HS2 services to Euston at the southern end and to Manchester and Crewe to the north are being deferred. Billions of pounds worth of roadbuilding is being delayed too.
The government insists that it will still spend the £40bn promised to transport infrastructure over next two financial years, but the money will not stretch as far as previously thought.
Inflation, said transport secretary Mark Harper, had “made it difficult to deliver on our capital programmes, and we recognise that some schemes are going to take longer than expected”
Therefore the focus of HS2 will be completing the section between Birmingham and Old Oak Common in west London. Everything else is being pushed back by at least two years.
The transport secretary told the House of Commons: “The government are prioritising HS2’s initial services between Old Oak Common in London and Birmingham Curzon Street to provide delivery of passenger benefits as soon as possible. We remain committed to delivering HS2 services to Euston, and will address affordability pressures to ensure the overall spending profile is manageable. We will therefore take the time to ensure we have an affordable and deliverable station design, delivering Euston alongside high-speed infrastructure to Manchester. We continue to take the High Speed Rail (Crewe - Manchester) Bill through Parliament, and the Crewe-to-Manchester section will also form the foundations for improved rail services in the north through Northern Powerhouse Rail.”
He added: “The government are committed to delivering HS2 Phase 2a between Birmingham and Crewe. We have seen significant inflationary pressure and increased project costs, and so we will rephase construction by two years, with an aim to deliver high-speed services to Crewe and the north-west as soon as possible after accounting for the delay in construction. Work continues on progressing commitments made in the integrated rail plan to develop HS2 East, the proposed route for HS2 services between the west and east midlands, and to consider the most effective way to take HS2 trains to Leeds.”
Road building is also significantly affected, with major projects expected to start before 2025 (during the five-year period know as road investment strategy 2, or RIS 2) being pushed back to RIS 3 (2025-2030).
Road projects affect include the £320m A27 Arundel bypass project, which Bam Nuttall’s Linkconnex consortium had been expecting to start by April 2024. Mace, which is building the new Euston station with Dragados, is Bam Nuttall's partner on the Arundel bypass too, making it doubley affected by the delays.
Also being bumped from RIS 2 to RIS 3 is the A5036 Princess Way scheme in Liverpool, a £335m scheme to improve access to the Port of Liverpool. Kier is the main contractor for this project.
Schemes planned for RIS 3, including the (even more controversial) £9bn Lower Thames Crossing, are set to be bumped into RIS 4, beyond 2030.
“Given many of these schemes were previously expected towards the end of RIS 3, this extra time will help ensure better planned and efficient schemes can be deployed more effectively,” said Mr Harper, seeking silver linings.
Given the local opposition faced by these schemes, deferral beyond the next general election may also have political dividends for the current regime. A different lot is likely to have to take the flak.
“To date we have spent over £800m on planning the Lower Thames Crossing," Mr Harper said. "It is one of the largest planning applications ever, and it is important we get this right. We remain committed to the Lower Thames Crossing, and the development consent order process will be an important opportunity to consult further to ensure there is an effective and deliverable plan. In order to allow time for this process, and given wider pressures on RIS, we will look to rephase construction by two years.”
He concluded: “These are the difficult but responsible decisions we are taking, that put the priorities of the British people first, in controlling inflation and reducing government debt. They continue our record investment into our national infrastructure, which will continue to play a vital role in growing our economy and delivering long-term prosperity.”
The government press office did its credibility no favours by headlining the announcement of the transport projects review: Transport Secretary sets out record investment plans for transport network, deliberately completely missing the point.
Industry reaction
A spokesperson for the High Speed Rail Group said: “The cheapest way to deliver HS2 is quickly. Every cost element that make up HS2 rise each time the project is delayed. Constant uncertainty in government breeds uncertainty in industry which does nothing to ensure efficient delivery.”
Stephen Marcos Jones, chief executive of the Association for Consultancy & Engineering (ACE), said: “I think every sensible person knows that global events have driven inflationary pressures to record highs. But we have already spent significant sums on the design and delivery of this transformational major project. Scaling back ambitions at this stage will mean the economic and social benefits of HS2 for communities across the UK is further watered down – and major delays like this are actually going to cost more in the longer term. In a nutshell, the delays are quite simply an absolutely false economy.”
John Foster, of the Confederation of British Industry (CBI) policy unit, said: “The HS2 network will connect eight of the nation’s 10 biggest cities, creating jobs, opportunity and prosperity throughout the country whilst at the same time playing a key role in reducing road emissions and congestion.
“Having been subject to significant revisions and years of uncertainty, business will at least have the clarity needed to enable them to plan effectively. But this news will ultimately reduce investor and contractor confidence in the rail sector.
“To mitigate further loss of confidence, it is critical that government tackles the inflationary pressures which are biting hard across the infrastructure sector. Delays to projects may create short-term savings, but they can ultimately lead to higher overall costs and slow down the UK’s transition to a better, faster and greener transport network”.
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