Has the UK government done enough to get HS2 back on track?

The UK’s flagship rail project, High Speed 2 (HS2), has been widely spoken about in the media for its struggle to keep to a budget or schedule.

The government and project team have been working to reset the project, including fully accepting the 89 recommendations set out in an independent review of HS2's governance settings.

A new report, as well as updated cost and schedule figures, shed further light on the challenges the project continues to face – and how HS2 Ltd intends to deliver it.

The new cost of HS2

The government now expects HS2 to cost between £87.7 billion and £102.7 billion (in 2025 prices).

Its first services are expected to begin running between May 2036 and October 2039.

Trains from Euston to Handsacre Junction are then expected to begin operating between May 2040 and December 2043.

This is a substantial jump from the £35 - 45 billion (in 2019 prices) budgeted for by the last government. HS2 Ltd has already spent close to its original budget.

About one third of the cost increase on the project can be attributed to inflation, which hadn’t previously been priced into cost updates.

Two-thirds can be attributed to necessary works that were missed from the scope of the original project plan, under-estimation and inefficient delivery.

So why not just cancel the project?

Mark Wild, HS2 chief executive, has set out the reality that the cancellation and remediation costs would be between £33 billion and £58 billion compared with the £46.8 billion to £61.7 billion left to spend (as of October 2025) to complete HS2.

Cancelling the project would cost almost as much as building the rest of it and deliver none of the benefits.

What went wrong?

Multiple reviews to date have reflected the issues the ICE highlighted in 2024: a lack of clear objectives, shifting political priorities, and insufficient time spent in development, which led to unrealistic cost estimates.

Led by James Stewart, a former Infrastructure UK chief executive, the Stewart review found that budget control on the project was undermined by HS2 Ltd’s consistent inability to produce reliable cost and schedule estimates.

And the latest report, produced by Sir Stephen Lovegrove, builds on James Stewart’s work to draw further lessons for the wider civil service.

What is HS2 Ltd doing about it?

The focus is now on removing complexity from the project to drive down cost and get the line open more quickly.

The government has shared that to the end of February 2026, £43.6 billion (nominal prices) has been spent on the HS2 programme.

And the latest project update outlines key changes that have been made to improve cost and schedule estimates:

• trains will run at 320kph rather than 360kph, aligning the project with other high-speed railways around the world;
• automatic train operation plans will be abandoned in line with previous recommendations for the project; and
• signalling will now align with the wider network, making integration easier.

A culture of ‘gold plating’ has driven up costs on the project which has been dominated by a desire to ‘build the best’.

The UK doesn’t have tracks which would support testing 360 kph trains. So, a specific railway would have to be built, or the trains would have to be sent overseas to be tested. Both these options would have been very costly.

Work will continue to reduce future spending and implement the recommendations from the Stewart and Lovegrove reviews.

But takeaways from the reports are already shaping how the project is approaching its ‘reset’:

Critical governance failures…

The scale and complexity of mega-projects like HS2 mean they need a bespoke governance model.

The National Audit Office drew a similar conclusion in a 2024 report.

Problems with the governance structure on HS2 included:

• blurred accountabilities
• failing to evolve as the project moved from design to construction
• a lack of protection from political interference

The latter point meant key decisions were driven by schedule rather than cost control as politicians sought to keep up momentum early on.

The project was therefore pushed forward before the design was mature enough.

As the ICE also pointed out in its paper, this was critical because the conceptual stages are where most value can be achieved.

…and the wrong structure to start with

Lovegrove goes even further, showing how HS2 Ltd, the company charged with delivering the project, wasn’t well set up to begin with.

The delivery body was created as a ‘company limited by guarantee’ with the UK government as its sole guarantor.

The London Organising Committee of the Olympic Games was also set up like this, but most of its revenue came from private sector sponsorship.

Lovegrove argues that for HS2, where all its funding has come from government, this structure was ill-suited.

As a result, the project lost a clear sense of ownership. Government representation on HS2 Ltd’s board was inadequate, and the executive leadership team instead acted with a false sense of independence.

Commercial discipline and the ability to robustly challenge project decision-making were also lost.

A new approach

The Stewart report recommends a new governance structure – including a new programme board with independent members, and specialist sub-boards.

More broadly, the system of government in which HS2 operates needs to be adapted.

Changes should include five-year funding cycles for the project, and the flexibility to move money between years.

Many of these lessons have already been taken on board by the project team, including the creation of a shareholder board of which James Stewart is a member.

And the relationship between the Department for Transport (DfT) and HS2 has shifted to one of ‘radical transparency’, according to Mark Wild.

Trust and capability

The scale of cost overruns has also undermined trust between DfT and HS2 Ltd.

Lovegrove is clear that the DfT’s oversight of HS2 failed. The civil service did not have the depth of capability to oversee the project.

And an overreliance on consultants meant that expertise and private sector experience weren’t embedded in the client team. Public sector leadership training was inadequate in filling the gap.

Stewart’s report also notes the impact of negativity around the project on workforce morale and its ability to retain talent and skills.

The balance between criticism of the project and support for it needs to be restored.

The civil service can incentivise generalist skillsets, gained by moving roles regularly, instead of technical expertise gained over many years in a few positions. Key skills – like contract management, procurement and negotiation and technical integration – are often too thinly spread as a result.

There are plenty of opportunities to take Lovegrove’s insights forward to ensure that civil service capability doesn’t affect future megaprojects to the same degree.

Next steps for HS2

The Stewart report was published alongside Mark Wild’s initial assessment of the project and how it can be reset.

He sets out four priorities:

• optimising how the HS2 line will operate from day one
• developing a new commercial approach to regain control of the major contracts
• developing a new, cost effective, simpler HS2 Ltd organisational structure
• resetting HS2 Ltd’s relationship with the government

He has committed to completing this by April 2027.

In practice, this will include new relationships with the project’s supply chain, improved capabilities, and a detailed budget. The latest cost and schedule update will act as the foundation of that work.

Ahead of this, the project will complete its first baseline review in the autumn this year.

Part of this work includes moving to a new assurance regime, with fewer layers of approvals supported by better expertise.

The government will respond to the Lovegrove review’s findings, but has yet to give a timetable for that.

Euston station

The government has already committed to funding HS2 through to London’s Euston station.

The Stewart review noted the urgency of developing a delivery plan and agreeing on funding and the governance structure.

In the 10-year Infrastructure Strategy, the government says it will explore the use of public-private partnership (PPP) models to fund the station.

Wider lessons and NISTA’s role

The Stewart report is the latest to point out the UK’s poor track record on delivering infrastructure over the last 10 years.

It adds that the better performance of the regulated sectors, especially energy, shows that private funding and leadership should have a key role in delivering public sector infrastructure.

The report also looks at the opportunities arising from the creation of the National Infrastructure and Service Transformation Authority (NISTA).

NISTA has been asked to provide overall leadership of delivering the UK’s infrastructure programme, as the report recommends.

Stewart says the government should consider appointing a specific minister for infrastructure and construction.

The report makes further recommendations for NISTA, including:

• To review the capacity and capability of the civils construction sector, including what is needed, how to build capacity and the relationship between design and construction.
• Establish a team of commercial/delivery specialists to support the public sector in the delivery of infrastructure projects.
• Develop an Infrastructure Capability Plan to increase the pool of infrastructure talent in the UK.
• Review how delivery capability can be built, retained, shared and transferred from project to project.

Lovegrove also points to NISTA’s role in assurance processes.

However, the scale of the task means these will have to be prioritised and staggered.

How this is done will be crucial as the government looks to deliver its 10-Year Infrastructure Strategy.