The HS2 high-speed railway will now cost up to £102.7bn and trains will not start running between London and Birmingham until as late as 2039, the government has admitted – £70bn more and 13 years later than originally promised.
The transport secretary, Heidi Alexander, said the truncated railway would not be entirely completed until as late as 2043.
The figure is the first official estimate of HS2’s budget in 2026 prices. Alexander said the total cost would range between £87.7bn and £102.7bn, with only a third of the rise resulting from inflation.
The first trains between Old Oak Common in west London and Birmingham Curzon Street will now start running between 2036 and 2039, with the full railway running from London Euston to join the west coast mainline in Staffordshire scheduled to be completed between 2040 and 2043.
Alexander said the forecasts were “built on solid foundations with credible estimates as ranges”, after a 15-month review conducted by HS2 Ltd’s chief executive, Mark Wild, on taking up the post.
She blamed the Conservative government for standing by and watching “the world’s most expensive slow-motion car crash”, saying that Labour had inherited a “litany of failure”.
While inflation played a part, Alexander said two-thirds of the budget increase was due to works being missed from the scope of the original plans, underestimates and inefficient delivery.
She added: “I can confirm that the previous government spent most of HS2’s budget without laying a single mile of track. That is the shocking legacy … If it seems like an obscene increase in times and costs, that is because it is. And if it seems like I’m angry, I am.”
She said the government had considered cancelling the entire project, but that “it could cost almost as much to cancel the line as finish it”.
Alexander promised: “We will deliver HS2 to completion.”
However, she said trains would be operated at lower speeds, to save about £2.5bn, reducing the top speed from about 225mph to about nearly 200mph (360km/h to 320km/h) , in line with most international standards. The original design, she said, had been “a massively overspecced folly … If we were a country the size of China I could understand it”.
The change reduces the cost and time needed for testing new trains, as well as cutting the specifications of the control and signalling system. Plans to build the line with automatic train operation – a guidance system normally only used on the busiest urban rail lines with high-frequency services – are expected to be dropped.
She said Wild and HS2 Ltd’s chair, Mike Brown, “have an almost impossible task on their hands” to turn the project around, but would be managing contracts properly with improved oversight.
Wild said: “I recognise this will be unwelcome news for local communities and taxpayers, and I share in their disappointment that it will take longer and cost more to bring HS2 into service.”
But, he added: “Resetting HS2 was the only way to regain control of the project. We have turned a corner in the last 12 months with significantly improved levels of productivity, helping us to deliver major milestones ahead of schedule.
“Better journeys, more capacity on the network, and economic growth are all vital to the country’s future prosperity, and that’s exactly what we will deliver.”
The project was first approved by the coalition government in January 2012 with a £32.7bn budget to build a Y-shaped high-speed track as far as Manchester and Leeds, and scheduled to be in operation by 2026. That figure excluded rolling stock, which is now included in the revised budget, with trains being built in the UK by Alstom and Hitachi.
High-speed services will run on to Manchester and Scotland, at slower speeds using conventional lines, once the HS2 line is connected to the mainline at Handsacre in the early 2040s.
The range in the new £87.7bn-£102.7bn budget, which excludes future inflation, is partly due to continued uncertainty over the size and shape of London Euston, which will need to be rebuilt to accommodate high-speed trains running north of Birmingham. The government hopes to partly privately finance the Euston works.
Spending on HS2 is guaranteed until 2029-30 under the spending review.
