Taxpayers took a hit of more than £2billion from the decision to scale back HS2, it was revealed today.
The body’s latest annual accounts showed that more than £1billion was written off in design, preparation, initial and environmental works for the Birmingham to Manchester phase.
More than £800million is expected to be lost from revenues that will not appear from the project – which was dropped over fears costs were spiralling out of control.
Downgrading plans for Euston from a 10-platform station to six meant tearing up all the design work, which had cost nearly £153million. In total HS2 Ltd has recognised a £2.171billion loss following the move by Rishi Sunak last Autumn.
There are rumours the Labour government could be about to ditch the Euston plans altogether.
Rishi Sunak declared he was cancelling the northern leg of HS2 between Birmingham and Manchester during his keynote speech at last year’s Conservative Party conference
Mr Sunak blasted the project’s ballooning costs and promised to plough the saved clash into hundreds of new transport projects across the North and Midlands
The 2023-24 accounts also detail payments around the departure of former chief executive Mark Thurston in September last year.
Announcing that Mr Thurston was stepping down from his £670,000-a-year job last July – before the cancellation of phase two – then-transport secretary Mark Harper said he had ‘successfully overseen the start of construction and driven the project to full scale’.
The accounts said: ‘Before leaving HS2 Ltd on September 30 2023, Mark Thurston received £289,621, which includes amounts for a payment in lieu of notice and annual leave adjustments.’
Over the financial year as a whole Mr Thurston received £652,569, down from £676,763 in 2022-23.
Mr Sunak declared he was cancelling the northern leg of HS2 between Birmingham and Manchester during his keynote speech at last year’s Conservative Party conference.
The then-PM blasted the project’s ballooning costs and promised to plough the saved clash into hundreds of new transport projects across the North and Midlands.
An HS2 spokesman suggested other bodies could still gain benefit from the spending.
‘We are required to declare spending on the project that HS2 Ltd is no longer expected to gain any economic benefit from,’ the spokesman said.
‘In this case, losses relate entirely to work delivered on the northern phase of HS2, which was cancelled by the previous government, and the former design of the high-speed station at Euston.’
On Mr Thurston’s remuneration the spokesman said: ‘This is a highly technical project on a huge scale and it is necessary to employ people with the right level of expertise and skill to deliver it successfully.
‘HS2 Ltd is committed to controlling costs and takes its responsibility to ensure taxpayers get value for money very seriously which is why, despite cost pressure on the overall programme, the company continues to operate within its annual budget.
‘HS2 Ltd agreed Mark Thurston’s departure from the company in line with his contractual terms and we thank him for his six years of leadership.’
Last week a report from Whitehall’s spending watchdog laid out that, prior to the scrapping, HS2 Ltd had estimated the total costs of ‘Phase 1’ – the London to Birmingham leg that is still being built – would be £49billion to £57billion, in 2019 prices.
That compared to the Department for Transport’s estimated cost of £45billion to £54billion. The NAO said both of these estimates were above the project’s current funding of £44.6billion.
The 2023-24 accounts also detail payments around the departure of former chief executive Mark Thurston (pictured in 2022) at the end of September last year
Its report also found that closing down ‘Phase 2’ of HS2 – the Birmingham to Manchester leg – would take three years to complete at a cost of up to £100million.
The NAO warned Brits will need to be incentivised not to travel by train due to the decision to scrap the northern leg of HS2, as there will be fewer seats than now.
This was despite the initial aim of HS2 having been to boost Britain’s rail capacity.