Rishi Sunak’s decision to cancel the northern leg of the HS2 railway has ended the UK’s ambition to build a high speed line linking northern and southern cities along the spine of the country.
The prime minister said he has ended the “old consensus” which focused on linking up major cities “at the exclusion of everywhere else”.
His announcement represents a drastic scaling back of the original ambitions of the project, but Sunak said its economic case had been “massively weakened” by changes to business travel patterns following the pandemic.
Instead he promised to redeploy the £36bn saved from cancelling the project north of Birmingham to fund a string of smaller transport schemes, including roads, railways and buses. Around a quarter will go towards fixing potholes.
But transport executives and infrastructure experts questioned the length of time it would take to build Sunak’s new schemes — and whether they would be delivered at all.
“There’s an enormous gap between announcement and delivery, although smaller projects are easier to control,” said Tony Travers, professor at the London School of Economics.
What is left of HS2?
Trains will now travel on high speed lines only between London Euston and Birmingham. They will then slow down and continue to Manchester and beyond on conventional rail.
Sunak confirmed that the high-speed line would link up with Euston station in central London, allaying fears the southern end of the line could have terminated at Old Oak Common in west London.
HS2 Ltd, the government body running the scheme, was stripped of its responsibilities at Euston, with work on the project paused earlier this year after costs almost doubled to £4.8bn. Instead the project will be managed by a new Euston Development Zone, which is expected to include developers and other businesses and include the construction of thousands of new homes. Sunak said this would save £6.5bn, a figure that has been questioned by some experts.
Travers said HS2 had been a “tragic case study in how not to plan and deliver public infrastructure.”
“Cancelling the Birmingham to Manchester section still doesn’t help deliver cost control on the first phase of the project and they still need to resolve that,” he said.
Why was the Birmingham to Manchester line cancelled?
Spiralling costs have overshadowed the project. Even back in 2016, the price per mile of the London to Birmingham leg was five times equivalent schemes in Europe, according to the government. The first phase of HS2 is now expected to cost more than the original estimate for the entire railway.
Construction on the first leg began in 2020 but more than half of its allocated budget — £40bn to £45bn in 2019 prices — has already been spent even though it is just three years into construction and not due to open for at least six years. If inflation was taken into account that cost would jump to £57bn, according to FT calculations.
The escalating costs — and the lack of transparency around them — overshadowed the second phase of the project, which would have taken the total price to well over £100bn.
HS2’s backers argue that the line would have sped up journey times between some of the UK’s largest cities and freed up room for other trains on current tracks.
But a report by the House of Lords Economic Affairs select committee in 2015 said overcrowding on the west coast mainline was mostly confined to Friday evenings and weekends and could be resolved through fare changes and other smaller improvements.
The pandemic also reduced train travel, with passenger numbers still around 20 per cent lower than pre-Covid levels as people work from home. Business travel — which was expected to account for around half of the benefits — has been even slower to recover.
A Downing Street spokesperson said that as a result, the business case for the project had changed, now only providing 80p for each pound spent instead of £2.30.
Although more than £2bn has already been spent on the northern phase of the project, work remains at an early stage, with key design issues still to be resolved and most contracts yet to be awarded.
Stephen Glaister, professor of transport and infrastructure at Imperial College London, said that the estimated £2,300 cost in taxes per household for the entire HS2 railway over 20 years when it was costed at £100bn in 2020 meant the government has to “show solid evidence of good value for all that money”.
What will replace the northern leg of HS2?
The prime minister announced a slew of rail, tram and road upgrades, as well as bus improvements, under the banner Network North — although not all of them are in northern England.
But around £20bn of the HS2 savings will be spent on projects in the north, including a new £2bn station in Bradford, one of the country’s worst-connected cities.
A number of rail lines will be electrified, including between Leeds and Hull, a scheme northern leaders had originally pushed for as part of the Northern Powerhouse Rail high speed project, which was scaled back by the government last year.
The government also confirmed £12bn of existing money that was allocated in its 2021 integrated rail plan for better connections between Liverpool and Manchester will remain in place. Mayors in the two cities are expected to be given the option to rework existing plans for improved rail links.
Leeds, the biggest European city not to have a mass transit network, has been promised £2.5bn in future funding for that goal.
However, infrastructure experts said the new projects could take years to be delivered. “We can expect that Northern Powerhouse Rail, for example, will take at least five years to come out of the ashes of HS2 Phase 2B and to be approved before it’s ready for construction contracts to be let,” said Robbie Owen, partner at law firm Pinsent Masons.
Further south, the Midlands will receive just under £10bn of the HS2 savings, including £1.75bn towards the Midlands Rail Hub plan to upgrade rail links across the region. Some railway lines cut under the Beeching programme of the 1960s will also be reopened.
West Midlands mayor Andy Street, a vocal critic of the decision to axe the northern phase of HS2, is to receive a further £1bn for his transport budget.
A number of the rail projects had been previously mooted by government, including in 2021’s Integrated Rail Plan, but the funding had not been committed.
Away from rail, the government will cap bus fares at £2, originally introduced as a temporary post pandemic measure, until the end of 2024. It will also provide funding for bus infrastructure and increased services in some parts of the country.
Seventy road upgrades are also included in the plan including works to alleviate key pinch points and upgrade the A1, A5 and M6, as well as £8.3bn towards pothole repairs.