The estimated cost of building Phase 1 of HS2 – the high-speed rail line connecting London to Birmingham – has surged to between £67 billion and £81.7 billion after adjustments for inflation. This marks a significant increase from the previous year, as figures provided by HS2 Ltd to the Department for Transport (DfT) indicate a sharp 15% rise in projected costs.
The updated cost range, based on 2019 prices of £54 billion to £66 billion, reflects rising supplier costs and ongoing inflationary pressures. Notably, the budget for constructing the HS2 station at Euston is now estimated at approximately £5 billion.
The ballooning costs were revealed as the DfT announced the resignation of HS2 Ltd Chair Sir Jon Thompson, who will step down in the spring. Thompson’s departure coincides with the arrival of new Chief Executive Mark Wild, who successfully oversaw the completion of London’s Crossrail project. Wild is expected to deliver a comprehensive review of HS2’s costs and timeline in 2025.
Transport Secretary Heidi Alexander praised Thompson for providing “strong leadership during challenging times” but emphasized that Wild and his eventual successor will need to take control of the budget and ensure cost-effective delivery of the project.
HS2 Ltd's initial formal estimate for Phase 1 last year ranged between £49 billion and £57 billion. However, cost increases from suppliers, reported to the DfT in the summer, pushed estimates higher. The DfT has suggested its own internal projections may be slightly lower, disputing the HS2 Ltd figures by approximately £3-4 billion.
Rising costs have been a recurring issue for HS2, with construction challenges, inflation, and unexpected expenses – such as the £100 million “bat shed” recently revealed – amplifying concerns over project mismanagement.
Last year, former Prime Minister Rishi Sunak scrapped the northern leg of HS2 from Birmingham to Manchester, citing concerns over spiraling costs. However, political leaders in the North and Midlands continue to advocate for a similar high-speed connection to address capacity constraints and boost regional growth.
Meanwhile, Labour has pledged to allocate funds to complete tunneling work in London that was paused under Sunak, ensuring the line reaches Euston station as originally planned.
As the project faces mounting scrutiny, Mark Wild’s upcoming review is expected to outline cost-saving measures and a revised delivery schedule. The government remains under pressure to balance HS2’s financial sustainability with its potential to improve national transport infrastructure and regional connectivity.
