Costs of HS2 'vastly underestimated', whistleblower says

‘I’m not worried about overspending, I’m confident we’ve got a budget we can stand by,’ said HS2’s chief executive

Property puzzle: the cost of buying land and buildings along the HS2 route is still not known (HS2/PA)

The cost of the High Speed 2 (HS2) rail project, intended to increase capacity between London, the Midlands and the north of England, is under fresh scrutiny.

In a BBC Panorama programme, a former HS2 executive has claimed that early estimates of the value of properties along the route that needed to be bought were “enormously wrong”.

Doug Thornton, former land and property director, said the figures underestimated the amount HS2 would have to pay, and that “thousands” more properties had not been budgeted for at all.

He told the programme’s presenter, Justin Rowlatt: “I have never seen anything like it.”

Mr Thornton said he was “appalled” at the “loose and slapdash fashion” that numbers were used. He said he walked out of HS2 “one Wednesday evening and breathed a sigh of relief” in 2015.

He was later dismissed by the company.

The first stage of HS2, which is the biggest civil engineering project in Europe, requires 27 square miles of property to be purchased.

According to a recent National Audit Office report, the HS2 estimate of the net cost to acquire land and property for Stage One was £1.12bn in 2011 prices, but by 2017 it had risen to £3.3bn in 2015 prices.

The report concluded: “HS2 Ltd’s current estimate is within its agreed funding envelope from HM Treasury and provides a reasonable basis from which it can monitor the potential cost to compensate property owners and tenants affected by the construction of the railway.”

HS2’s chief executive, Mark Thurston, told Panorama: “I’m not worried about overspending, I’m confident we’ve got a budget we can stand by.”

Earlier this month Sir Terry Morgan, who was chairman of both HS2 and the troubled Crossrail project, resigned. He warned of possible cost issues ahead for HS2, talking of the “challenge inside the project” to stay on time and on budget.

The first stage of the line, from London Euston to Birmingham Curzon Street, is due to open in 2026. It has a budget of £27bn. Going north from Birmingham there will be a Y-shaped layout, with the eastern branch going to the East Midlands, Leeds and York, and the western branch to Manchester. Stage two is planned to cost £29bn, making the total bill £56bn.

But an industry expert, Michael Byng, last week calculated that the whole £56bn would be swallowed up for the first phase of the line between London and Birmingham.

In response the transport secretary, Chris Grayling, said: “I’m very clear on HS2 – it’s got a budget, it’s got to live with that budget.”