Is the budget for HS2 out of control?

published 21 July 2017

This week the government announced the award of £6.6bn worth of contracts covering most of the engineering work for the HS2 high-speed line between London and Birmingham, including tunnels and bridges. At the same time international expert Michael Byng has published a report "estimating that each mile of the initial section will cost over £400m, almost twice the official figure", says the FT. He claimed that this would "result in a £104bn price tag for the full project" in contrast to the government estimate of £55.7bn itself double the estimate when HS2 was first mooted.

The project "is important because Britain's railways are reaching capacity", says The Times. Indeed, "both the east and west coast main lines are now so busy that any breakdown or delay can disrupt thousands of passengers for hours". Even if the trains were running at normal speeds, "the extra routes to the north would be needed". So it's a pity the government has let the project "race through common sense, fiscal controls and public support", with the result that it is expected to be "the most expensive railway in the world". Westminster "needs to get a grip"... and "enforce financial discipline".

HS2 fans have talked of a "jobs bonanza", adds Nils Pratley in The Guardian, but can't this be delivered more cheaply in different ways? Indeed, most people "would happily settle for a conventional railway to expand capacity on the west coast if the savings could be spent on the NHS" or "a serious housebuilding programme".

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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