HS2 Ltd: Consultants

Question

Asked by

To ask His Majesty’s Government how much HS2 Limited paid consultants in the last year; and on which aspects of the project they worked.

My Lords, HS2 Ltd spent £77.8 million on consultancy in 2025-2026. This targeted advice was used to support the fundamental reset and its scope and cost. This is a significant undertaking in terms of complexity, pace and scale, and could not all be done in-house. Under new leadership, HS2 Ltd is being transformed into a simplified, more cost-effective company, with more than 300 back-office roles already removed and an absolute focus on delivery.

My Lords, first, I express my condolences to the family of the train driver who died in the accident last Friday, and, of course, to the relatives of those who were injured. I am not going to say any more, because that is for another day.

I am grateful to my noble friend for his Answer, but my figure for how much the Government have spent on consultants is £22 million, with a further £18 million to £19 million over the next 12 months. I have to ask my noble friend, what are they doing for their money? They are on a cost-plus contract, and the design has long since been since been finalised. What are they getting for their money apart from wasting taxpayers’ money?

I should say from this Dispatch Box that the Government, too, are immensely saddened by the events in Bedford last Friday. Our sympathies are wholly with the relatives of the deceased driver and all those affected by the accident. The Secretary of State for Transport will be making a Statement later in the other place.

In respect of the spend on consultants, the spend in the 2025-26 financial year is for a fundamentally different purpose than any money previously spent on consultancy for HS2. 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 one-third of the work has been done—is testimony to the way in which the project was managed. Getting control of it means finding out what was done, and that is what this money has been spent on.

When will we have a realistic timetable and budget to complete the works on this much-delayed railway line?

The recent Statement by the Secretary of State for Transport in the other place said that the project—with Mark Wild as the new chief executive and Mike Brown as the new chair of the new board—is now expected to cost between £87.7 billion and £102.7 billion. The first trains are now expected to run between Old Oak Common and Birmingham Curzon Street sometime between May 2036 and October 2039, and the full scheme, including Euston Station and the connection to the west coast main line at Handsacre Junction, is expected to open between May 2040 and December 2043.

My Lords, may I invite my noble friend the Minister and everyone else in the House to join me in 2037—I repeat: 2037—at the opening of HS2 to save 30 minutes getting to Birmingham? At the moment, that has cost us, as we have heard from the Minister, £102 billion. To cancel it would be £58 billion. To save further money, they are reducing the top speed by 25 miles per hour. Frankly, you could not make this up. It seems that the potential saving of some £50 billion could be better spent, not least on a few submarines. I invite my noble friend the Minister to think very seriously about cancelling this white elephant.

Right. My noble friend has come into this long-running play hopefully after the intermission but certainly after the first act. The point of HS2—you could say it is badly named—is to produce a serial improvement in train capacity between London, the West Midlands, the north of England and Scotland. That is the purpose of the scheme, and the result will be far more capacity, both on the new line and released on the old line in places such as Milton Keynes, to allow the economy of Britain outside London to reach its full potential in Birmingham, the north of England and stretching as far as Scotland. It is not just a high-speed line. You cannot judge the value of the expenditure merely on the elapsed journey time, though it is handy that the line is faster. Having started it, in whatever position it is in—we inherited it in a very bad position—the best thing to do is to finish it.

My Lords, as someone who has spent most of my life living in the north of England, I strongly agree with the Minister that we need very considerably to improve the capacity of railway lines to the whole of the north of England, north-west Yorkshire and the north-east. That clearly justifies completing the line, to Yorkshire as well as Manchester. The Minister has explained that the circumstance in which these consultants were brought in was entirely exceptional. May I tempt him, however, to talk about the Government’s use of consultants, which has expanded over the last 15 years? Does there not come a point, in dealing with outsourcing contractors and public procurement, when the Government should be insourcing some its capacity to examine what outside contractors provide, and not so often outsource it to consultants, who charge a good deal more than civil servants do?

I certainly thank the noble Lord for his clarity about the purpose of HS2. I am not the best person to stand here and talk about consultancy expenditure in government in general, but I sympathise with him about getting long-term work done, because the cheapest way of getting it done is to get people to do it on an employment basis. However, if we look at what has had to be done by Mark Wild, under the supervision of Mike Brown and the new board, we see that a company that does not know how it spent its own money and what work was done for it, in circumstances where there are currently cost-plus contracts, is in need of serious help. That serious help, frankly, can be established in the short term only with the use of consultants.

My Lords, on behalf of these Benches, I also express my condolences to the family of the driver who lost his life in the tragedy on Friday—happily, a very rare event on Britain’s railways. On HS2, one of its principal contractors has warned that the Government’s steel tariffs are “ill-timed and unhelpful” and will “exacerbate” existing challenges facing HS2. Why have the Government chosen to make HS2 even more expensive by putting these tariffs on imported steel?

Fortunately, nearly all the steel for HS2 has already been purchased so, although it suffers from many things, it will not suffer from changes in steel prices going forward. If the noble Lord looks at either social media or at pictures, or even goes to see the route, he will see that a vast amount of steel has already been erected on the route to Birmingham.

My Lords, given the purpose of HS2, why was phase 2a, running to Crewe, cancelled? It was a very short section—some 30 miles or so—and would have provided a very valuable link to the west coast main line.

The noble and learned Lord needs to look at the Benches across from me, because phase 2a of HS2, which would have run from Handsacre to Crewe and then on to Manchester, was cancelled peremptorily by one of the previous Conservative Prime Ministers at virtually no notice and without some of the consequences being either foreseen or requested afterwards. This Government are keeping the land that has already been purchased, and we are thinking carefully about what needs to be done north of Birmingham to Crewe and to Manchester.

My Lords, first and foremost, as some who uses the railway line from St Pancras to Derby, I say to the Minister that everyone shares the thoughts of the Government, and I am sure the Minister will come to the House as soon as he has any interim information on what the Rail Accident Investigation Branch reveals.

As far as HS2 is concerned, the Minister is absolutely right to say that it is more about capacity than speed, as has always been the case. However, there is no doubt that there is a huge number of lessons to be learned about how these contracts are dealt with, from some of the things that have gone terribly wrong. Bearing in mind reports in the Times last week about how much more infrastructure costs in this country than in the rest of Europe, will the Government look at those reports in detail and see what lessons can be learned?

I have the greatest respect for the noble Lord and his knowledge, and I know that he travels regularly on the Midland Main Line. I am sure that I will be standing here as soon as there are some concrete facts on the accident.

The noble Lord is right: the reports suggest that we certainly do not build major projects very cheaply. I say to him—I hope he is familiar with this anyway—that we can do large projects. The Transpennine Route Upgrade—which nobody talks about, which will cost at least £13 billion to £14 billion and is in hand now on a railway that is operating every day—is on time and on budget. It is worth reflecting that the claims that this country can no longer do these things are not correct. We can do them, but they need to be thought about and planned properly—you do not start the job until you know what you are buying—and then managed cleverly by people who know what they are doing, in partnership with contractors. The result will be that we will show that we can do a big project on the railway in the north of England.