HS2 Ltd, the government-owned company managing the ill-fated high-speed rail line between London and Birmingham, spent £77.8 million on consultants in a single financial year to determine how £46.8 billion of taxpayer money was squandered. Transport Secretary Heidi Alexander confirmed to MPs in May that the line's total cost is now estimated between £87.7 billion and £102.7 billion, but HS2 Ltd will not provide a firm figure until spring 2027. The National Audit Office has warned of 'a high level of uncertainty' around current estimates.
Consultants Hired to Uncover Past Mismanagement
Lord Hendy revealed in the House of Lords that the consultancy spending in 2025-2026 was for a 'fundamentally different purpose' than previous HS2 consultancy. He stated: 'The company was not in control of the contracts it had let, or of what work had been done. The effort to find out what work had been done for the money that has been spent - roughly two-thirds of the original budget has been spent and only a third of the work has been done - is testimony to the way in which the project was managed.'
The consultancy costs are part of a broader 'reset' expected to total £153 million, aimed at improving project management. HS2 Ltd says the reset includes 'targeted advice' to regain control. Lord Hendy added: 'Getting control of it means finding out what was done, and that is what this money has been spent on.'
Project Delays and Land Purchases Add to Costs
Construction began in 2020, but services to Euston in central London may not be operational until 2043. HS2 Ltd does not expect to have a clear completion date until next year. Meanwhile, the Department for Transport holds 18 square kilometers of land and 1,256 properties purchased for cancelled northern sections of the line, costing £643 million. Around 560 properties are to be sold, with sale costs estimated at £9 million.
The original HS2 plan was to connect London, Birmingham, Manchester, and Leeds, with an estimated cost of £31 billion to £50 billion in 2011 prices. However, repeated budget overruns led to cancellations, leaving only the London-Birmingham phase.
Government Appoints New Leadership
In December 2024, the government appointed Mark Wild, former Crossrail chief executive, to lead HS2 with instructions to get the project under control. Transport Secretary Heidi Alexander said taxpayers, passengers, and communities 'have been let down by years of mismanagement.'
Labour MP Andy Burnham, likely to become Prime Minister on July 20, is understood to have asked former Conservative West Midlands Mayor Sir Andy Street to run Great British Railways, the new publicly-owned company overseeing rail infrastructure. This role may give Sir Andy oversight of both HS2 and Northern Powerhouse Rail (NPR), a planned scheme linking Liverpool, Manchester, Leeds, Bradford, Sheffield, and York.
Concerns Over Northern Powerhouse Rail
MPs have warned that NPR could exceed its £45 billion budget because lessons from HS2 have not been learned. Clive Betts, deputy chair of the Public Accounts Committee, said: 'Our committee has heard troubling echoes of the same mistakes in loose governance that HS2 made early on, and so much of the project remains almost impressionistic, 12 years on. HS2 have even been brought on board to develop NPR’s own plans. As HS2 has been a casebook example of how not to run a major project, so their involvement in NPR does not fill us with confidence.'
An HS2 Ltd spokesperson defended the reset: 'Fundamentally resetting HS2 was the only way to regain control of the project and break the cycle of poor delivery, delays and cost increases. This is a hugely complex task – requiring a vast amount of external industry expertise - and has been carried out in parallel with an increase in productivity across HS2’s vast 140-mile construction programme. The reset is already delivering results, with six major construction milestones hit ahead of schedule last year, more than 300 back office roles removed and plans developed to save up to £2.5 billion by simplifying the railway. Any costs associated with the reset will ultimately pay for themselves through improved management and efficiencies.'
