HS2 review delayed over fears team behind project might fail crucial tests

Exclusive: George Osborne believes the £42.6bn railway will provide huge benefits to the North and Midlands

Critics of HS2 are furious at the cost and the impact the scheme will have on the countryside (Rex)

A vital government review into High Speed 2, Britain’s new £42.6bn railway, has been delayed because of fears that the team behind the project might fail crucial tests.

HS2 Ltd, the Department for Transport-backed team developing the much criticised service, was supposed to be reviewed by government by the end of the year. Rail industry sources said the plan was for this to be conducted in the autumn, but HS2 Ltd has confirmed these tests will not be undertaken until the spring.

The Chancellor, George Osborne, believes HS2 will provide huge economic benefits to the North and Midlands, and increase capacity at a time when the railways are under their greatest strain since the 1920s. But critics are furious at the cost and the impact it will have on the countryside. The first phase will cut journey times from London to Birmingham to 49 minutes, and the second section will form a Y-shaped route from the West Midlands to Leeds and Manchester.

Industry insiders say the importance of the delayed review is hugely significant. In its corporate plan for 2015-18, HS2 Ltd says: “We expect to pass review point one towards the end of 2015 and demonstrate that we have the organisational maturity required to move on to the next stage of the programme, specifically gaining the powers necessary to commence tendering for phase one delivery contracts.”

This is the first of three review points before HS2 achieves Royal Assent, which has been earmarked for the end of next year. At that point construction can begin, with trains due to start running on the first phase by 2026 and on the second in the 2030s.

But a senior rail industry source said: “It looks as if this review has been deferred because HS2 Ltd is not ready. They fear failing the review and that would undermine their credibility. On the government side, a failure would have also had implications over their capability of monitoring the programme.”

The review would include an assessment of whether IT and project management systems were up to scratch and consider the quality of those developing the proposals. HS2 Ltd chief executive Simon Kirby, who is the UK’s highest paid civil servant, said last month that his £750,000 salary would provide “value to the taxpayers”; 18 staff at HS2 Ltd exceed the PM’s £149,000 salary.

HS2 Ltd chief executive Simon Kirby is the UK’s highest paid civil servant, on an annual salary of £750,000

A spokesman for the Stop HS2 Action Alliance said: “The fact that HS2 Ltd is running scared of the DfT’s first review of its operations is no surprise. This political vanity project has been a shambles since the day HS2 Ltd was created by an unelected Labour peer [former transport secretary Lord Adonis] in 2009. It is high time the project was halted and a proper review of the country’s transport requirements compelled, rather than making decisions based on political expediency.”

A spokesman for HS2 said: “HS2 is on schedule and on budget. The agreed new date for completion of the review point one process now better reflects the project’s overall timetable, which remains unchanged.”

The Independent on Sunday can also reveal that MPs are likely to heap at least £100m on to the cost of the first phase of HS2. The London-to-Birmingham plan is currently about halfway through an assessment by a House of Commons committee that is listening to complaints from residents who will suffer disturbance and noise when the railway is operational.

MPs have agreed to several changes to the route already, notably a 2.6km extension to a tunnel in the Chilterns so that it extends past the Buckinghamshire village of South Heath. It is believed this has added more than £40m to the cost of the project, with other, more minor changes, taking the current additions to more than £70m.

Sources close to the committee believe these extras will ultimately end up costing more than £100m, though this will be covered by what is known as the “contingency” – money for unexpected changes that are common in major construction projects. The first phase has a £21.4bn budget, which includes contingency of around £5.7bn.

It is believed this petitioning process will carry on until the coming summer. The committee will resume hearings tomorrow, when the House of Commons gets back to business for the first time since the main party conference season. Parliament will remain in session during the Scottish National Party’s conference later this week even though, with 56 seats and a near-sweep north of the border, it has now replaced the Liberal Democrats as the third biggest party in the Commons.

The HS2 spokesman said: “Changes to the project as a result of the petitioning process will not affect the overall budget for phase one. HS2 remains on time and on budget.”