for-transport-and-hs2-mafia-falsified-figures-and-robbed-taxpayers?fbclid=IwY2xjawH7MlhleHRuA2FlbQIxMQABHZAhKTt_srzMw3lN-yZKoozKIh3V3jBKqe1e5QDUiNw0mmdJRQNW3PeRGA_aem_WybpDIT-bFQm0TirRYrqew
Oct 27 2024 - Andrew Gilligan writes in Sunday Times
Doomed from the start: the four reasons HS2 failed
Last week we exposed the chaos that still haunts the project. Now a former No 10 adviser sets out how it became Britain’s ‘worst infrastructure scheme in modern history’
1. The wrong route
Britain’s previous high-speed line, HS1, which runs from St Pancras International to the Channel tunnel, did work, costing two thirds less than HS2 per mile in real terms. This was partly because it followed a motorway corridor, which was already spoilt.
To save a few minutes, HS2 chose instead to slice through the middle of the Chilterns, stuffed with ancient woods and vocal, politically active nimbys, and certain to require vastly expensive tunnels, cuttings and other aesthetic additions. A better route would have been along the M40 corridor.
2. The wrong speed
They were wildly aspirational, opting for a line with a design speed of 250mph, one third above the European high speed standard (France’s TGV lines and HS1 have a maximum of 186 or 200mph). Accommodating this ultra-fast design meant the line had to be flatter and straighter, with more earth moved, and yet more tunnels and viaducts, costlier track and structures. The top speed of 250mph, by the way, will never be reached in planned service.
They were wildly aspirational, opting for a line with a design speed of 250mph, one third above the European high speed standard (France’s TGV lines and HS1 have a maximum of 186 or 200mph). Accommodating this ultra-fast design meant the line had to be flatter and straighter, with more earth moved, and yet more tunnels and viaducts, costlier track and structures. The top speed of 250mph, by the way, will never be reached in planned service.
3. Bad connections
HS2 doesn’t link properly to the rest of the transport network. Many rail passengers from London to Birmingham don’t end their journey in the city centre: they connect at Birmingham New Street station for other parts of the conurbation. Under HS2’s plans, this connection becomes a 15-minute walk through the streets of Birmingham from its separate purpose-built terminus to the local trains at New Street, losing half the time you saved coming from London.
4. Ratchet, ratchet, ratchet
The scheme’s greatest flaw is the culture of HS2 Ltd, whose waste and dishonesty are surely now undeniable. This is about more than just profligacy. Bent Flyvbjerg, former professor of major project management at Oxford, has coined the “iron law of megaprojects”, which describes them as “over budget, over time, under benefits, over and over again”. Flyvbjerg identifies optimism bias as a key problem: project managers gloss over and underplay costs to get something started, then gradually admit the full cost once huge amounts of money have been spent and it’s too late to stop.
This ratchet process has been at the heart of HS2’s spiralling costs. HS2 and Department for Transport (DfT) officials concealed the rising costs from parliament; had those been known at the time, the scheme might have been cancelled. They misled No 10 and at least one Treasury official. They ousted staff who rang alarm bells.
When The Sunday Times reported this last October, HS2 and the DfT pressed us in Downing Street to authorise denials which were untrue. The denials they asked to release were that the allegations in The Sunday Times had been looked at previously by the National Audit Office (NAO) and found to be unfounded. But in fact, they had not been specifically looked at by the NAO, and at least one had been founded.
Last year, Rishi Sunak called their bluff, cancelling phase 2 from the Midlands to Manchester. Another adviser and I in Downing Street argued that he should make it a “teachable moment” for Whitehall, with inquiries and sackings, but he didn’t.
Thus many of the culprits are still there, and still using the same tactics. The same ratchet operation is clearly being tried on the new ministers: we’ve spent so much already, it would be silly not to finish. It’s not so much more, you know.
https://www.thetimes.com/uk/transport/article/hs2-biggest-problems-speed-route-cost-lprl0fpkc
Oct 6 2024 - Tony Berkeley writes to Rachel Reeve about HS2 problems
Dear Rachel,
HS2 is still bleeding funds
You will be aware of my interest in HS2 – the need or otherwise, and the costs.
The recent media coverage of overcrowding at Euston is a failure of the train operator to manage the train departures and passenger flows; the problem does not seem to happen at other London main line stations. One simple solution would be to terminate the now truncated HS2 line trains at Old Oak Common, spreading the new load of passenger demand onto the Elizabeth Line rather than making Euston even more crowded. Ten HS2 platforms there without a massive investment in connections to the Underground can only make matters worse.
If ministers insist on taking the HS2 line to Euston, I remind you that there is no safe solution yet published except that by Chris Gibb and in the petition by Sam Price. This is much cheaper than the HS2 option but will still need private finance unless ministers decide for example that this is more important than building the new lines across the North.
A report in the FT (27 September) stated that the Department for Transport has asked KPMG to lead a review into governance and accountability at HS2. May I suggest that this scope should be widened to include the governance and accountability of the Department for Transport itself, since it was quite clear from the Panorama programme (27 September 2024) that ministers, senior officials in DfT and the Chairman of HS2 all knew that the project was running seriously over budget, and this resulted in Nus Ghani MP misleading parliament by quoting a figure of £55bn capital cost of Phase 1 (2a) rather than the £80bn in the HS2 Chairman’s stocktake. This resulted in parliament giving Royal Assent to the Bill on an erroneous basis.
You have quite rightly been challenging departments and business to reduce the need for consultants. KPMG are not independent of DfT since they joined our meeting on HS2 costs during the work on the Oakervee Report and stated that Michael Byng’s estimate was within 3% of their own one, and a long way above that of DfT – who would not of course provide any figures to us for the Oakervee Report.
So if there has to be report on governance and accountability of DfT/HS2 et al, should this not be done by an organisation independent of DfT? If ministers insist on using KPMG, then presumably KPMG will not need any further funding as they must have been well remunerated for the work they did for us at Oakervee and at other times. In parallel, putting HS2 into liquidation, stopping all further work on it, coupled with an independent inquiry into what went wrong might save the Treasury a lot of money! I am copying this to Peter Hendy and Louise Haigh.
Yours Tony Tony Berkeley
https://www.tonyberkeley.co.uk/index_htm_files/rh242206%20to%20Rachel%20Reeves.pdf
Oct 6 2024 - Tony Berkeley writes again to Simon Case at Cabinet Office
Dear Simon,
‘Ministers have broken the Ministerial code by misleading Parliament on costs and timescales of HS2’ – reference my letter dated 8 July 2021 is now more than three years ago that I wrote to you asking you to investigate my assertion that the ‘HS2 Phase 1 Bill received Royal Assent only because Ministers misled Parliament multiple times, either by omission or misinformation, and that this misleading has continued with Phase 2A - for a project now expected to cost £142 bn, ten times the original estimate’.
The figures are of course different now but evidence to support my request has at last been exposed to the public with the recent Panorama programme where a number of people gave very firm evidence that Nus Ghani MP, then a junior minister in the Department for Transport, not only misled parliament on the costs of Phase 1, but that she and the DfT Permanent Secretary had been present at meetings where this was discussed and that they had all heard that latest cost estimates from the HS2 Chair indicated that the project could not be built for the figure still being used by officials and given to the minister. Furthermore, it is also clear that the reason for DfT hiding the higher figure from ministers was the fear that, if Parliament was told about the higher and more likely figure, it would not have approved Royal Assent for Phase 1 of the project.
.......
I therefore request that you review the reasons for rejecting my request over three years ago and ask the new PM’s permission to investigate these allegations afresh. I can of course send you copies of the relevant correspondence but I expect that you have them on file.
https://www.tonyberkeley.co.uk/index_htm_files/rh241006%20to%20Cabinet%20Secretary%20on%20HS2.pdf
Tony Berkeley writes again to Simon Case regarding HS2 fraud, probably wont get an answer, but in a future inquiry it will prove that Simon Case knew about the fraud and did nothing.
Sep 2024 - BBC Panorama - HS2 The Railway that Blew Billions
10'30" Christian Wolmar says the 250mph hamstrung whole project as had to be straighter & run on level ground.
14'07 Andrew Bruce says that in first week at HS2 Ltd in 2015, he was given 2 sets of figures, one set @ £2.8bn, that he could show to govt & the true set that showed that property budget was hugely exceeded.
16'30" Doug Thornton informed Simon Kirby HS2 CEO & board members that property budget was massively low & was ignored.
DT & AB's boss Beth West went ballistic when told that DT wanted to present true figure to HS2 Ltd Board Members.
17'55 Andrew Bruce - 'She (Beth West) went ballistic, she was screaming, she was shouting, she was belittling Doug, she then started to to draw the slides herself, how she would like to see it'.
18'05 Doug Thornton - 'I think the only reason she (Beth West) wanted to go with those numbers (the low incorrect figure) was that they were convenient & would help the organisation through the review point & onwards to the act of parliament'.
18'35" Andrew Bruce - 'She (Beth West) wasn't disputing facts, she wasn't saying they were wrong, what she was saying was we will not present these figures to the board, because the Royal Assent will not be approved'.
HS2 Ltd responded that DT & AB were sacked for failing there probationary period!
23'45" Andrew Bruce said that he was told "If we start paying people what the property is valued at, we will run of our budget vey quickly & it will be clear that we do not have enough money & we will not get Royal Assent".
29'05" Doug Thornton says "Before Royal Assent the figures were incorrect, budgets should have been updated, programs should have been updated, Parliament would have had the opportunity to take a decision on HS2 based on truthful numbers and a truthful program. I believe parliament was mislead".
29'23" An internal govt document produced just before Royal Assent suggested that the overall budget was unrealistic, it said the project was high likely to go over by up to 60% to more than £80bn". This document was not passed onto parliament.
32'30" Allan Cook the HS2 Chairman from 2018-21, said he did a stocktake and the costs came out to around £80bn.
35'20" Allan Cook had a meeting Chris Grayling SofS & in attendance were Nus Ghani Rail Minister, Clive Maxwell & Michael Bradley HS2 CFO, he told them that the budget of £55.6bn was not achievable under the current scope. Just 3 months later a statement in parliament by Nus Ghani took Allan Cook by surprise, when she told parliament that the HS2 budget remained at £55.6bn & the timetable remained 2026 & 2033. Allan Cook eventually stated that he thought Nus Ghani had been conservative with the truth.
Allan Cook finished with "Can we effectively trust everything politicians are saying? What were finding now is that actually we can't trust them".
https://www.bbc.co.uk/iplayer/episode/m002336f/panorama-hs2-the-railway-that-blew-billions.
Sep 2024 - ICE Report on HS2
5 Points
1. Who’s in charge of infrastructure projects must be clear -
HS2 Ltd went through many different forms with high levels of staff turnover.
2. Stronger client and departmental capability is needed – particularly on technical assurance and
‘owning the project’
Having government departments sponsor major projects works – but only if they are capable.
HS2 showed that civil servants and ministers often lack the right technical and delivery expertise.
Competing with the private sector for talent is difficult for the civil service. But government sponsors
must prioritise recruitment rather than focusing on costs.
There was optimism that the expected creation of a new National Infrastructure and Service
Transformation Authority (NISTA) could better support major infrastructure planning and delivery.
3. Any programme of this scale and significance needs more development time before commencing
works
The most value can be achieved in a project’s conceptual stages. Clients have maximum control and
costs are lowest.
On HS2, politics drove the project forward too quickly. But this left little time to assess alternative
options, build in flexibility and challenge designs.
Instead, politicians’ preferences for world-leading specifications drove costs higher than necessary.
And too little attention was given to how the route would interact with other infrastructure to minimise
disruption and maximise the wider benefits.
Saying how much the project would cost early on – with so little design work completed – was another key mistake for managing expectations later.
4. The contracting approach should set up the project up for best-practice delivery
The contracts were awarded too early on Phase 1. There had been too little design development or risk
mitigation – particularly for such large contracts.
That size also gave the contractors more influence to change the terms.
Including design aspects in the contracts as well meant HS2 Ltd couldn’t act as the ‘guiding mind’ for
the technical development of the project.
One consequence was the failure to use more standardised assets, such as bridges, to reduce costs.
5. Major projects and programmes require clarity and consistency on outcomes to achieve political and
public buy-in and deliver value for money
One of the striking things about the decision to cancel the northern leg was that the prime minister alone
could make it, despite the project having parliamentary approval.
In part, that was because political and public support had ebbed away.
There’s never been a consensus about why HS2 was needed and what benefits it would bring to maintain
support amid rising costs.
Infrastructure planning needs to start with outcomes to find the right solutions. That in turn will change
how we debate those projects.
Many of our conversations reiterated the need for a national transport strategy as a starting point, which
the ICE has long called for.
Note: Many of the above points were made in IPA Report in Jan 2017 - The DfT did not listen. https://www.ice.org.uk/news-insight/news-and-blogs/ice-blogs/the-infrastructure-blog/lessons-from-the-cancellation-of-hs2s-northern-leg
Jun 2024 - HS2 Phase 1 Property
In July 2024 the declared property cost for HS2 phase 1 was £4.173bn, rising £0.26bn (£260mn) in the previous 12 months.
In the same 12 months HS2 have only paid out c£0.16bn (£160mn), meaning that the cost rise is outstripping the payments by £100mn / year.
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The current cost of £4.123bn & the annual rise of £260mn, would seem to make Andrew Bruce's 2016 rejected phase 1 property estimate of £4.8bn to be on the money.
https://www.bbc.co.uk/news/business-49482701
Even if the costs stayed stable at the present rate of settlement it will take until 2054 for the phase 1 property compensation to be complete.
In Mar 2023, HS2 Ltd told the Commons PAC that it had spent £3.6bn to acquire 95% of phase 1 property, which infers that it would acquire 100% of the phase 1 land for £3.79bn.
https://committees.parliament.uk/oralevidence/13838/pdf/
This was HS2 Ltd being very economical with the truth as in 'acquiring' in property terms with respect to Compulsory Purchase Order (CPO) land, means that HS2 Ltd / DfT have taken possession and paid 95% of HS2 Ltd 'estimate' of the lands worth and the full settlement had not been agreed. HS2 Ltd omitted to tell CPAC that they had estimated that the disputed 5% was already up to £260mn and rising £12mn / month
In fact as of July 2024 HS2 Ltd have only fully settled only 304 claims (total 1723 claims) at a cost of £1.51bn of the current £2.39bn paid out, leaving £1.78bn and rising at £260mn / year in disputed / estimated future claims.
Oct 2023 - HS2: The secret files that expose a multibillion-pound cover-up -Sunday Times Report
;The company in charge of constructing the HS2 railway has been accused of deliberately covering up its escalating costs to ensure politicians would keep spending billions of pounds of public money on the project. They allege that for years parliament was not made aware of the true costs of the high-speed line when it voted on laws that approved the construction.'
'The whistleblowers allege HS2 executives had an incentive to play down figures because the project might have been scrapped if parliament had known how costs were escalating. “This was a fraud against the British people,” said Lieutenant Colonel Andrew Bruce, one of the whistleblowers.'
'Last week, Professor Stephen Glaister, the former chairman of the government’s Office of Rail and Road, who has advised the DfT on HS2, said: “These are extremely serious allegations that suggest something has gone terribly wrong with the oversight of the HS2 project. It is clear that an independent inquiry should now be held to get to the bottom of the matter. If the true costs and timescale of the project had been known beforehand, it might well have been stopped much earlier.”
Lieutenant Colonel Andrew Bruce, who joined HS2 as the property department’s head of planning and performance a few months after Thornton, says he shredded a pile of 30 copies after being told to get rid of the report.
'When challenged last week, HS2 claimed the £2.8 billion estimate had proved to be “completely correct” because it had bought all the land and property needed at a cost of £2.78 billion. It said this meant Bruce’s estimate of £4.8 billion was “untrue”.'
Bruce was on the money the current estimated spending on Phase 1 property is £4.12bn, rising £160mn every year.
'That summer (2017), Michael Byng, an expert who devised the method used by Network Rail to cost its projects, calculated that the overall cost of HS2 would in reality be £104 billion. This was almost double the official figure and, at £400 million per mile, was 15 times the cost of the most recent high-speed TGV line built in France.
Byng says he met ministers and a senior civil servant and they were deeply concerned that the official costs were not realistic. However, HS2 insisted it could keep to the official budget.'
'According to the DfT source, Grayling met Cook the following month and told him: “If we can’t bring this in at £55.7 billion, I think we will have a serious discussion about scrapping the project.”
On June 7, 2019, Cook sent a first draft of his report to Grayling. It suggested HS2 was billions of pounds over budget and years behind schedule.'
'However, this was not reflected in the submissions to parliament. In July, the minister for transport, Nusrat Ghani, fielded questions during a Westminster Hall debate on HS2 before the Commons final vote on the bill to approve the Birmingham to Crewe phase two leg.
She said: “I stand here to state confidently that the budget is £55.7 billion and that the timetable is 2026 and 2033.” She repeated her assurances five days later, during the third reading debate in the Commons.
A freedom of information request later revealed Ghani had been told three months earlier that the project would breach its budget. Last week, she did not respond to requests for comment and Grayling declined to comment.'
'The true situation was even worse. When Cook produced his final report in August, it revealed that HS2 was £32 billion over budget.
The new overall official cost figure of £88 billion was very close to the estimate made by Mansell two years earlier. By then, Boris Johnson had taken over as prime minister and Grayling had been sacked. He never saw Cook’s final report and his threat to scrap HS2 went with him.'
'Sunak said HS2 Ltd had “spent four years on two unaffordable designs, with a gold-plated and over-specified station”. He said he was taking the project out of the hands of HS2 because: “There must be some accountability for the mistakes made, for the mismanagement of this project.”'
https://www.thetimes.com/uk/transport/article/hs2-biggest-problems-speed-route-cost-lprl0fpkc
May 2022 - Misconduct Evidence Presented to High Court
The evidence that Nus Ghani Bernadette Kelly, Allan Cook, & Mark Thurston had misled parliament & public before HS2 phase 2a final vote in July 2019, was presented to the court, but not addressed in the decision. https://webarchive.nationalarchives.gov.uk/ukgwa/20230903182551/https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1079709/Bundle_G.pdf
Jan 2022 - Lord Berkeley's letter to PM Boris Johnston
Lord Berkeley sends letter to PM requesting that he investigates the evidence on breach of ministerial code.https://www.tonyberkeley.co.uk/index_htm_files/rh220105%20to%20Boris%20Johnson.pdf
Boris could not be bothered to reply and in Apr 2022, he got Lord True (CO Minister) to reply with the non answer, 'I would observe that the PM has not asked for an investigation'.
Aug 2021 - Lord Berkeley Briefing for Debate on standards in public life, HofL
Phase 1 - HS2 did have a detailed cost estimate of £47.2bn but denied its existence and but sought approval from Parliament for the Hybrid Bill quoting a figure of £23.5bn.
Successive ministers have misled parliament by using the lower cost figure when they knew from 2016 onwards that this was unachievable.
Parliament thus gave approval to this project, the largest one on the Government books, on the basis of a cost only half the estimate that HS2 had actually calculated but which was suppressed by DfT officials.
Maybe parliament would have approved this project on the basis of the higher estimate, but it is now abundantly clear that, over a period of five years, Ministers and officials misled parliament – not by a penny but by misquoting the actual cost by 50%.
https://www.tonyberkeley.co.uk/index_htm_files/rh210910%20draft%20speech%20for%209%20Sept%20debate%20on%20standards%20in%20pubic%20life.pdf
Aug 2021 - Lord Berkeley's second letter to Simon Case Cabinet Secretary
Lord Berkeley sends letter stating that the response from Bernadette Kelly was unacceptable & asking for a substantive response from the Cabinet Office Secretary.
https://www.tonyberkeley.co.uk/index_htm_files/rh210811%20To%20Simon%20Case.pdf
Simon Case replied that BK had responded, ref Nus Ghani & Ministerial Code it was up to the PM to decide to investigate.
https://www.tonyberkeley.co.uk/index_htm_files/rh210907%20Simon%20Case%20response%20to%20Lord%20Berkeley.pdf
Jul 2021 - Lord Berkeley's first letter to Simon Case Cabinet Secretary
Lord Berkeley sends letter with evidence that Mark Thurston, Allan Cook, Bernadette Kelly & Nus Kelly had mislead parliament, & potential fraud & misconduct in public office.
https://www.tonyberkeley.co.uk/index_htm_files/rh210709%20to%20Cabinet%20Secretary%20on%20HS2.pdfr
Simon Case passed it on to Bernadette Kelly DfT PPM, one of the person the letter accused for BK to mark her own homework yet again, BK did not address the claim ref NG, MT & AC.
https://www.tonyberkeley.co.uk/index_htm_files/rh210804%20-%20Perm%20Sec%20to%20Lord%20Berkeley%20re%20HS2.pdf
Jun 2021 – HS2 Petition
On Jun 21 2021, the HS2 petition - 'Stop work on HS2 immediately and hold a new vote to repeal the legislation' closed with 155k votes. It was debated in Westminster Hall on Sep 13 2021.
A full debate on HS2 in the HofC was requested, but it has never happened.
Jun 2021 – Bernadette Kelly Marks Her Own Homework
In a Daily Telegraph article of 14 March 2021 by Edward Malnick, Bernadette Kelly was accused of misleading parliament with regard to HS2 costs & benefits.
A DfT spokesperson said “The permanent secretary has acted fully in accordance with the civil service code at all times”
To an FOI question – “Who made the decision that Ms Kelly had "acted fully in accordance with the civil service code at all times"
The DfT responded – “The response was prepared on the basis of information provided by relevant officials and representatives of the Permanent Secretary, before being cleared by the Permanent Secretary.”
Bernadette Kelly cleared herself as to whether she was accordance with the civil service code & misleading parliament
https://www.whatdotheyknow.com/request/senior_civil_servant_accused_of/response/1803075/attach/html/4/210601%20F0019749%20Perm%20Sec%20spokeperson%20says%20response.pdf.html
Jan 2021 – FOI Reply from DfT
This FOI was first documented proof that Nus Ghani knew that HS2 was over budget & delayed 3 years, before she addressed parliament ref HS2.
https://www.whatdotheyknow.com/request/meeting_hs2_chairman_with_dft_so/response/1710337/attach/html/3/FOI%20F0019296%20Mr%20Mike%20Haville%20response.pdf.html
Jul 2020 – Letter from Lord Berkeley to HS2 Minister Andrew Stephenson on Review Points
Lord Berkeley questioning why Review Points were removed from the Development Agreement for HS2. Berkeley contends that deleting the points from a later version of the agreement removes safeguards to ensure the project stays on track and money is not wasted.
https://www.tonyberkeley.co.uk/index_htm_files/rh200714%20To%20Andrew%20Stephenson%20on%20development%20agreements.pdf
Jun 10 2020 – Letter from B. Kelly to Commons PAC
When I appear to provide evidence, I have to balance my responsibilities as a witness to Parliament, as a civil servant accountable to Ministers and acting on their behalf, and as an Accounting Officer with a responsibility to protect value for money
As the project cost to the public rose by 56%, the above statement makes no sense – Ms Kelly clearly failed in her responsibility to protect value for money
Ministers had not taken decisions on how they wished to proceed or informed Parliament on these matters. In such circumstances, I believe it would have been inappropriate for me to volunteer detailed information to the Committee, which questioning did not seek.
Ms Kelly did volunteer detailed information on the BCR, which she knew was incorrect & the Committee did seek specific information on project delays & Ms Kelly did not inform them of the known 3 year delay.
As set out above and in the NAO report, commercially sensitive negotiations were continuing with contractors throughout this period, and internal policy options to make savings were under consideration.
There is no evidence of any negotiations with contractors or options to make savings, the Stocktake was started in Feb 2019 & materially finished in April 2019 & HS2 Ltd Board Minutes / DfT communications show that presentation of the Stocktake was the only option being pursued.
Apr 19 2020 - No Ministerial Directions
Baroness Vere confirmed that no DFT Ministerial Directions have been sought by either accounting officer with respect to HS2.
Apr 7 2020 Commons Public Accounts Committee - HS2 Spring 2020 Update
Summary-
At best, the Department for Transport’s (the Department’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.
With so many peoples’ homes and livelihoods affected by the construction of the railway, there is no justification for the Department and HS2 Ltd having been so opaque about the delays and budget overruns.
Conclusions and recommendations-
1.The Department and HS2 Ltd’s lack of transparency has undermined public confidence in the programme. The Department and HS2 Ltd were aware of the scale of the issues facing the programme as early as October 2018. In March 2019 HS2 Ltd formally notified the Department that it could not deliver Phase One to budget and schedule. Despite being aware of these issues, the Permanent Secretary withheld from us that the programme was in significant difficulty when she appeared before the previous Committee in October 2018 and May 2019, even in response to specific questions about the programme’s delivery timeline and budget. HS2 Ltd’s annual report and accounts for the year ending 31 March 2019 similarly failed to give an accurate account of the programme’s problems. The Department and HS2 Ltd defended their actions, stating that there were commercial sensitivities, and that options were still being pursued to remedy the situation. While we recognise that ministers had not yet decided how to proceed, no adequate excuse was provided for not disclosing to this Committee and Parliament the risk and uncertainty the programme was facing. We are disappointed by the Permanent Secretary’s response to our concerns about her failure to explicitly inform the Committee of the programme’s delays and overspend when asked about the general health of the project. This was something that an accounting officer should share with the Committee. Failure of an Accounting Officer to provide accurate information to Parliament is potentially a breach of the Civil Service Code and a breach of Parliamentary Privilege. Lack of clarity and obfuscation about the budget issues with HS2 risks jeopardising the trust between Parliamentary committees and Government officials
2. The Department failed to provide Parliament with clear warning that the programme was going off-course and value for money was at risk. Accounting Officer assessments are a tool for providing assurance over public spending by considering whether a programme is justified against the four standards of feasibility, regularity, propriety, and value for money. HM Treasury requires that updated assessments should be produced when a programme departs from these standards or the plan agreed when the programme was first approved. A summary of each assessment should then be shared with Parliament. However, the Department did not fulfil this requirement, and failed to share with Parliament summaries of any of the four Accounting Officer assessments on Phase One of the programme made in 2019. Therefore, Parliament did not know the difficulties the programme was facing or the actions being taken in response. We are deeply concerned that the High Speed 2: Spring 2020 update Accounting Officer appeared not to know that summaries of these assessments should be shared with Parliament, despite publishing a summary on the East Coast Main Line Enhancements Programme in January 2019, and despite multiple calls from this Committee to do so in recent years.
Transparency & Oversight -
5. We questioned the Department on why it had not informed Parliament about the true status of the programme, despite the significant issues it was facing. In October 2018, the Permanent Secretary appeared before the Committee and stated that the delay to notice to update proceed to construction would not affect the overall programme She appeared again in May 2019, after the breach notice had been served by HS2 Ltd, and alluded that scope options were being examined to manage the affordability of the programme. She did not clearly set out that the programme was facing serious difficulties. In our most recent session we asked the Department and HS2 Ltd why the HS2 Ltd annual report and accounts for 2018–19 did not set out a forthright account of the programme’s status. There is no mention of delays or that costs had exceeded the budget. Instead, there were minor references to “cost and schedule pressures” leading to the revision of notice to proceed, which has allowed “better definition of the scope, cost and schedule.”
8. HM Treasury guidance states that, in addition to producing an Accounting Officer assessment for projects or programmes within the Government’s Major Projects Portfolio alongside an approval of the Outline Business Case, it is good practice to prepare an assessment for “each novel and contentious transaction or proposal”. An assessment should also be prepared if a project departs from the four standards of regularity, propriety, value for money and feasibility, or the agreed plan in terms of cost, benefits, timescales, or level of risk. HM Treasury guidance says that Parliament should be provided with a summary of the key points of an Accounting Officer assessment, which is then shared on the Government website, deposited in the Library of the House of Commons, and sent to the C&AG and HM Treasury Officer of Accounts. If the content is too sensitive for publication, the Accounting Officer should instead inform the Chair of the Committee of Public Accounts. The Department and HS2 Ltd can only authorise the start of main civil construction when certain criteria have been met, including assurance that the programme is affordable and value for moneyhttps://committees.parliament.uk/publications/1113/documents/9542/default/
Chair's comments
Commenting on the report, 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 £245 million to £1.2 billion.
Member's comments
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.
“The Permanent Secretary appeared before the committee in October 2018 and again in May 2019. In March 2019 HS2 Ltd formally told the Department it had breached the terms of the Development Agreement, and would be unable to deliver the programme to cost and schedule – yet the Permanent Secretary did not inform the committee on either appearance that the programme was in trouble.
“This is a serious breach of the department’s duty to Parliament and hence to the public, which as the report says, will undermine confidence. Furthermore, the PAC was in the dark about serious cost overruns and was therefore unable to do its duty to inform Parliament that value for money on the project was at risk.
“The cost overruns have been blamed partly on the speed that the hybrid Bill committee for Phase One proceeded with. I was a member of that committee, which lasted for 20 months: this is complete nonsense.”
High-Speed 2 project managers “blindsided by contact with reality” - News from Parliament
Mar 4 2020 - Commons PAC HS2 Spring Update – Oral Evidence
Q41 Huw Merriman: The challenge here is that when I refer to HS2’s most recent annual report, from July 2019, it reads that everything is going swimmingly. There are 95 pages and “delay” is not mentioned once. Back in 2019, everything was running to budget and going well, despite the undercurrent of issues we are talking about. Yet, all of a sudden, it just blows up. I want to ask Ms Kelly, when was the Department aware? How much of the Department was aware? Were Ministers aware of these overruns as well? Why was there such little transparency?
Bernadette Kelly: The NAO Report is very accurate and, I think, answers the question.
Q42 Huw Merriman: The NAO Report is, but I was challenging you on HS2’s most recent report, published back in July 2019, which reads very differently from the NAO Report, which was six months later.
Allan Cook & Mark Thurston passed off the 2018-19 Annual Report, with no mention of the cost increase & delays in the Strategic Report. The annual report would have been written from April onwards & was not published until July 18th & the April board minutes confirm that the Stocktake was materially finished & as such AC & MT would be fully aware of the £22bn cost increase & 5 – 7 year delay, however this was not reported in Strategic Report section of the Annual report, which is an offence under the Companies Act 2006
Bernadette Kelly:. You are quite right that we did know from that point on and all through 2019 that there were very significant cost pressures. As I say, we were pursuing actions that we hoped might lead to us finding a way to manage those cost pressures. That is the reason why Ministers did not necessarily wish to report and announce them publicly while those plans were being pursued.
There is no evidence of any pursuing of actions to manage cost pressures, the Stocktake was started in Feb 2019 & materially finished in April 2019 & HS2 Ltd Board Minutes / DfT communications & the NAO Report show that drafting of the Stocktake was the only action being pursued
Q50 Sir Geoffrey Clifton-Brown: Sorry, Ms Kelly, I am going to have to ask you a fairly direct question. You came before this Committee twice: in October 2018, when you had had the formal warning notice; and then on 15 May 2019, when you had had the formal notification that the terms had been breached. On both occasions you assured the Committee that the budget of £55.7 billion was on track. I put it to you—you may shake your head—that, in answer to question 10 on 15 May 2019, you said, “That is absolutely a key parameter and I don’t see it changing in any other way than in a spending review and quite probably not then.” I put it to you that you had serious knowledge that this project was off track and you didn’t inform the Committee.
Bernadette Kelly: I did not say that the project was on track. I said that £55.7 billion remained the budget, which it was. I think I alluded to the possibility that that parameter would need to be changed in the spending review, which was obviously something that we were contemplating internally at that point. Ministers had not determined at that point how they wanted to proceed with this project. Alternatives and options were still being pursued, in good faith I think, to see whether there were choices that could be made to bring the project back within budget around scope, and those decisions had not been concluded.
Whilst Ms Kelly is correct that she only mentioned the budget, at the same meeting on May 15 2019, she also mentioned that the BCR remained at 2.3, when her AO report from Mar 8 2024 sated that the BCR had fallen to 2.1.
There is no evidence of any alternatives & options being pursued, the Stocktake was started in Feb 2019 & materially finished in April 2019 & HS2 Ltd Board Minutes / DfT communications show that presentation of the Stocktake was the only option being pursued internally & whilst several bodies reviewed the budget externally no savings were found.
https://committees.parliament.uk/oralevidence/116/default/
Dec 16 2019 – HS2 Ltd December 2019 Board Minutes
3) Chair Report (Allan Cook)
3.2) The organisation awaits the release of the Oakervee Review. The Chairman had provided a verbal update following a meeting with Doug Oakervee at the combined Board and Executive Committee session the previous day.
Allan Cook talked to Doug Oakervee before the Oakervee 'Independent' HS2 Review was released, not really cricket.
Dec 16 2019 – HS2 Phase 1 Accounting Officers Assessment 3
Phase One is designated ‘low’ value for money by the DfT, with a BCR of 1 including WEIs.
The ‘full Y’ network, which comprises all three phases of the scheme delivers ‘medium’ value for money with a BCR of 1.6.
Nov 2019 – NAO HS2 Report – Figure 6
The Infrastructure and Projects Authority undertakes a review and concludes that, until Phase One’s schedule and budget are reset, successful delivery of the programme appears to be unachievable.
Jul 23 2019 – HS2 Phase 1 Accounting Officers Assessment 2
However, the enabling nature of the Phase One scheme means that the value for money position for the ‘Full Y’ HS2 scheme remained intact.
Despite this, the value for money category fell to ‘low’ (BCR of 1.3 including WEIs) for money category.
Jul 19 2019 – FT Stocktake figure leaked
Allan Cook, the new chairman of HS2 who took over in December last year, has written to Bernadette Kelly, permanent secretary at the Department for Transport, to warn that the entire rail project cannot be completed for the official £56bn budget. Mr Cook’s preliminary findings predict the final cost of building the line could now rise to between £70bn and £85bn, according to two people close to the HS2 project.
https://www.ft.com/content/27ab2f5c-a976-11e9-984c-fac8325aaa04
Jul 17 2019 – HS2 Stocktake formally delivered DfT
It should be noted that the HS2 Stocktake was conveniently ‘formally’ delivered to the DfT 2 days after the phase 2a debate, even though it had been materially finished 3 months prior in March / April 2019 & the DfT had received 2 draft copies in May & June.
https://webarchive.nationalarchives.gov.uk/20200204050620/https://www.gov.uk/government/organisations/high-speed-two-limited/about/our-governance#board-meeting-minutes
Jul 15 2019 – HofC HSR Debate (WM – Crewe)
HS2 spiralling costs were questioned by Jim Cunningham, Rachael Maskell, John Redwood, Steve McCabe, Ivan Lewis, Jeremy Lefroy, William Cash, Mike Amesbury, Fiona Bruce, William Wragg, Antoinette Sandbach & Owen Paterson,
Jeremy Lefroy - We started off with a figure of about £35 billion or £36 billion. The latest figure is somewhere around £55 billion. My hon. Friend and I have seen credible estimates upwards of £80 billion. Should the House not know what it is actually voting for tonight? How much will it be?
Ms Ghani (7.15pm Column 647) :- I can confirm for my hon. Friend and others that there is only one budget for HS2, and it is £55.7 billion. The bit we are talking about today, phase 2a, is £3.5 billion. The benefit-cost ratio is £2.30 for every £1 spent.
Ms Ghani was asked about HS2 costs by 14 MP’s & asked directly about current costs by Jeremy Lefroy, she misled the house by restating the current budget as if it were the current cost & lied to the house when she stated that the BCR was 2.3 when she knew it was then much lower at 1.5:1.
https://hansard.parliament.uk/Commons/2019-07-15/debates/493EDA4B-046B-4270-A747-EF3133D99573/HighSpeedRail(WestMidlands-Crewe)Bill#contribution-2AAFD6DC-69AE-4ACC-B884-7352609A06A4
Jul 10 2019 – Westminster Hall Debate
HS2 costs were questioned multiple times by Andrea Leadsom, Barry Sheerman, Andrew Bridgen, Kelvin Hopkins & Racheal Maskell
Ms Ghani - We need to ensure that we are always using taxpayers’ money properly and transparently.
HS2 will continue on track
Hardly transparent as HS2 was not on track and Ms Ghani failed to inform the debate that she had been informed 3 months before on Apr 3 HS2 phase 1 was at least £7bn over budget & delayed by at least 3 years & she had also seen the draft Stocktake delivered to DfT on Jun 7 which showed that HS2 was at least £20bn over budget & delayed by 5-7 years, but she inferred that the current cost was still £55.7bn by stating “HS2 will continue on track”
https://hansard.parliament.uk/Commons/2019-07-10/debates/D1711C1B-3AF7-492D-9802-2FF0AC25266C/HighSpeed2#contribution-1948F956-D175-4737-A1CC-71BCC8571B66
Jul 2019 – NAO HS2 Report – Figure 6
Officials provide the accounting officer and HS2 Ltd chief executive with updated advice, which concludes that Phase One is unaffordable but the value for money of the programme remains compelling.
The Department concludes that it has sufficient evidence on the revised cost forecast and schedule developed by HS2 Ltd to conclude that Phase One is not affordable within the available funding and scope requirements and that it was no longer feasible for Phase One to open in 2026.
Chairperson of HS2 Ltd provides the Department with their final report from their review of the programme.
Based on HS2 Ltd’s completed estimate, the Department approves a cost and schedule estimate for Phase One setting a range of between £31 billion and £40 billion, between £3.9 billion and £12.9 billion more than the available funding. HS2 Ltd’s point estimate is £30.1 billion.
Jul 2019 – Draft HS2 Stocktake
The latest draft of the HS2 Stocktake will have been delivered to the DfT in July as discussed in HS2 Ltd April Board Minutes.
Jun 26 2019 - HS2 Board Minutes
3 Chair Report (Allan Cook)
3.1.1 Engagement with DfT and wider stakeholders on the interim draft Stocktake;
Shows Allan Clarke discussed the Stocktake with DfT & major stakeholders, but not Commons PAC, Transport SC, MP’s & Parliament
https://webarchive.nationalarchives.gov.uk/ukgwa/20200204050620/https://www.gov.uk/government/organisations/high-speed-two-limited/about/our-governance#board-meeting-minutes
Jun 25 2019 - HS2 Phase 2a Debate (Second Sitting) – Column 45
Nus Ghani was again asked about spiralling costs & again did not inform MP’s of the known increase & answered “The total funding envelope for HS2 remains at £55.7 billion in 2015 prices. The Department is keeping a firm grip on costs, and HS2 Ltd is working with its supply chain to ensure that that continues”.
Ms Ghani would have read the draft Stocktake by this debate & know that costs were now at least £20bn over budget, so she knew that the department was NOT keeping a firm grip on costs.
https://hansard.parliament.uk/Commons/2019-06-25/debates/1a3aa6f5-cf1a-440e-877b-3a55bd8bf435/HighSpeedRail(WestMidlands-Crewe)Bill(SecondSitting)?highlight=hs2#contribution-34048D1D-B87B-4FFF-930F-740D48F19D06
Jun 7 2019 - HS2 Preliminary draft stocktake delivered to DfT
The latest draft of the HS2 Stocktake will have been delivered to the DfT in June as discussed in HS2 Ltd April Board Minutes.
https://www.whatdotheyknow.com/request/725357/response/1740820/attach/html/4/F0019437%20and%20F0019493%20Annex%20a.pdf.html
Jun 2019 – NAO HS2 Report – Figure 6
Chairperson of HS2 Ltd informs the accounting officer that there is no prospect of HS2 Ltd being able to deliver Phase One within the available funding or on time and provides the Department with a draft report from their review of the programme (Stocktake).
The Infrastructure and Projects Authority undertakes a review and concludes that successful delivery is unachievable. HM Treasury undertakes a progress review suggesting further scrutiny of risks to the programme and contingency is needed.
Major Projects Review Group (MPRG) discusses programme options to present to ministers, with a preference to maintain work on Phase One while continuing to look at ways of making savings.
May 2019 – NAO HS2 Report – 1.16
In May 2019, the Department recognised that it needed to prepare for a fundamental decision on how to proceed with the programme before the summer 2019 parliamentary recess. It assessed that Phase One could be made affordable with significant changes, including a combination of applying savings and scope reductions and securing alternative financing. The Department recognised that these changes carried risks, and would require the consent of Parliament and stakeholder support. For example, savings identified to date were based on estimates and may not be achieved and scope changes could adversely affect the value for money of the programme.
Again it is noted that if they changed the route / scope it would require a return to parliament for review – it was mentioned by Clive Maxwell & it is mentioned in the NAO report – but significantly nowhere is it discussed further. Also it should be noted that any reduction in scope would adversely affect the value for money ie the benefit cost ratio (BCR) – the largest user benefit is time saved at £39bn – as such factors such as reducing the speed, which would generate significant savings ie no slab track, cheaper tunnels & cheaper trains could not be considered or the BCR would fall well below 1:1.
https://www.nao.org.uk/wp-content/uploads/2020/01/High-Speed-Two-A-progress-update.pdf
May 29 2019 – HS2 Board Minutes
3.6.2 The team who have supported the stocktake production confirmed that there was nothing material missing or withheld in producing the draft report, but that there could always be more information to add.
The draft of the report was requested as an output for May 2019 following discussions with the Department of Transport.
Confirms that Stocktake was materially complete in early April 2019
Also, it shows that Allan Cook / Thurston / HS2 Ltd knew that they were over budget by at least £20bn & delayed at least 5 years, before April 1st 2019, in the period covered by 2018-19 Annual Report – but did not mention it in their strategic case which is fraud.
It also shows that DfT, Bernie Kelly, Chris Grayling & Nus Ghani would have officially been told that HS2 costs were > £80bn & it was delayed by 5 years, but did not pass these facts onto parliament.
https://webarchive.nationalarchives.gov.uk/ukgwa/20200204050620/https://www.gov.uk/government/organisations/high-speed-two-limited/about/our-governance#board-meeting-minutes
May 15 2019 – Commons PAC – Oral Evidence
Q8 Chair: If there is not a spending review, is there a possibility of further delay to HS2?
Bernadette Kelly: I don’t think that the delivery of the project is dependent on the spending review. The question is, when is it sensible to put into the public domain revised business cases and so on? It is more sensible to do so, obviously, when you have gone through those significant moments of public spending and everything else.
Ms Kelly did not tell Commons PAC that she knew phase 1 was 3 years late, when asked the direct question “is there a possibility of further delay to HS2?”
Q15 Bernadette Kelly: Those are exactly the assessments that are currently being made about this project—the sensible steps that need to be taken to manage cost, the impact those steps will have on the benefits and whether we are still confident that this project has a solid BCR. It has a BCR of 2.3 on current parameters, which is pretty solid.
Q19 Chair: Again, as the accounting officer for the Department, you must be looking closely at the business case to make sure that the BCR ratio that you talked about stays at a good level.
Bernadette Kelly: Correct.
Q20 Chair: Is there a point at which you would have concerns?
Bernadette Kelly: Clearly, if this project was getting close to no longer having a positive BCR, absolutely, as accounting officer, I would have concerns. As I say, given that it has a BCR of 2.3, I think you would have to see a very large increase in costs and a very large decrease in benefits to get to that point.
Ms Kelly stated the current BCR was 2.3 when she knew as of 3/4/19 knew that BCR was already lower at a maximum of 2.1 & with the figures available in the draft Stocktake she would know it was much lower & note it is Benefit COST Ratio NOT Benefit CURRENT BUDGET Ratio
https://assets.publishing.service.gov.uk/media/5f6237408fa8f5106d15640c/value-for-money-framework.pdf
May 2019 – Draft HS2 Stocktake
The latest draft of the HS2 Stocktake will have been delivered to the DfT in May as discussed in HS2 Ltd April Board Minutes.
May 2019 – NAO HS2 Report – Figure 6
HS2 Ltd estimates that forecast costs for Phase One have further increased
The Department concludes that Phase One could be made affordable within the available funding with significant changes, including a combination of savings, scope reductions and alternative financing.
HM Treasury informs the Department that it agrees HS2 Ltd should be given six more weeks to scrutinise costs for savings opportunities.
The Secretary of State directs that preparations are made for a pre-summer parliamentary recess decision on whether, and if so, how to progress with the programme.
The SofS asks for a decision on ‘whether to progress with HS2’
Apr 29 2019 – Hof C – HS2 Buckinghamshire Debate – Column 58
Nus Ghani was asked about HS2 spiralling costs by Cheryl Gillan, Racheal Maskell, Dominic Grieve, Andrew Bridgen, Jim Cunningham, Yvette Cooper & William Cash. Ms Ghani did not inform MP’s of the known £7bn increase & instead restated the current budget
“HS2 has one budget: £55.7 billion” & “There is only one budget—£55.7 billion”
Apr 3 2019 - Meeting between Chris Grayling DfT SofS and Allan Cook (Chair of HS2)
Attendees: Michael Bradley (CFO HS2 Ltd), Clive Maxwell, Nusrat Ghani
AC updated SoS on the cost and schedule position of the programme. He said that he had concluded that phase 1 could not be delivered to the current scope within the current schedule and budget. The HS2 Ltd board had been told by the exec that the latest point estimate for phase 1 was approximately £28bn, with a £6-7 billion gap in the forecast, and a 2-3 year change to the schedule. This means no contingency in the funding envelope.
SoS asked if an alternative scheme would be cheaper.
AC replied that he was unable to answer that.
CM added that assessments had been made a while ago about other options.
CM also reminded the meeting that the bill was linked to the current route.
AC added that through all the discussions he’d had, no one had suggested the current scheme was the incorrect route.
AC stated that with the current scope, HS2 could not meet the current cost and R15 schedule.
AC would be reporting to Bernadette on a monthly basis.
Clive Maxwell makes the 2 crucial points:-
- That assessments had been made a while ago about other options – ie they had already looked alternatives to save money.
- That the bill was linked to the current route
This meant if they changed the route / scope – the bill would have to be changed & that would require going back to parliament for review – did not want to risk that as by then true cost of > £88bn would be known & MP’s might vote to cancel.
It also is documented proof that Nus Ghani knew that HS2 was delayed & over budget before the HS2 phase 2a debates.
April 2019 – NAO HS2 Report
In April 2019, when HS2 Ltd’s action plan had not achieved an affordable programme, the Department and HS2 Ltd determined that HS2 Ltd required more time to try to reduce forecast costs and schedule delays.
Mar 27 2019 – HS2 Board Minutes
3.1 The Board noted that the Chairman is undertaking a Stocktake of the HS2 programme
3.3 The Board noted that there will be input into this assessment from Board Members, Executive and Management, the Department for Transport (DfT) and independent experts.
https://webarchive.nationalarchives.gov.uk/20200204050620/https://www.gov.uk/government/organisations/high-speed-two-limited/about/our-governance#board-meeting-minutes
Mar 13 2019 - Transport SC – Oral Evidence
Q46 Allan Cook: As with any complex and challenging programme, it is a large sum of money; £55.7 billion is a huge amount of money, but the cost benefits are clear for everybody to see. For every £1 we invest, we get a return of £2.30
AC stated BCR was 2.3 when he knew that was incorrect as was then <= 2.1 & that phase 1 was £6bn over budget.
Q80 Chair: But, at this moment, you are anticipating that you will be able to deliver the full scope of the project and the speed it is meant to go at, because that is being talked about. People have talked about the speed being 50 kilometres per hour less. At the moment, you are working to the assumption that the project will be delivered at the speed that is set out, on the network that is set out and to the timeframe set out.
Allan Cook: I am working to that assumption, exactly as you have said.
AC stated that they were working on the assumption of the timeframe set out (delivery of HS2 Phase 1 in 2026), knowing that he had passed onto BK that the schedule was 3 years delayed
Mar 8 2019 – HS2 Phase 1 Accounting Officers Assessment 1
Additional DfT analysis suggested a neutral BCR of 1.0 would be achieved if the current scheme scope was delivered in 2029 for £6 billion over the funding.
However, the enabling nature of the Phase One scheme means that the value for money positions for the ‘full Y’ HS2 scheme remains high (BCR 2.1 including WEIs) provided that the Phase 2a and 2b schemes could be delivered within their respective funding envelope.
This proves that by Mar 8 2019, Bernadette Kelly, Allan Cook & Nus Ghani knew that HS2 full BCR had dropped to a maximum of 2.1 : 1 & the phase 1 BCR had dropped to 1:1, before their select committee / HofC statements that the HS2 BCR remained at 2.3:1.
This also shows that Allan Cook & Mark Thurston knew that HS2 was billions over budget, before they passed off the HS2 Ltd Annual report.
https://www.gov.uk/government/publications/government-major-projects-portfolio-accounting-officer-assessments/high-speed-2-hs2-phase-one-accounting-officer-assessments-march-to-december-2019
Mar 2019 – NAO HS2 Report – Figure 6
HS2 Ltd formally notifies the Department that it has breached the terms of the development agreement because it cannot deliver Phase One on time or within available funding.
Response: The Department responds to HS2 Ltd’s formal notification of a breach of the development agreement in April. It determines that HS2 Ltd requires more time to complete its plan of actions.
The Secretary of State is advised that actions to make Phase One affordable within the available funding have not worked.
Feb 14 2019 – BBC
Mark Thurston – We have always said that we will really only know what it going to cost when we get our contractors mobilised
Thurston contradicts his Dec Panorama statement.
https://www.youtube.com/watch?v=B3uUyrIHwPk&ab_channel=StopHS2
Jan 22 2019 – Lords EAC Oral Evidence
Q5 The Chairman: So you think it will be within budget. I notice that you said you did not agree with the reports that it would be double.
Sir Terry Morgan: They have a lot of work to do.
The Chairman: You must know.
Sir Terry Morgan: I do not. Nobody knows yet.
Lord Hollick: Given that it has a funding envelope to work in, can HS2, on its own initiative, say that this is one of the measures that it has to take if it is to get anywhere near that funding envelope?
Sir Terry Morgan: This is always dangerous territory. I think, in the triangle of scope, cost and time, something has to give.
Q18 Baroness Kingsmill: It was thought that HS2 would be a high-risk proposition, there would be an overspend and there would be a failure to deliver value for money. Do you think HS2 will be delivered within the budget and on time?
Nusrat Ghani MP: I believe that Sir Terry responded to a similar question. We are committed to ensuring that we can continue to drive down costs with HS2 Ltd and that the budget will be delivered within the envelope provided at £55.7 billion.
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/economic-affairs-committee/HS2-follow-up/oral/95531.html
Dec 18 2018 – BBC Panorama Mark Thurston stated “HS2 is on time & on budget”
Mark Thurston mislead public & parliament on state of the project as previously he had stated nobody knows
https://www.youtube.com/watch?v=LCh7WIRuT1g&ab_channel=StopHS2
Oct 2018 - NAO HS2 Progress Report
HS2 Ltd’s contractors estimated that the main civil construction costs were 83% above the target price and HS2 Ltd formally notified the DfT that there were significant challenges to the affordability of the programme.
The Department informs the Secretary of State of the cost and schedule pressures on Phase One
https://www.nao.org.uk/wp-content/uploads/2020/01/High-Speed-Two-A-progress-update.pdf
Sep 2018 - NAO HS2 Land & Property Report
The NAO Report states - 2.10 HS2 Ltd told us that it did not consider it useful or value for money to create a detailed cost estimate prior to Royal Assent being granted because the Bill process would result in significant changes to the route, the scope of the project and the land and property.
https://www.nao.org.uk/wp-content/uploads/2018/09/Investigation-into-land-and-property-acquisition-for-the-Phase-One-Full-report.pdf
This is incorrect & misleading as Doug Thornton & Andrew Bruce both stated in the BBC HS2 Panorama program that they were specifically employed to create a detailed cost estimate for phase 1 property and that they have documents to prove that was there brief. It was only when they found out that the actual costs blew away the £1.5bn phase 1 estimates and then tried to pass the true figure onto the HS2 Board / DfT that they were summarily sacked.
https://www.bbc.co.uk/iplayer/episode/m002336f/panorama-hs2-the-railway-that-blew-billions
Jul 2018 - NAO HS2 Progress Report
HS2 Ltd engages consultants to help review and challenge emerging estimates from contractors where forecast costs exceed the target price and delays against schedule are forecast
From July 2018, the project representative (Figure 3) reported consistently that Phase One was not deliverable within available funding and schedule, recommending that the Department reset the programme and examine its strategic case and value for money
Mar 2018 - NAO HS2 Progress Report
Main civil construction contractors report poorer ground conditions than assumed, the need for further ground investigations and cost estimate increases.
Jan 2018 - NAO HS2 Progress Report
Main civil construction contractors report that the forecast cost of tunnels, earthworks and structures could exceed the target price.
Jan 2018 - HS2 Costs Estimated at £84bn
In January 2018, Jeremy Harrison, the HS2 Director of Risk and Assurance, gave a presentation to the Association of Project Managers that estimated the total of all contracts for the project could rise to £84 billion.
In Jeremy Harrison told the APM world that HS2 was over budget on known estimates (which were to increase significantly over 2018), this information was not passed onto MP’s
https://www.apm.org.uk/media/11724/1-jeremy-harrison.pdf
Jul 2017 – HS2 Development Agreement & Removal of Review Points
DfT Removes 122 References to Review Points 1, 2 & 3 from the updated 2017 HS2 Development Agreement
In Feb 2017 HS2 phase 1 got Royal Assent, even though it had not passed Review Point 1, although parliament might have been under the impression that it had. In the 2017 updated HS2 Development Agreement, all the 122 references to review points in the 2014 version were removed. By removing the Review Points, Ministers removed all safeguards that had been put in place to ensure the project was on track & taxpayers money was not wasted. Without that information, parliament was not able to hold the government to account.
(1) Review Point 1 for Phase One
The SoS shall grant to HS2 Ltd appropriate additional financial and/or contractual delegations for that Review Point, including to:
(a) undertake all aspects of the procurement (but not contract award) of the Delivery Contracts for Phase One
(b) implement the Land and Property Strategy, including negotiation of all land and property transactions relating to Phase One,
subject to submitting such transactions to the SoS for approval;
(2) Review Point 2 for Phase One
The SoS shall grant to HS2 Ltd appropriate additional financial and/or contractual delegations for that
Review Point, including to enter into and subsequently manage all aspects of the Delivery Contracts,
provided that all Delivery Contracts relating to the construction of any Works for Phase One include
provisions which prohibit the commencement of the construction of any Works before the issue of a
notice to proceed by HS2 Ltd (a “Notice To Proceed”) and provisions containing zero cost break clauses
which apply in the event of termination prior to the commencement of construction.
For the avoidance of doubt, HS2 Ltd shall not be granted any delegation to issue any such Notice to
Proceed until the Phase One
Review Point 3 Date
3) Review Point 3 for Phase One
HS2 Ltd shall be granted appropriate additional financial and/or contractual delegations for that Review
Point, including to:
(a) issue Notices To Proceed under the Delivery Contracts relating to the construction of any Works for
Phase One and subsequently to manage all aspects of those Delivery Contracts until the Final
Delivery Date for Phase One
(b) implement the funding regime as set out in the Funding Annex
HS2 could not even pass Review Point 1 before the phase 1 bill passed in Feb 2017, it failed on costs & timetable, from the Jan 2017 IPA Report & Patrick McLoughlin's letter to George Osborne, it was obvious that HS2 could not hold the declared £55.6bn budget & 2026 / 2031 timetable, hence it would never pass Review Point 1.
By deleting the above Review Points from the 2017 Development Agreement, the government removed the necessity for external appraisal of HS2 and the capacity for parliament to hold the government to account.
It should also be noted that in 2024 they have still not negotiated all land & property transactions & at present rate will not complete them until 2054.
Jan 5 2017 – Michael Byng Informs tells DfT that HS2 Phase costs is £53.60 bn
The HS2 Project - Phase 1 - total cost
On 21st December 2016, in a written answer to a parliamentary Question HL4189, the Government stated that the budget for Phase 1 of HS2 in its entirety was £23.5 bn. In view of my evidence, accepted without dissent by HS2 Limited, Mr Michael Hurn, then an Officer of the Department for Transport asked my for my estimate of cost for HS2 Phase 1. On 5th January 2017, I advised him that my estimate for the phase was £53.60 bn, over twice the amount within the Government Funding Envelope (GFE). In an attempt to reconcile my costs with the GFE. Mr Hurn, accompanied by Mr. John Stretch of HS2 Limited attended a meeting on 18th January 2017, in the House of Lords convened by Lord Ahmad of Wimbledon. At the meeting Mr. Stretch presented a spreadsheet summary, setting out HS2 Limited's comparative estimate of cost as £17.577 bn. At the meeting, HS2 Limited did not provide any estimates supporting the summary nor did it or the DfT offer to provide any details prior to the Third Reading of the HS2 Phase 1 Hybrid Bill in Parliament on 31st January 2017. The only comment made by DfT/HS2 Limited was that the project excluded any physical connection to HS1 at St Pancras, which were included in the drawings from which I prepared my estimate. I was able to reduced my estimate, as a result, to £47.98 bn. HS2 Limited appeared to take no notice of my evidence and the potential engineering difficulties of cost and time savings and presented its Hybrid Bill to Parliament with amending the scope of its works or its estimates of cost. HS2 Limited received Royal Assent for Phase 1 on 23rd February 2017.
Jan 2017 – HS2 Ltd IPA Advisor End of Role Report (Delivered to Cabinet Office Jan 2017)
Delivery Confidence in HS2 Ltd:
In the opinion of Paul Mansell, who has reviewed / advised / led on ten of UK s largest public sector programmes, the status of the programme is between Amber(Red and Red (using the definition of the IPA Project Assessment Review Confidence Rating ) for the following reasons:
- The delivery of its benefits to time, cost and scope, and its provision of Value for Money (VfM) objectives would be likely to be classified as failed by any internationally recognised definition of project success (academic and practitioners research as well as by PMI or APM).
- Despite the NAO and PAR s recent Reports (the well qualified teams have limited time and inside knowledge to complete their reviews) the project provides poor VfM in the short term,1-5 years. It is highly likely to significantly overspend, c20-60%, with the likely cost increasing from £57Bn to more than £80Bn, with a very high opportunity(cost impact across other government Departments.
- The project will remain fundamentally flawed unless greater transparency and frankness is provided to the true level of uncertainty and confidence variations of time, cost and benefits.
- However, the project is possibly justified on a macro-economic basis e.g. to infuse the UK economy during the turbulence of a post Brexit environment.
Specific Delivery concerns:
- HS2 Ltd is at a precarious position caused by ambitious, and potentially ill conceived, organisational re-design during a de-stabilising leadership transition period against a demanding procurement schedule.
In Jan 2017 the Cabinet Office & DfT had been advised that HS2 was probably over its £56bn budget at > £80bn, was a failed project by any internationally recognised definition of project success & were advised to be more transparent & frank.
But even after being advised that HS2 was a turkey they did not inform MP’s before the crucial 3rd vote & the HS2 Phase 1 was passed in Feb 2017.
https://stophs2.org/wp-content/uploads/2018/07/IPA-Advisors-to-HS2-Ltd-Final-Report-10-Jan-2017-v0.3.pdf
Dec 2016 – DfT Briefing
The BBC has also obtained a Department for Transport briefing note labelled as "confidential", written in December 2016.
The document acknowledges that even with planned savings "a significant gap to target price will remain".
And it says, following alterations to the scheme, phase one of HS2 would need to open a year late.
https://www.bbc.co.uk/news/business-49450297
Sep 2016 – Adam Smith Institute Rail Report
“The controversial £50+ billion High-Speed 2 project should be scrapped on grounds of excessive cost compared with the questionable benefits that may accrue. The numbers, including the projected Benefit/Cost Ratio, simply do not stack up.”
They covered the costs of HS2, the “far from compelling” capacity case for HS2, the “unacceptably low” BCR and high speed rail in other countries.
The report pointed out that the cost of HS2 is already significantly higher than other high speed projects, being 9 times the costs of similar projects in France – and that the costs are based on 2011 process, when the construction sector was in recession and prices were inevitably depressed. They say that a case could be made for HS2 costing £80 billion.
The Adam Smith report also looks at the benefit cost ratio, pointing out that
For many road projects, a BCR of c5x is generally accepted as being a viable return. As Table 7 shows, the BCR on Phase 1 of HS2 is just 1.4x, although it does rise to 1.7x once the somewhat questionable WEIs are taken into account. Nonetheless, given the considerable risks, these ratios are unacceptably low to justify HS2 on economic grounds.
Whilst many of the claimed HS2 benefits are spurious, any substantial shortfall in revenues would reduce the projected BCRs: such a shortfall could be expected to push the BCR to nearer 1.0x. Back in the 1990s, grossly optimistic projections were presented by the then Department for Transport for Eurostar’s future revenues – the eventual out-turn proved to be well short.
The WEI thesis has also been dented by the relative lack of economic recovery in North Kent, where HS1 has been in operation since 2009. Many Medway towns are still facing severe economic challenges.
https://stophs2.org/news/16081-network-fail-uk-rail-track
Sep 2016 – Andrew Tyrie writes to SofS for Transport
“We also discussed HS2. In your speech in Derby on 21 July, you made clear your support for the project, justifying HS2’s economic case on the basis of both capacity and speed. But the numbers do not support such an argument, as the Treasury Committee found when it took evidence from KPMG and a panel of academics in November 2013. HS2 has the weakest economic case of all the projects within the infrastructure programme, yet it is being pushed through with the most enthusiasm.”
https://committees.parliament.uk/committee/158/treasury-committee/news/98688/hs2-and-airport-expansion-chair-writes-to-transport-secretary/
Jun 2016 – The Unpublished Heywood HS2 Report – If anybody has a copy … ?
Daily Mail July 2017:
The £104bn HS2 cover-up: Government refuses to publish report into whether the controversial rail route should be scrapped.
Ministers were under fire last night after suppressing a key report into HS2 overseen by the country's most senior civil servant.
The review assessed whether the UK's biggest ever infrastructure project is on budget and provides value for money for taxpayers.
It was led by the Infrastructure and Projects Authority, which reports to the Cabinet Office, led by Sir Jeremy Heywood.
https://www.dailymail.co.uk/news/article-4701986/Government-refuses-publish-report-scrapping-HS2.html
Jun 2016 – NAO Report Progress with preparations for HS2
In 2013, the Committee of Public Accounts raised concerns about the ambitious timetable for High Speed 2, and today’s report states that the Department set HS2 Ltd a schedule for achieving delivery readiness that was also too ambitious. The Department and HS2 Ltd delayed the first of three formal review points – which tested HS2 Ltd’s readiness to deliver – by ten months because HS2 Ltd would not reach the required level of capability in time. By May 2016, HS2 Ltd had the capability it had planned to reach in July 2015, but did not pass review point 1 owing to concerns about cost and schedule.
“By May 2016, HS2 Ltd had met the capability requirements, but did not pass review point 1 due to ongoing concerns about cost and schedule.”
https://www.nao.org.uk/reports/progress-with-preparations-for-high-speed-2/
Jun 2016 – Oral Evidence by by Phillip Rutnam DfT PPM to Commons PAC
Phillip Rutnam stated:
“The message coming out of HS2 Review Point 1 was that the company was fit and ready to proceed with the tenders; there was no doubt about that.”
Phillip Rutnam mislead the Commons PAC by inferring that HS2 had passed Review Point 1 & failed to inform CPAC that HS2 had failed Review Point 1 due to concerns about cost & schedules.
https://www.whatdotheyknow.com/request/review_point_1
May 2016 – Patrick Mcloughlin letter to George Osbourne
In May 2016, Chancellor George Osborne received a letter from Patrick McLoughlin, the Transport Secretary, in which he admitted that the first stretch of the railway was already a billion pounds over budget.
Cost was, in the words of the then transport secretary, "a significant challenge".
The letter also reveals that, at that time, HS2 failed a critical hurdle called Review Point One.
According to a former HS2 director that "was like saying it wasn't fit for purpose".
The budget for phase one of HS2, linking London to Birmingham, is £24bn.
https://www.bbc.co.uk/news/business-49450297
April 2016 – Andrew Bruce Report
Andrew Bruce was to give a report that HS2 phase 1 property budget of £2.8bn was low by £2bn & should have been £4.8bn, he was sacked 30 minutes before the presentation to the DfT and HS2 management.
https://www.bbc.co.uk/news/business-49482701
Dec 2015 – Doug Thornton Sacked From HS2 for Refusing to lie to HS2 Board
Doug Thornton was sacked as HS2 Property Director when he refused to lie to HS2 Board of Directors.
He was told to confirm that the property budget remained at £1.5bn, when he knew from his basic investigations that the true cost was £3bn plus.
The BBC also saw a separate report by PwC, which found that “fundamental parts” of HS2’s £2.8bn cost estimate for land and property between London and Birmingham had been calculated in an “ad-hoc manner”. This figure was considered likely to rise to £4.8bn, according to two senior figures who worked in the land and property department at HS2 from August 2015 to April 2016.
https://www.constructionnews.co.uk/civils/hs2-ministers-told-cost-schedule-concerns-2016-27-08-2019/
Mar 2015 – Dan Mitchell & Andrew Bodman Petition High Speed Rail Committee
Mitchell & Bodman tell the HSR Ctte that the true cost of HS2 is £138bn.
Mr Strachan QC, 'carefully' did not challenge the figures, just referred the HSR Ctte back to the HS2 Business case.
https://www.parliament.uk/globalassets/documents/commons-committees/hs2/oral-evidence/020315_Uncorrected_Afternoon.pdf
Mar 2015 – HofC Transport Debate
Barry Sheerman MP - Many stations in Yorkshire and the north will be affected by HS2. Has the Minister seen the startling information blogged this morning by Tom Edwards, the BBC transport correspondent, that evidence to the HS2 Committee suggests that hidden costs will raise the overall cost of the HS2 project from £50 billion to £138 billion? Are the Government misleading this country about just how much this folly of HS2 is going to cost?
Claire Perry Parliamentary Under-Secretary (Department for Transport) -
I did not see the information because I was on the phone to the chief executive of Network Rail. A budget is a budget. Unlike the hon. Gentleman’s Government, this Government have a track record of bringing in major infrastructure projects, such as the Olympics on budget and on time.
https://www.theyworkforyou.com/debates/?id=2015-03-05a.1061.2&m=40204
.https://www.thetimes.com/uk/transport/article/hs2-biggest-problems-speed-route-cost-lprl0fpkc
If you have any evidence of HS2 corruption
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Please get in touch
E-mail: info@hs2-corruption.org.uk
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