HS2 Reset Must Succeed as Costs Double and Delays Mount, NAO Warns

Programme now estimated at up to £102.7 billion with full opening pushed back by up to 13 years, as supply chain contract renegotiations form a central plank of the recovery plan.

The National Audit Office has published a stark assessment of the HS2 programme, confirming that costs have roughly doubled since 2020 and that the full railway between Euston and north of Birmingham will not open until 2040-43 at the earliest. A partial service between Old Oak Common and Birmingham is now targeted for 2036-39.

DfT and HS2 Ltd are currently undertaking their second reset of the programme in five years, with the current reset expected to cost £153 million and complete by spring 2027. To March 2026, £46.8 billion has already been spent, including on the now-cancelled Phase 2 northern extension. The revised total cost estimate, updated in May 2026, stands at between £87.7 billion and £102.7 billion.

The NAO identifies scope change, inefficient delivery and systematic underestimation of delivery timescales as the primary drivers of cost growth – findings with direct relevance to supply chain businesses whose own programmes and commercial positions have been shaped by HS2 contracting decisions over the past decade.

Supply chain contract renegotiations are explicitly part of the reset strategy. HS2 Ltd is targeting approximately £2 billion in savings through its commercial reset, with revised contracts intended to better incentivise cost-effectiveness and avoid delay-related cost escalation. The organisation is also undergoing a structural overhaul after internal reviews found it lacked the delivery and contract management capabilities needed for the revised programme scope – a finding that has implications for how future contracting relationships will be managed.

At Euston, £3.8 billion has been spent to date, with a further £4.1 billion of public funding anticipated for the HS2 station and tunnelling from Old Oak Common. Total Euston costs will rise further once the private finance model for the station is confirmed.

One cost-reduction measure with operational consequences is the decision to reduce maximum train speeds from 360 km/h to 320 km/h, in line with comparable European high-speed services. DfT estimates savings of between £1 billion and £2.5 billion from this change, alongside a reduction in testing-related delays, though the NAO notes that longer journey times will erode long-term programme benefits by approximately £1.3 billion.

The NAO’s recommendations to DfT and HS2 Ltd are clear: do not proceed with implementing revised plans until confidence in delivery is well-founded; review the reset timetable in autumn 2025 to test whether it remains achievable; and maintain disciplined focus on cost, schedule and commercial management as the programme moves into its next phase.

For construction and infrastructure businesses with existing or prospective HS2 exposure, the reset period represents both uncertainty and a window to engage with revised commercial terms before the programme baseline is locked in spring 2027.

Capability areas relevant to this programme include: tunnelling and underground structures, railway civils and track, station design and construction, MEP and systems integration, commercial and contract management, programme controls and assurance, and private finance and infrastructure investment.