Transparency data

High Speed 2 (HS2) Phase 1: decision to continue delivery following programme reset – Accounting Officer Assessment summary (May 2026)

Updated 19 May 2026

Applies to England and Wales

1. Background

This statement has been completed following the robust cross-government assurance and approval of the new HS2 cost and schedule ranges. The government has confirmed they will complete the current scope of the HS2 programme from Euston to the West Midlands, despite the very significant increases in cost and delays to delivery.

2. Overview

In June 2025, the Transport Secretary made a statement to the House confirming the government’s commitment to delivering HS2 and announcing that she had initiated a fundamental reset of the HS2 programme. The work of the reset extends across all elements of the HS2 programme, including the programme cost and schedule, the commercial arrangements, HS2 Ltd’s capacity and capability and the operating environment between the Department for Transport (DfT), HS2 Ltd and wider government.

Over the last 12 months, HS2 Ltd and DfT have jointly undertaken a detailed review to assess the remaining scope of work, and to establish achievable cost and schedule ranges within which HS2 Ltd can deliver the remaining scope. This assessment has been produced on the basis of the proposed Phase 1 cost range of £87.7 billion to £102.7 billion (this is expressed in a mixed price base, including the costs of both works to date and future work excluding inflation) and the Phase 1 schedule ranges for Old Oak Common to Curzon Street (May 2036 to October 2039) and for Euston to the Northwest via Handsacre Junction (May 2040 to December 2043). These ranges will form the structure for a fully re-baselined programme.

This assessment has been tested with a robust cross-government assurance and approvals process on the cost and schedule ranges, aligned with the Office for Value for Money (OVfM) lessons on megaprojects and fully consistent with the James Stewart review recommendations.

As noted in the May 2026 Parliamentary Report, the Transport Secretary has accepted the recommendation to reduce the operating speed of HS2 to 320 kilometres per hour (kph), in line with leading European high-speed operating standards. HS2’s initial work on speed specifications suggests this could potentially save between £1 billion and £2.5 billion over the life of the delivery programme. This is an initial assessment that will mature further as the work is refined into a full programme baseline. This potential reduction is not therefore taken into account in this assessment at this time. It will be considered as part of an updated Accounting Officer assessment alongside the new programme baseline. However, analysis indicates the impact of the speed reduction on the full scheme benefit cost ratio (BCR) is minimal and therefore this decision is not expected to have a material value for money (VfM) impact.

3. Regularity

The cost range is the culmination of a comprehensive audit of the current position and re-estimation of the time and cost to complete Phase 1. Given the quantity of work still to be delivered and the risks inherent to the project, there remains uncertainty over cost, hence the range. NISTA, OVfM and the James Stewart review all recommend ranges as the accurate way to present outturn costs and schedule at this stage of programme delivery.

There remains legal authority to spend money on HS2 Phase 1 under the High Speed Rail (London to West Midlands) Act 2017 and the High Speed Rail (Preparation) Act 2013. Sufficient controls are in place to ensure that HS2 Ltd is exercising those powers with regularity.

4. Propriety

Phase 1 falls under DfT’s definition of a Tier 1 project and therefore adheres to the control and governance arrangements within HS2 Ltd, DfT and HM Treasury. It is also part of the government Major Project Portfolio (GMPP) and will be subject to Cabinet Office and HMT governance under that framework.

Whilst the reset is ongoing, DfT is managing HS2 Ltd through strengthened in-year controls, including challenging targets and metrics to deliver within annual budgets through a performance management plan.

The governance framework for the HS2 programme has been refreshed in line with recommendations from the James Stewart review and the OVfM study on governance and budgeting arrangements for mega projects.

This government has also committed to the continued provision of six-monthly updates to Parliament on the progress of HS2.

5. Value for money

The value for money assessment has been conducted in accordance with Green Book methodology and Managing public money principles.

This assessment is based on analysis of the decision to continue with Phase 1, assuming 10 trains per hour, against a counterfactual of cancellation of the scheme and remediation of the work carried out to date. DfT and HS2 Ltd have produced an assessment of the potential costs of cancelling the scheme, which has been used as the counterfactual for this Accounting Officer Assessment. Mark Wild, as HS2 accounting officer, provided his advice on this assessment in his accounting officer advice letter on HS2 Phase 1 cancellation and remediation costs. This cancellation and remediation cost estimate is based on a minimum expectation of delivering sites that are lawful, safe, stable, and acceptable to local communities. While optimism bias has been applied to reflect the significant uncertainties in this estimate, the assessment noted that full remediation of assets to their previous state, including demolition of nearly complete or completed structures, could incur higher costs than completing the scheme.

The appraisal includes the costs of delivering a partly privately financed Euston under a new delivery company, Euston Delivery Company (EDC). Cancellation and remediation costs that would be incurred in the counterfactual have been taken into account and sunk costs have been excluded.

This assessment reflects the latest long-term demand expectations, including the impacts of the covid pandemic and accounts for the reduced benefits from delayed opening.

On this basis, it is likely that the BCR for the continuation of Phase 1 between Euston and Birmingham Curzon Street and the West Coast Main Line at Handsacre exceeds 1.5.

In reaching an overall judgement on value for money, the strategic case for investment, wider economic impacts, non-monetised impacts and uncertainty should be considered alongside the BCR. Improving connectivity and capacity between Birmingham and London will yield wider transformational impacts, at a local and a national level. Taking this all into account, completing the delivery of HS2 between Euston and Birmingham, including Handsacre, meets the value for money requirements of Managing Public Money.

In the interest of transparency and to enable a comparison of historic BCR trends on a like-for-like basis, if current costs were known at the time of Notice to Proceed (2020), the range would be 0.3-0.4.

6. Feasibility

Resetting a major project of this scale is complex. As part of the reset, a comprehensive transformation of HS2 Ltd is needed to ensure it can take forward the reset and deliver the programme to the lowest reasonable cost. The scale of that transformation is a significant challenge for the HS2 Ltd Board and CEO. DfT is supportive of the approach taken so far and will continue to provide support and constructive challenge in this endeavour.

HS2 Ltd is continuing to strengthen its capacity and capability to deliver and better control the programme, addressing this is the priority for both the CEO and the reinforced HS2 Ltd Board. The strategy and roadmap to deliver organisational and structural transformation is being developed through 2026. The transformation plan is being developed in collaboration with support from the government and will deliver immediate interventions in critical capabilities to improve performance and control now while longer term capability to deliver the railway is designed.

DfT is monitoring this progress with enhanced governance and assurance arrangements in place, which reflect the recommendations of James Stewart’s review. Progress so far is beginning to deliver improved capability, with clear evidence of stronger clienting and contract management of the civil works.

7. Conclusion

Given the government’s policy objectives, the decision to continue investment in the HS2 programme, from Euston to the West Midlands, is in the public interest and is consistent with the requirements of Managing Public Money for the reasons set out above. The tests of regularity, propriety and feasibility are also met.