HS2 rail project delayed by 2 years to save costs

The British government will delay building the Birmingham to Crewe leg of the HS2 rail line and its link into central London, along with a number of road projects, as ministers grapple with the impact of inflation on capital budgets.

HS2, which has long been dogged by cost overruns and delays, is being built in phases with an initial leg linking London to Birmingham already under construction.

The controversial project, which was originally envisaged as a new high-speed line linking London to Manchester and Leeds via Birmingham, has suffered successive delays, cost overruns and reductions to its scope.

The price tag of HS2 has soared from £33bn a decade ago to as much £100bn, making the project a prime candidate for savings. The opening of the first phase has already been pushed back from 2026 to between 2029 and 2033, while much of the line to Leeds has been axed.

Mark Harper, transport secretary, announced the latest delays on Thursday blaming “headwinds from inflation” caused by Russia’s invasion of Ukraine as well as “supply chain disruption” owing to the Covid-19 pandemic.

“These headwinds have made it difficult to deliver on our capital programmes and we recognise that some schemes are going to take longer than expected,” he said. “Refocusing our efforts will allow us to double down on delivering the rest of our capital programme.”

Harper said construction work on the Birmingham to Crewe leg, known as phase 2a, would be delayed by two years. It is part of the second section of the project linking Birmingham to Manchester, whose completion has already been pushed back from 2033 to between 2035 and 2041.

He also said the government would initially prioritise HS2 services from Birmingham and a new station of Old Oak Common in west London but insisted ministers remained “committed” to eventually taking the line into the central London terminus at Euston.

The FT reported last month that the government was examining further delays and cuts to the project under two initiatives dubbed “Project Silverlight” and “Operation Blue Diamond” to reduce spending over the next five years.

Louise Haigh, shadow transport secretary, said the north of England would have to “pay the price for staggering Conservative failure”.

Chris Fletcher, policy director at Greater Manchester Chamber of Commerce, understood the government’s financial constraints but said the latest cuts raised more questions about ministers’ commitment to its flagship levelling-up policy designed to balance out regional economic inequalities.

“We see the decision to delay the essential construction and further development of HS2 as a step in the wrong direction. We have already seen significant parts of the scheme scrapped or reduced significantly and further delays, dithering and uncertainty undermines any claim this government may have about taking levelling up seriously,” he said.

Rail engineer and transport writer Gareth Dennis said the delay would undermine the entire scheme and the rail network as a whole. “Had government truly committed to this project and its outcomes, HS2 trains would have been running into Manchester by the end of this decade — at costs far closer to the original budget than we see today,” he said.

Harper also announced that some road schemes would be delayed, including the A27 at Arundel and the A5036 at Princess Way in Liverpool.

Likewise, there will be a two-year delay to the construction of the Lower Thames Crossing, a road tunnel under the Thames that will be the first new crossing of the river east of London for over 30 years.

The cuts to the biggest infrastructure project come as the government grapples with a squeeze on capital spending across all departments after inflation hit its highest level in decades. Other projects set to delayed include some of the 40 new hospitals that are due to be built by 2030.