Britons may need to be put off taking trains due to HS2 curtailment, watchdog says

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Ministers may need to put Britons off taking the train between Birmingham and Manchester because the decision to axe the second phase of HS2 means there will be fewer seats on existing rail services, parliament’s spending watchdog has warned.

The HS2 findings were contained in one of a dozen reports by the National Audit Office released on Tuesday, which will fuel Prime Minister Sir Keir Starmer’s claim that he is being left to clear up “a mountain of mess” left by the previous Conservative government.

Among the NAO’s other findings is a warning that the NHS in England may “break” before it can meet standards expected by patients and that ministers have tried to clear an epidemic of potholes without having “a good enough understanding of the condition of local roads”.

Chancellor Rachel Reeves warned cabinet colleagues on Tuesday that “difficult decisions” would have to be taken in her autumn Budget to restore order in public spending, with the Conservatives claiming she is softening up the country for significant tax rises.

In perhaps the most eye-catching report, the NAO said former prime minister Rishi Sunak’s decision to axe the northern leg of HS2 may force the government to incentivise people to avoid using trains.

The watchdog said scrapping the northern leg of the flagship high speed rail link would take three years and cost up to £100mn, and that some platforms would still be built even though they would never be used.

New custom-built HS2 trains that will run on the existing tracks north of Birmingham when the link becomes operational could result in 17 per cent less capacity than existing stock, the watchdog said in a report on Tuesday.

As a result, the government may need to manage demand by “incentivising people to travel at different times or to not travel by rail”, the NAO said, as it urged a “proper reset” of the scheme to ensure value for money.

HS2 is Britain’s biggest and most contentious infrastructure project. It has been beset by delays, cost overruns and conflict of interest scandals.

Last October Tory leader Sunak, then prime minister, scrapped HS2’s northern leg, claiming £36bn could be saved and put into better-value rail, bus and road projects, including filling in potholes.

More than £30bn in 2019 prices had been spent on the rail link as of March this year, the NAO said, with £592mn of land bought for the project no longer required.

But the Department for Transport and HS2 Ltd, the company in charge of the project, disagree over the final cost, even though all the estimates forecast it will exceed the current budget of £44.6bn.

The NAO’s warning of a potential drop in capacity comes after the National Infrastructure Commission in May forecast soaring demand on the axed northern leg.

The government’s top infrastructure adviser estimated passenger arrivals in Birmingham and Manchester could be up to 61 per cent and 50 per cent above pre-pandemic levels respectively by 2045.

The NAO said new platforms at Birmingham’s Curzon Street station would still be built but never be used because it was more expensive to cancel their construction.

The watchdog also said Whitehall still lacked a clear plan for HS2’s terminus at Euston station; the transport department had yet to decide on “scope, funding or governance” for the central London station.

The department was pressing ahead with plans for a “new delivery model” that would involve the private sector paying for the tunnel and station in exchange for housing and commercial developments on the site, the report said. But the “DfT expects it may be several years before it could put all arrangements in place”, it added.

Until Euston opens, HS2’s London terminus will be the new station under construction at Old Oak Common in the north west of the capital. HS2 passengers will have to transfer on to the Elizabeth Line or Great Western Railways to reach the city centre.

HS2 Ltd said: “This is a project of unprecedented scale and complexity, and the cancellation of Phase 2 has increased our cost challenges.

“We are now making sweeping reforms to control costs better and deliver the next stage of the programme — passing peak construction between London and the West Midlands, and starting the transition to a working railway,” it added.

Transport secretary Louise Haigh said the Conservative government had “recklessly mismanaged HS2 and allowed the costs to spiral entirely out of control — but this report lays bare the scale of their mistakes.

“We are reviewing this report’s findings, alongside the position we have inherited on HS2 and wider transport infrastructure and will set out next steps in due course,” she added.