Transport Committee
Oral evidence: HS2: progress update, HC 641
Thursday 18 May 2023, Buckinghamshire
Ordered by the House of Commons to be published on 18 May 2023.
Members present: Iain Stewart (Chair); Mr Ben Bradshaw; Jack Brereton; Ruth Cadbury; Paul Howell; Grahame Morris; Gavin Newlands; Greg Smith.
Questions 138 - 244
Witnesses
I: Mark Thurston, Chief Executive, HS2 Ltd; and Huw Merriman MP, Minister of State for Rail and HS2, Department for Transport.
Witnesses: Mark Thurston and Huw Merriman MP.
Q138 Chair: Welcome to this session of the Transport Select Committee. As you will notice, we are not in our usual House of Commons committee room but at the rather splendid Buckinghamshire Railway Centre. I offer my thanks and those of my colleagues to Buckinghamshire Railway Centre for hosting us today. This session is one of our regular six-monthly scrutiny sessions of HS2 Ltd, but today we are also joined by the HS2 Minister, Huw Merriman, who is here to answer any questions of policy from the Government side.
Before we start, I also extend my thanks to the local councillors and residents who we met earlier today to get some first-hand evidence of the impact that the construction of HS2 is having on the local communities. We are very grateful for their time this morning.
First, for the purposes of our records, I will ask our two witnesses to state their names and organisations, please.
Mark Thurston: Good afternoon. My name is Mark Thurston. I am the Chief Executive of HS2 Ltd.
Huw Merriman: Good afternoon, Chairman. I am Huw Merriman. I am the Minister for Rail and HS2.
Chair: Thank you. We will come on later in the session to some of the more high-level strategic issues with HS2 Ltd, but I want to start the session by focusing on some of the local and community issues that we have identified this morning and previously. I invite my colleague Greg to open up the questioning for that.
Q139 Greg Smith: Good afternoon, Mr Thurston and Minister. As the Chairman indicated, this morning the Committee met with representatives of numerous parish councils in and around the HS2 and East West Rail construction areas and a number of farmers, landowners and business owners who have been affected by land take and treatment by HS2 Ltd and contractors in this process. My opening question to you, Mr Thurston, is a simple one. How do you think you are doing on community relations?
Mark Thurston: Thank you, Mr Smith. I think we should not shy away from the fact that certainly in the early days of the project, there was quite a lot of ill feeling around HS2 in Buckinghamshire. We are very well aware of that in HS2, and of course businesses or anyone who finds themselves living or residing in property along the line of the route did not choose to be there. Our job at HS2 is to find a way of delivering the will of Parliament and delivering the scheme in a way that is sensitive to local people.
I think that we have made huge strides in the way we do community engagement. All local parishes and local MPs right along the route have dedicated points of contact. I have made it a clear objective not just of my organisation but of all our principal contractors that as much as we want them to do the job safely and on time and on budget—recognising it is all being funded from the public purse—respecting people and places, putting the community front of mind when they are thinking about planning and executing the work is essential. It gives us our licence to operate. Having spent a good couple of hours here this morning—I have been here several times—and seeing where we have got to it, it is clear that we are very visible. That will remain the case for I think at least another couple of years for the main civils works, but I think we have come a long way in the way in which we engage.
Our contractors are doing a lot of work with the local communities to try to soften the impact. The property compensation scheme—to your point about landowners—is an important part of the powers under the Act, and we have to make sure that we discharge our responsibilities there as well in a sensitive way. Of course, we won’t get that perfect every day. I am not naive enough to sit here and think that with the best part of 25,000 people in the field over 150 miles between London and Birmingham, people’s experience is what I want it to be every single day. We will continue to strive to get that as right as we can.
The important thing, particularly in this community, having seen, as the Committee did earlier today, the EKFB site—we have gone through the first and we are now in the second of three major years of construction. A lot of enabling works were completed in this area, so I was on Station Road this morning, which we built to improve traffic in the area. To EKFB’s credit—it is is the contractor in this particular area—it has about 80 kilometres from end to end of its contract boundaries and over 70 kilometres of that has haul roads, so it is able to get much of the construction traffic off the local roads.
I think that there are lots of green shoots and lots of positives. We have made a big move to do the work with the community rather than to the community, but until we close up our boundaries and get through this particularly heavy construction phase, I suspect from time to time we will find local tensions.
Q140 Greg Smith: The evidence we took this morning from parishes like Calvert Green, Edgcott, Steeple Claydon, East Claydon and Twyford, from Buckinghamshire councillors and local members from the Grendon Underwood ward, as well as the deputy leader of the council, the leader of the council and the cabinet member for transport, argues that nobody’s expectations are being met at the moment. When was the last time you directly visited to talk to the representatives, at a council level, a unitary council level or a parish council level?
Mark Thurston: I have not been in the area for some time before today, which is why I came up this morning. It was useful to see the work we are doing first hand, but we have a team of about 100 community engagement managers along the line of the route with dedicated contacts here in the areas you referred to. We have a dedicated help desk in our head office back in Birmingham that is open 24/7 and is available to the public. Of course, as the senior team at HS2, we track all of the key measures of how we are engaging with the public.
We have made a corporate commitment to the Department and to Ministers to respond to all complaints on construction within 48 hours of the complaint. I am pleased to say that certainly last year’s experience is that we were closing those out well over 90% on time. I accept that it is difficult for some people, but certainly what I have seen this morning is that we have made a lot of progress. I can assure local parishes and local people that this is front and centre of our minds. We accept that probably in the early days of the programme as we were finding our feet in the area it was slightly more challenging.
I think that we have come a long way since then. The reassuring thing is that we have made great progress with HS2 over the last two or three years despite some of the headwinds, and we can see a place 18 to 24 months from now where that quite disruptive type of work is behind us.
Q141 Greg Smith: The evidence that parishes gave us earlier—which I can attest to in my day-to-day existence off this Committee as the Member of Parliament for this constituency—is that the parishes are given a phone number to phone when they wish to raise something. Their reporting back this morning was that that phone number responds within 28 days, and this is the same for individual landowners or business owners. Do you think that is, first, a good enough outcome? Secondly, accepting your point earlier that nobody chose to have this railway built through their businesses, their farms, their land, their homes or their villages, do you think it is fair that parish councils have to take on this extraordinary extra burden to be, in their words, the police officers of HS2—and, to be fair, East West Rail construction?
Mark Thurston: On the second point about the police officers, we expect to have relationships with all parish councils and all local authorities right along the route, and many of those are very constructive. I think there has been an increasing acceptance, certainly from my interaction with folks in Buckinghamshire, that the project is going ahead. Of course, that will be difficult as we find our feet, establish our sites and get going on the construction.
To your first point, certainly 28 days is not acceptable. We have made commitments to be much more responsive than that. I know all parish councils have weekly or fortnightly meetings, and my expectation is that my team on the ground and the contractor's team on the ground are receptive, are listening and are empathetic to local issues and that we are doing what we can to respond to those issues in a timely fashion.
Q142 Greg Smith: I highly recommend that you personally take some time to meet with those parish clerks, chairmen and councillors, and indeed Buckinghamshire councillors, to understand first hand from them the impact. I will break down into a few individual areas where things are reported to us as going wrong, and I will start with the state of roads in and around the construction area to and from compounds through villages.
I am guessing that everybody who has come here today will have done so in a vehicle of some description—a car or a minibus or a taxi, or whatever it might be—and they cannot have helped noticing the incredible state of the roads, with verges falling in, potholes and complete road failure in places. Given that HGVs do 2,500 times the damage in a single journey that a single road car does, as we were presented this morning, do you think you have done enough to put right that which the HGVs serving HS2 have broken?
Mark Thurston: I will make a number of comments. As I say, I have spent some time driving around the area this morning, close to and away from HS2 construction and East West Rail construction. I know enough about roads to know that a lot of the local roads have been neglected and have been underinvested in for many years, long before HS2 came into the parish. The particularly wet winter we had has not helped with road surface degradation, but the measures we have taken—as I have already said, we have the best part of 90% of the EKFB section now on dedicated haul roads inside our construction.
There are a number of crossing points, and I went through some of those this morning. Those crossing points are all concreted with traffic management to protect the public and local users from construction traffic. I have been past a huge stockpile of material this morning where we have brought 1.5 million tonnes of material into the area to facilitate the construction by rail through a railhead. We have, in total, 4.5 million tonnes of material to bring in, and we use a railhead for that. A bit further south in Smalldean we have brought in a conveyor system so we can move material to keep the construction traffic off the local roads.
Of course, there are a number of road closures in the area, and I have seen some of those this morning. Many of those were enshrined in the Act, and we work very locally with the local highways authority to make sure that where we are changing road layouts and closing roads, which is not very often, there is a programme to facilitate the construction. We have obligations under the Act to make sure that where we have to keep diverse routes open to get to particular places, that is always the case. This will continue to be an endeavour of ours with our supply chain until the work is complete.
Q143 Greg Smith: Everybody accepts that the wet weather in winter affected every single road across the United Kingdom. Everywhere you go has pothole issues and so on, but the roads that serve the vast majority of the villages in north Buckinghamshire were never built to withstand heavy-duty traffic or HGV movements of the sort of numbers that HS2 and East West Rail have been required to use. Can I get a really clear answer from you? Do you accept that the thousands of HGV movements associated with the construction of HS2 have significantly worsened the condition of the roads in north Buckinghamshire?
Mark Thurston: I don't. We did a road survey before we started. I have not checked or asked my team to check—which I certainly can do and will write back to the Committee—how we can compare the road condition now with how it was before we started. Of course, as you said, a lot of those local roads are quite narrow. I guess for decades they have been the recipients of farming equipment and vehicles before we got here. I know that there is a meeting with the Minister, the East West Rail team and our team on Monday to look at solutions to finding a way to mitigate some of the impacts.
There is no doubt that HGV traffic will have had some impact on local roads but certainly the evidence I have seen this morning suggests that those roads have not been invested in for many years, and of course we won’t have made that problem any better. That is why we have gone to great lengths to try to minimise the amount of HGV traffic on the local roads and hence build haul roads on our own sites and keep our vehicles, and move the material that we need, away from the public highway.
Q144 Greg Smith: When you have to close a road, who publishes that road closure to communities, to the public in a manner—I am not talking about an advert in the back of a newspaper. Who publishes the detail of that closure to real people?
Mark Thurston: The responsibility for the local highway is with the local authority, so we will work with the local authority. They are the statutory authority for the road network. There is a legal obligation to give two weeks’ notice. I will always be very confident that because we plan our work months ahead, we will let people know long in advance of that. It is for the local authority, which is the custodian of the asset, to notify local people of changes through its own systems. Obviously we have our own local signage where we need to change those things. We have our own drop-in centres. We work with your office and the other MPs in the area as well as the local parish council. I know that we are trying to get to the public through multiple sources where we are—
Q145 Greg Smith: Mr Thurston, the evidence we heard this morning from multiple parish councils was that when a road closure is proposed, often not within that two-week notice period, your officials, engagement officers, tell the parishes and basically lean on them to get that information out, which then results in the local parishes, first, getting the blame for the road closure in the first place and, secondly, then taking the metaphorical kicking when you change your mind at the last minute and don’t close that road when you said you were going to, or close it early. Do you agree that that is an unacceptable state of affairs?
Mark Thurston: I do not recognise the things you said, in the first place, and I am happy to go and verify that with my team and write back to the Committee. I would not expect us to conduct ourselves in the way you just described.
Q146 Mr Ben Bradshaw: Why not just have a live app that gives residents real-time information about road closures and openings?
Mark Thurston: Yes, it is a good challenge. We talked about that on the tour. What we do with the local authorities across the country—when Buckinghamshire Council want to close roads, there is a national system and a website for exactly this issue, where you can see where there are changes to roads and where roads are being closed. If there is more we can do, we will certainly explore that with the local authority.
Q147 Greg Smith: There is certainly more you can do on that, Mr Thurston, and I urge you to come and again personally see the actual impact and what happens with last minute decisions often coming into place, as we heard this morning. I appreciate you don’t accept that now, but it is for us to get that evidence to you.
I am acutely aware of time, but this is important from the evidence that we took this morning. Can I briefly turn to landowners? We heard from one farmer who has worked out the process to make a claim for compensation for crop loss or losing income for whatever reason. The claim process is that the landowner has to contact their land agent, who then contacts HS2. HS2's land agent will then try to modify that claim, and will sometimes go back to the original land agent or other times escalate it up the HS2 structure, which ultimately ends up with HS2's solicitors—I believe they are Eversheds—who then go back to the solicitor of the original landowner. It goes into a vicious circle where no one ever agrees anything.
Why can’t there be a simpler process for where a business—a farm—is not able to earn what they expect to earn from their land, which is incredibly hard work to feed the nation, and ends up having to spend all their time going round in circles with land agents and solicitors arguing over what, in the scale of the budget of HS2, is a fraction of the money you have available to you?
Mark Thurston: Is your question about the process? Let me take that away, Mr Smith, because if there is a particular case I am keen to understand that and why that took so long, because it should not take that long. We have a well-established process of compensating property landowners right along the route, so if there is a particular problem with a case in your constituency, I will make sure that is investigated and we will bring that to a conclusion.
Q148 Greg Smith: Every case I mentioned this afternoon has been raised with HS2 Ltd through my office. As you know, we enjoy quite a high correspondence rate.
My final question, because I am very conscious of time, is how much those in your organisation understand what we could broadly call the countryside and, more narrowly, agriculture and farming. There are multiple cases out there—I can see one landowner in the audience behind you—who have had fields full of crops completely flooded out and ruined because of what you have done with land adjacent to what is still a working farm. There are countless other examples where it just seems that nobody in the organisation understands how a farm works, how land actually works, and how you farm for crops or livestock. How many people in your organisation have an agricultural background and really understand not civil engineering, not how to build a railway but how to work land?
Mark Thurston: That is a good question. I don’t know that, but the people we have on the ground are invariably from the local community. They live and work here on our behalf. They will build relationships and care for the impact that the work of HS2 has on the local community. In the case that you refer to from a couple of years back around some drainage, there was a compensation claim that dealt with the drainage and that case has been closed, if it is the one I think you are referring to. Whether they have experience of farming land or agriculture or otherwise, the responsibility of our contractors and the people in HS2, working at a local level, working with local people, is to understand those issues and work with our contractors in a way that we mitigate the impacts of our work as best we can.
Q149 Paul Howell: Mr Thurston, we engaged with the community, and it feels from what I listened to that you personally have not done that yet. I encourage you strongly to go and do that, because the passion and understanding that we get from that is mind-blowing compared to what we get when we sit in an office somewhere. I really would like you to look at that.
The message I will give you is that you have a big job going on, and you have lots of things going on where you are focused on the health and safety of your people, and all that. We have seen that going around the site—great stuff. It doesn’t appear as though you have any consideration for the health and safety of the landowners and the people in the community. We have seen many concerns about how you engage and understand the stress and pressure that you are putting them under. One of the things that was raised with us today was an organisation called RABI, which basically comes from the farming community and helps them with their mental health. I strongly encourage you to engage with them to find out from a farming or a landowner’s perspective how they are doing.
I am interested to know what you are doing in that space in trying to understand the stress that the public is under because of the work that you are having to do.
Mark Thurston: I guess there are two things. One is that when we talk about putting safety and wellbeing at the heart of HS2, it is not just about the workforce in HS2; it is also the communities that are impacted. We have done a lot of work along the line with local communities in that regard. I have not heard of the organisation you referred to. We can pick that up and do more investigation with them. We can see if there is an organisation that we can work with that understands some of the stresses you referred to, particularly to agricultural communities, and how we can work and partner with them to better understand the impact our work is having and what we can do to mitigate that.
Paul Howell: I am conscious of the time, so I need to keep things moving along, but I strongly encourage you to do that.
Mark Thurston: Yes, we will.
Q150 Paul Howell: It appears to me that you have this big project, but you are not getting the little things right, and those little things are just multiplying with the population where they are feeling the pressures and problems. I encourage you strongly in that direction.
You talked about your community engagement officers, but one thing that was raised with us this morning was that it is fine having community engagement officers, but if they keep changing, by the time the people know the person they are dealing with, they have gone and then they add another relationship and they start again. It is somebody's new job, and they are just having to go round and round the loops of people getting nowhere because they don't have a long-standing relationship. I think you should probably have a look and see whether you have a problem with staff turnover in that space. It is anecdotal, because I have not seen the numbers, but I ask you to take a good look at that and see whether you have a problem in that space too.
Mark Thurston: Yes, I will have a look. I know a few of the staff who work in this area, and they have been in the organisation for some years. They have struck up pretty good local relationships. Of course, like any organisation, we will have some level of staff turnover but notwithstanding who is stood in the shoes of that role on any given day, I expect someone from HS2 or our contractors to make sure that the local people, the local MP and the local parish officers have a point of contact.
We have done a lot of work with Buckinghamshire overall on community and business projects—67 projects in the area and nearly £4 million-worth of projects in Mr Smith’s constituency alone. We have invested over £500,000 in 22 local projects. I think that where HS2 has come together with the community and used the funds that the Government have made available for community and business projects, we have seen that goes some way to help build bridges, recognising some of the challenges that we have already discussed.
Paul Howell: I refer you to the points I have already made, rather than repeating them.
Q151 Ruth Cadbury: Our questions up to now have been about community and local authority engagement. I am used to major projects that have come through the normal town planning system, and this one, HS2, has come through a different process. It feels to me that there is a different and a lower level of obligation on HS2 around things like amendments to the scheme, compensation through what we normally in planning call section 106 agreements, the cost to existing infrastructure and the frustration from the county council on the cost of road repairs. I don’t know whether you recognise that distinction, and it may be something you want to come back on. Is it because it is a different process that there is a different relationship between the local authority, the community and the project, or is it just because of the sheer size of the project?
Mark Thurston: The scale may well be a factor, but that is of no consequence to the local people, because they would expect to be treated in a way that is relevant for them—that goes to the earlier questions from Mr Smith. I think we have come a long way in making sure we have people on the ground listening to and working with the local people to deal with the implications of HS2.
On your broader question about the hybrid Bill, as a piece of Government legislation that Parliament has approved it makes certain provisions, and we have undertakings and assurances that we have to commit to. Buckinghamshire was very vocal in its petitioning against the Bill when it went through Parliament, and we have to meet a whole series of obligations under the Act. They are enshrined in law and ultimately under the Secretary of State. There is a high degree of rigour around our compliance with those, but I am not a town planning expert to know the nuances around how local town planning rules work compared to something like a hybrid Bill. Inevitably, a hybrid Bill is a particular vehicle for major projects. Nevertheless, that should not detract from the work we need to do to make sure how people feel about that, and that the impact of that at a local level, to the earlier point, is respectful.
Q152 Ruth Cadbury: You said that you have 100 community engagement managers, and the farmers told us that there are farm liaison officers. I don’t know whether they are a subset of the 100, or whether they are a different group. The farmers said that the farm liaison officers are like a firewall between landowners and HS2, but in both cases—the parish councillors and the councillors said the same—you may have all of these officers receiving concerns, information and so on, but they get no feedback or very slow feedback. What is HS2’s process for capturing and acting on the specific but also the systemic issues that are coming through those liaison officers?
Mark Thurston: We have multiple processes, but I come back to what I have already said. Our people on the ground—
Ruth Cadbury: What is the process? What is the feedback upwards from those officers?
Mark Thurston: The process is that we deal with as many of these issues as we can at a local level, because that is where they get raised and it is our responsibility to resolve them. Whether it is through the MP’s office or the parish council office, our obligation is to serve the local community with the people, and that is why we put the people on the ground. If people are saying that despite raising issues with us, it seems to go into a sort of corporate entity and never comes back out, I am very keen to understand more about that.
Q153 Ruth Cadbury: We heard from multiple stakeholders this morning that there was no feedback or very slow feedback. For instance, there is a standard bounce-back response to emails or in other publicity that says, "You will get a response in 28 days", which is not a lot of help when you wake up one morning to do the school run or go to work and there is a road closure you were not aware of. There are plenty of other issues where people need a response for their business or their day-to-day life. They need a response within 28 days, because they can’t wait for 28 days behind a road barrier or some traffic lights that are—
Mark Thurston: And we wouldn’t expect them to. As I said earlier, we have a statutory obligation to notify any road changes at least two weeks before we make them—
Q154 Ruth Cadbury: You have covered road changes, but there are a number of other issues where they are not getting any feedback at all, let alone any changes in results, some of which could save HS2 money.
Mark Thurston: I am keen to understand the detail and make sure we follow up. I can write back to the Committee on that.
Q155 Gavin Newlands: I have two things that were brought up with us this morning that I would like you to come back to the Committee on. One is tree planting, where thousands of trees would be planted, and the planting has either not happened or has happened and has not been successful. Could you update the Committee on the success of the planting thus far? There was also anger from households and villages that were assured that vibration would not be an issue coming back to their households to find legal notices for strengthening work that was required because of the vibration that they were assured would not be an issue. That is not ideal.
I have two very quick yes/no questions. The county council had to find resourcing from its own budget, which is obviously stretched, as are all councils, for two marshals to go around and—the term used was to "police" the impact of HS2 on roads. Do you think it is fair that the council has to find that money out of its budget to make sure that you are doing what you are supposed to be doing?
Mark Thurston: I was not aware. I know we have effective service-level agreements with all county councils to fund staff. If there is a particular issue in Buckinghamshire where they need extra resources, we will pick that up with Buckinghamshire directly.
Q156 Gavin Newlands: On roads, I think you contribute £93,000 a year to make good some of the issues from HS2 HGVs. You seem to know roads from your earlier answers, and £93,000 does not go very far in road maintenance, as you know. I am making these figures up, but to make good the roads in Buckinghamshire, it would probably take tens of millions of pounds. Let’s say that the annual road maintenance budget is £3 million now. If, after HS2 departs, it is £6 million or £7 million, do you think it is fair that Buckinghamshire taxpayers pick up those extra millions of pounds, or should that be HS2 Ltd?
Mark Thurston: That is a broader policy issue, which the Minister may want to answer. To be really clear, there is a road safety fund for Buckinghamshire of nearly £4 million, and Buckinghamshire has not drawn too much of that money thus far. It was allocated £1 million two years ago and £1 million last year, and we are very keen to work with Buckinghamshire in how we deploy that money to deal with some of the issues you raised.
Q157 Gavin Newlands: Okay, but do you accept that £93,000 is not a lot of money?
Mark Thurston: I accept that, but I think roads will be, to Mr Smith’s line of inquiry, a challenge for us to work through, and that is why the Minister is meeting reps from HS2 and East West Rail next week.
Q158 Chair: Before I turn to the Minister, can I follow up on that point? One of the concerns we heard from Buckinghamshire Council—I think we are talking about the fund you just referred to, the £4 million fund—is that the process for them to claim against that is enormously long and complex and just not fit for purpose. I strongly urge you to raise that with the council if you are meeting them on Monday.
Mark Thurston: It is not just in Buckinghamshire. The road safety fund exists for authorities along the line of the route and different authorities have chosen to use that fund in different ways, either to draw it down incrementally or to take the fund all in one go and deploy it as they see fit. We can work with Buckinghamshire to find a way of deploying that fund that works for them.
Q159 Chair: Thank you. As a comment rather than a question, I strongly urge you to do everything you can to better the integration and co-operation with East West Rail. We heard concerns that although the situation has improved, the two organisations have not been as streamlined in their planning, for example on road closures, as they might have been. I ask you to focus on that with East West Rail as well.
Mark Thurston: Again, I know that there is a lot of interaction between the respective teams. We attend their meetings with the local community, and they attend our meetings with the local community. Certainly, I recognise some of the things you said from the early days when we were finding our feet. I think it is a lot better now but, to my earlier point, we will continue to want to co-ordinate with them and with local stakeholders until the project has got to a point where it is no longer creating some of the disruptions that have been referred to.
Q160 Chair: Thank you. Minister?
Huw Merriman: I want to come in on a few things, and they are perhaps driven by the experiences I have had since I took on the brief and from visiting areas. The first one is the visit I did with Mr Smith. My family live in Buckingham, and Mr Smith was aware that I was doing my mum’s garden, so off I went to meet Mr Smith around the Calvert and Steeple Claydon area so that we could have a look at the state of the roads. That inspired the idea to sit down in the Department with HS2, East West Rail, Mr Smith, Buckinghamshire Council and our Department officials to go through some of the matters that you have touched on. We will do so this coming Monday. We have the road condition baseline, which is the level at which the roads must be maintained, so I will be interested to find out how that has been set and has been going. You are right to refer to the £3.95 million road safety fund. There is discretion as to how that fund is spent and that is down to the council, but it will be interesting to see what barriers they believe are in place. I am very happy to look at those with HS2.
On the points about community engagement, the second visit I did in south Northamptonshire with Andrea Leadsom taught me that we have representation there from a land agent perspective and an external legal perspective for individual landowners or property owners, but I want to see more drive internally to resolve those cases. The funds are there for the property owners to have their representation. I want to make sure that there are incentives for conclusions. There is nothing worse than finding out that both sets of lawyers or both sets of land agents have been continuing a sort of arms race of paperwork and correspondence that is more extensive than the differential in the claim amounts.
I have experience with this, because previous to being an MP I worked with joint administrators running a legal team and we had vast legal bills. This was for the Lehman Brothers estate. My job was to charge external lawyers with reaching a conclusion. You can only do that if you have in-house teams to do so. I will be looking to bring that forward so we can get a resolution for every single case and take a commercial view on whether it is worth settling those. Obviously, taxpayers’ money is paramount, but we could be in a situation where it is good for the taxpayers to settle, and it is good for the overall HS2 relationship in the community but particularly for individuals who I have met who appear to be quite vulnerable and quite lost in their paperwork. I can assure you—perhaps the next I come before you—that there will be a stream there to try to make things better.
Q161 Greg Smith: Minister, I am grateful for the answer that you want to get land compensation and land transactions moving. Can I urge you, as part of that, to get on top early of the fact that, for the first time—this was other evidence we heard earlier—land that was temporarily taken, particularly around utility diversions and so on, is starting to be given back? This is not land that is permanently taken or land that is needed for the whole construction, but where a gas main or an electricity well or whatever it is has had to be moved.
I already have multiple cases in my MP’s inbox, and we heard from one of them this morning that the process is just as convoluted but even somehow manages to bring the local authority’s planning department into it. That is the last thing any local authority planning department needs right now. I appreciate the commitments you have made, but can you commit to looking at the processes around land hand-back so that the Government do not get themselves into a complete quagmire before the vast swathes of land to be handed back start coming on stream in a few years?
Huw Merriman: Mr Smith, I can give you that commitment and thank you for pointing that out. In a way, that leads me to the point that, having been brought up in this area and with my family still living here, I am aware—I only need to call home—of the impact that this project brings. We are aware of it. It obviously has an impact, and residents here do not see the direct benefit because they can't board the train, but they see the railway being built. We are at peak build right now, so therefore peak disruption. Once it is built, while there will still be legacy here because the train will run through, you will not have all the building construction work.
That is why Mr Thurston and I are keen to crack on and deliver, and we want to remove any blocks. The longer this build goes on, the more the disruption. I am absolutely committed to continuing to improve the community relations that Mr Thurston has touched on.
Q162 Chair: Thank you. We look forward to getting the further information that you have undertaken to provide to us. That comment from the Minister leads me on neatly to some more general questions about the project. Back in March, the Government rephased the HS2 project as a whole, with delays to the Birmingham to Crewe and Manchester section and from Old Oak Common to Euston. We will have questions on that later on. The argument made was that those rephasings were to allow construction to proceed as planned with the section from Old Oak Common to Birmingham. What updates can you give us about what progress has been made? Are you anticipating any further problems that might delay the project further?
Mark Thurston: I will start by giving the Committee an update since I last sat in front of it in the autumn of last year. We have had great progress over the last six months. I will come back to your specific points about the rephasing. Phase 1 and the core route between Old Oak Common and Curzon Street are 40% complete. We have four tunnel machines in the ground and two tunnels a bit further north from here are already completed at one site at three of the stations. Over the course of the next 12 months, we will be in a position to award our railway systems contracts.
As you heard the Minister say, we are now in the second peak three years of construction activity right along the line of route. The phase of the project moves, as we go through 2024-25, from being a civil engineering project into being a railway project. We have now seen the concept designs for the trains. We have well over 1,000 apprentices on the project. There are some 2,300 businesses. We have invested £23 billion into the scheme thus far, and that has gone into the UK economy. It is very much now HS2, a national endeavour that is serving the whole sector. Of those businesses, over 95% are UK-based organisations. We have great momentum.
To your question, our focus is very much on the core route between Old Oak Common and Curzon Street because that is the bit that we were always going to open first anyway. We are currently looking at the rephasing of the section south of Old Oak Common into Euston, and we are looking at the equivalent rephasing of the section between Birmingham and Crewe. The other important thing is that we are maintaining momentum on the hybrid Bill for phase 2b, the section between Crewe and Manchester. That committee is now established, as you will know as the Transport Select Committee, and that Bill is making its way and starting to hear petitions. Our expectation, subject to the time of the general election, is to get Royal Assent for the final phase into Manchester some time towards the end of 2025. We are very much on all fronts now moving forward between London and Manchester via the West Midlands.
Q163 Chair: Thank you. Our colleague Mr Morris keeps us abreast of the issues in the Hybrid Bill Committee. Given that there have been a couple of unexpected issues recently—not least the well-publicised sinkhole above one of the tunnel constructions—on a scale of one to 10, how confident are you that there will not be a further discovery or a problem that will change the current timetable for that core section from Old Oak Common to Curzon Street?
Mark Thurston: We have maintained our window. Our planning window to open the railway is 2029-33. That has always been the published window. The Minister's next report to Parliament may well be issued in the coming days, and that will reconfirm that we stay within that planning window. Of course we have not built a railway north of London since Victorian times, so what we are doing here is slightly unprecedentedt, and this Committee knows full well that we will have challenges as we go about our business. You referred to the sinkhole in the south of Buckingham only in the last week or so, but those things will present themselves.
We have had other issues over the life of the main construction phase, but we have good plans in place and we have a resilient contract base. I think we have navigated the worst of the impacts of Covid. The momentum we have gives us confidence that, yes, there will be issues, but we will deliver and open the railway in the window that is now published.
Q164 Chair: I will focus on that sinkhole for a moment. There are some concerns that this sort of problem will be repeated. The next phase of the tunnelling is under some of the chalk streams and aquifers that affect water supply more widely. The section north of Birmingham goes over different terrain where a hole like that could cause very significant problems. How well have you anticipated these sorts of issues?
Mark Thurston: Very well. We have done thousands of ground investigations—hundreds on the particular question in the area you refer to—and boreholes to understand the geology. There is a particular sensitivity as we go through Buckinghamshire because it is in chalk, and the interface between chalk and water often can cause some unpredictable reactions. The tunnelling machine itself is a very sophisticated piece of equipment so it can sense the way the geology is responding to the pressure of the tunnelling machine. Of course you have to remember that the original line of route that has been enshrined into the Act was thought about long and hard as to what is the right route to take, particularly where we are tunnelling. As I have said, we have already completed two tunnels just south of Leamington Spa. The tunnel drives in question are coming up to two-thirds complete, and we are very confident. We were at the bottom of all the shafts of those tunnels.
Because of the nature of particularly the chalk streams you referred to, you cannot 100% predict it would not happen again, but all the measures are in place. It is very rare for that to happen. The way that it was dealt with in the case in point this week was exactly how we do all our procedures—the processes, the way we stopped the machine. The work we had done was signed off by the Environment Agency and Affinity Water, who are the two statutory bodies for that area. We will continue to work with those consenting bodies as we complete the other tunnels.
Q165 Chair: Given what we have been talking about in the first section of this session—the problems with community engagement, and residents’ understandable and justifiable concerns—what more can you do to work with Buckinghamshire Council and the parish councils to take them with you on the journey so that they can understand what the problems are or might be and take that into consideration in their forward planning?
Mark Thurston: I am sure that there is always more we could do to inform local stakeholders on the nature of our work and some of the risks, for example where the tunnelling machines are. Rest assured that stopping the tunnelling machine, as we did earlier this week, was planned in a low-risk area. We would never do that anywhere near the public. As we said publicly, the public were never at risk there. We agree locations to do that work in a way that is relatively sterile. There was a suggestion it could have been near a footpath. We would never stop a tunnelling machine or disturb the geology where you would create that sort of problem.
We have hugely experienced contractors building these tunnels and also the above-ground structures. I want to assure this Committee and communities along the line of the route that we have a world-class workforce and world-class contractors working on this project. If there is more we can do to inform local communities of the nature of our work, of course we can do so.
Q166 Chair: I strongly urge you to do that, because there is an appetite from the local authorities to have that level of confidence and engagement with you. A final question from me before I hand over to colleagues: what is the current expected date that you will hand over maybe not a key, but whatever it is you hand over to the operator of HS2 trains, and the line will be up and running?
Mark Thurston: We have a publicly declared range of 2029 to 2033, so we are still some way away. As I say, we are about 40% complete, so there is a lot of work to be done. We have a target date somewhere around the back end of 2030, but that date will almost certainly move over time as we go through the next five, six or seven years. The operator is already engaged in the project. To reassure the Committee, as we are thinking about the design of the trains, the design of the stations and how the railway operates as it goes live, the operator is already at the table with us and the Department thinking through the operations of the high-speed railway. It will continue to be at the table, and of course it will work with us on things like driver training. The area that we saw today is part of our core test area, so we test the railway and we have to go through a whole phase of driver training. The operator will continue to be involved in the project and obviously will become a more dominant player in the project as we get close to going into service.
Q167 Jack Brereton: I want to ask a bit about the changes in the rephasing of phase 2. First, what has been the impact of these changes?
Mark Thurston: Let’s take phase 2b first, because in the funding agreement we have with the Department for the next two years we have protected the passage of the hybrid Bill, which is critical to the ongoing phase once we get Royal Assent. We were looking to do some ground investigation and early development work in parallel with the Bill’s passage. Should some funding come on stream in the next two years, we will prioritise that work, but at the moment that work has been deferred because of the funding settlement. That is where we are on 2b from Crewe into Manchester.
South of Crewe back down to Birmingham, phase 2a, is further advanced. We got Royal Assent at the beginning of 2021. We were making great progress with land acquisition, enabling works, ecology works and a lot of things like utility diversions. We will conclude, so some funding has been made available for the next two years to conclude some of that work where we are demobilising the contractors who we will take off the project. We will bring the scheme design on to the project, hopefully later this year, so we intend to start designing the scheme beyond the definition that we have got with the hybrid Bill. We have not fully understood the cost of the schedule impacts to phase 2a through the reduction in funding, but we will probably conclude that work some time on the other side of the summer.
Q168 Jack Brereton: Will the design and delivery partner contract award, which is a £500 million contract award, still be going ahead?
Mark Thurston: Sorry, Mr Brereton; what contract are you referring to?
Jack Brereton: The design and delivery partner contract award, which is a £500 million contract award for phase 2.
Mark Thurston: I understand; apologies. I think you are referring to the award of the design delivery partner that we intend to bring to support us at HS2. Effectively, we have agreed with the Department and Government a model for phase 2a where we bring in a third-party partner to support us, very similar to the arrangements for London 2012, for example. That is the contract that I referred to that we intend to get awarded later this year.
Q169 Jack Brereton: Given the two-year pause, why are you still pressing ahead with this very large contract?
Mark Thurston: We agreed with the Department that that is what we call spend to save. We are committing a contract to that partner and providing not the full amount of funding we would have otherwise had for that contract but there is some funding for it. It is not to the extent that you referred to, so we will look to constrain the spend on that contract for the two-year fiscal period that we have reset our budgets for with Ministers and the Department. That is important, because we want to get the scheme design going. We can’t build anything until we move the scheme design forward, so getting them appointed and starting on the scheme design is a priority for us from this autumn.
Q170 Jack Brereton: I will ask you now about the BCR for phase 2. You may have seen that we asked the Secretary of State about some of this, and the response we had is that this is a detailed and complex task. Why is this such a difficult task to undertake?
Mark Thurston: That is probably an issue for the Department. It owns the business case and, frankly, it will take the cost and the schedule that we will advise it on for the scheme as input to the business case and the benefit-cost ratio. We need to rework the cost and the schedule now in light of the funding restrictions. As I have said, we expect to conclude that work in early autumn. I would expect the Department to re-run the business case based on the revised figures, and then there will be a decision for Ministers around publishing the BCR.
Q171 Jack Brereton: Minister, perhaps you can shed some light on when we will have this revised BCR for phase 2. We really need up-to-date information on this, and surely remodelling an existing model but changing slightly some of those variables should not be such a huge undertaking.
Huw Merriman: A lot of it leads back to the review that, as Mr Thurston mentioned, HS2 is doing on costs, and what this will mean with the new costs. Of course, that will then impact the BCR. We have to get that work done first to then release the BCR. As you are aware, Mr Brereton, we publish six-monthly reports to Parliament. As Mr Thurston mentioned, the spring report will be due out any week now, and there will also be another one in the autumn. I imagine that we will be in a position to publish the revised BCR after HS2 has done the work that Mr Thurston mentioned in the summer and then that should follow, but we have to do the cost work first.
Q172 Jack Brereton: We should have that in the autumn?
Huw Merriman: I am very much working to that date, yes.
Q173 Jack Brereton: Mr Thurston, on phase 2 again—the stations north of Birmingham that will see an enhanced service, my understanding from HS2’s own information is that the only stations likely to see additional trains per hour are Runcorn and Liverpool. Why is there not going to be any additional capacity north of Birmingham other than for Runcorn and Liverpool?
Mark Thurston: I have to say that I don’t recognise that statement.
Jack Brereton: This is HS2’s projections on service, which you regularly—you last updated them in 2022, so this is your information.
Mark Thurston: Okay. I will take that away to check, and I will write back to the Committee in more detail on this point. Frankly, the final service pattern for the service is something we need to agree with the operator. The Chair made an earlier reference to that. Once we open phase 2a, we will be able to run trains north of Handsacre and then to Crewe and beyond, so our expectation is that trains will run into Manchester and arguably Liverpool. When we open the railway, initially there will be only three trains an hour, so we will run two trains potentially to Birmingham and one train beyond. The important thing about Handsacre junction is that we can then run trains to Stafford.
There are a number of choices that the Department for Transport will have to work on with the operator to work out what the right service pattern is once the infrastructure is built. Obviously, that service pattern will build as we build the railway further north. The other important strategic contribution to the service pattern whereby HS2 serves more towns and cities in the Midlands and the north is the completion of Euston. We will always be constrained on the number of trains at Old Oak Common, but once we bring the railway right into the capital we will be able to run many more trains, and ultimately 17 trains an hour north. Again, there is work to be done with the Department in the coming years as to what the exact service patterns will be.
I think the main point to make, Mr Brereton, is that this is a railway for the country that will change the dynamics of the economics in the Midlands and the north, so it is important that the towns and cities you referred to all benefit from the investment in HS2.
Q174 Jack Brereton: I also want to ask you about the capacity, particularly at Crewe station, which is critical to phase 2. We asked the Secretary of State about this, and what has been referred to as the neutral core option is now looking to be the preferred option, but the Chiltern viaduct will need to be extended beyond what was originally anticipated to get over the west coast main line to the east side of the west coast main line. However, there is a property that is not included as part of the 2a hybrid Act, and that was never included. How will you be able to complete that viaduct to get it to the other side of the west coast main line?
Mark Thurston: Apologies, Mr Brereton; I am not familiar with the specific case. Let me take that away and write back specifically on that point. If I understand your point, there is a property that was excluded from effectively the red line, the limits.
Jack Brereton: That is what I am saying, yes.
Mark Thurston: That would require some other planning legislation to acquire that property. There are vehicles available to the Government to do that, but let me go away and find out a bit more and write back to the Committee on that.
Chair: Before I turn to Ruth, it is getting rather warm here, so if you wish to take off your jackets, please feel free to do so.
Q175 Ruth Cadbury: Moving on to phase 2b, you told us in November that you would be spending a lot of your focus in 2023 on standing up resources and staffing in the north-west in preparation for later phases. How is that going?
Mark Thurston: It is going quite well, in that we had two days in Manchester in January and met a whole series of stakeholders, both business and transport. We are at the moment closing down our small office in Manchester and opening up a broader area in the Network Rail building so we have a bigger footprint.
Candidly, the restrictions in funding that have been talked about have meant that we probably will not mobilise as quickly as we would have thought in the north-west. Clearly, HS2 Ltd has established a significant presence in the Midlands. We have a place at Crewe, and Manchester is our next real port of call. My expectation is that we will grow resources, so the commitment I made to the Committee last time still stands. It is more just the pace of that and how quickly we need people there, recognising that the real focus of phase 2b west at the moment is back in Westminster with the Bill going through Parliament.
Q176 Ruth Cadbury: Is there anything around particularly phase 2b that might be different from phase 1 in terms of engineering, design or communication processes?
Mark Thurston: The beauty of HS2 is that with three phases between London, the Midlands and Manchester we get to learn a hell of a lot from the first phase into subsequent phases. Certainly, our approach to phase 2a is quite different in many respects from what we have done in phase 1 and there is further learning that we are building into—
Ruth Cadbury: In what respect?
Mark Thurston: For example, how early we start ground investigation work, to the earlier questions, so that we understand the geology; how we take the lead on design; and how much work we can do before the Bill passes through Parliament. Until we fully get Royal Assent, of course, if we start design we are working at risk because we need Parliament to opine on the final scheme. Our learning from earlier phases is that once the Bill goes through the Lords, it does not change very much and we can start to invest. That is taking time out of the scheme, which, of course, is driving better value for taxpayers.
There are lots of other areas. We have developed great relationships with many of the statutory utilities, which is one of the early works. We have lots of learning and relationships that we will take further north there. There is the way in which we do the ecology work, and certainly in areas like land acquisition and how we acquire land—mostly temporary rather than permanent—so we minimise the disruption to landowners. We were trying to take what you might call a just-in-time approach to land acquisition on phase 1, and our experience is that that ends up, for both us and the landowners, causing probably more disruption and uncertainty than necessary. I think that it was set up with good intent, but the reality is that acquiring larger areas of land earlier, even if we acquire them temporarily, gives landowners more certainty and gives us more certainty. I could go on.
The other reality is that we have to get the railway into Piccadilly. If you have been to Manchester, it is a very complex station. As you will have heard from the Public Accounts Committee, we have had significant challenges working out the complexity of Euston, and many of those complexities are going to manifest themselves in the north-west as well.
To your question, I hope I gave you a bit of a flavour. There are lots of examples of learning for HS2 Ltd and for Department colleagues and local authorities dealing with us in how we make that scheme even better value for money.
Huw Merriman: Can I just clarify—not that Mr Thurston said anything different, but it is important to note—that the delivery into service date range with regard to phase 2b remains 2035 to 2041? That has not changed at all. The rephasing part is with regard to phase 2a.
The other complexity to add to Manchester is that under the integrated rail plan we will see Northern Powerhouse Rail services come into Manchester as well. That will no doubt add to the challenge, but also the opportunity.
Q177 Greg Smith: Can I come to the overall cost of the project? In October, we were told that HS2 now expects to exceed the target cost for phase 1 but remain within the funding envelope for the whole project, and yet the Secretary of State earlier this year paused work on huge swathes of the HS2 project. Mr Thurston, have you got on top of the cost pressures within phase 1 to the taxpayer?
Mark Thurston: That is a constant job for us. We are very aware that this is funded by taxpayers. As I have said already, we have invested £23 billion into the scheme right across the UK economy. To the last ministerial report, we are not immune to many of those cost pressures that lots of other walks of life have seen. There is a legacy cost pressure from the pandemic and a whole series of impacts associated with Brexit. Clearly, the last year to 18 months has been very challenging around inflation. Of course, we are only 40% complete. We still have a lot to do.
We are working on that very issue now. We have committed to the Department and to Ministers that we will have an understanding. Now we have clarity on the funding for the next two years, to the other part of your question, we are now working with our supply chain and with Department colleagues and officials to understand what our best estimate of the cost of completion of phase 1 will be. Again, to the earlier point, that is work that will conclude in the autumn.
Q178 Greg Smith: Can you take us through? You must have identified some savings so far. It is inconceivable that this number of weeks or months on from when these pressures were identified and reported to Parliament by the Secretary of State, some identification of savings has not been made. Can you take us through what areas are due to be cut in order to complete phase 1?
Mark Thurston: When you say areas being cut—
Greg Smith: Budgets. If the budget has to stay within a certain window, you must have identified savings to make, so can you tell us what those savings are?
Mark Thurston: That is a significant piece of work that we are doing now. To your earlier point, we formally declared to the Department last year that the target price was under threat, for reasons I have touched on. We have now developed a remediation plan to deal with the impact of that cost pressure. That remediation plan is with the Department and Ministers, and we are now working on it. It is everything from looking at areas like the functionality of the railway, looking at how we can drive better value from our supply chain, and looking at how we can drive innovation into the scheme to find savings. It is a fairly multi-pronged effort to drive cost out, recognising some of the headwinds we have suffered that are outwith our control over the last few years.
Q179 Greg Smith: To help the Committee understand that, can you give us an example of such innovation that will get costs down?
Mark Thurston: On the procurement end, let me give you a “for instance”. As you have seen today, we need huge amounts of material for building this railway. We have four major civil contractors, so our buying power across the market for aggregates, as a case in point, gives us a way to work innovatively with the aggregate suppliers and the quarries. Finding ways of driving better value for money for core materials, for example, would be one of the ways that we would look to drive value.
We are introducing some automated techniques for the next phase of the project. We are working with the Manufacturing Technology Centre in Warwick to see how we would move away from manual to more mechanised techniques to install the railway. That will give us much greater certainty on costs and schedule. It will be safer and much more predictable. Of course, if we can do a more mechanised approach versus a more manual approach, we can save on labour and the investment in plant.
They are a couple of examples, and I can go on.
Q180 Greg Smith: I understand that last example, but if the mechanised route is safer and cheaper, why was it not in the original plan?
Mark Thurston: We have to realise that HS2 is in many respects a leading project when it comes to the adoption of technology into the constructing infrastructure. An example is that for many of the structures that you will see, and you saw some this morning, we are increasingly looking at how we can manufacture those structures offsite. Rather than what we call in situ concrete structures, which is again quite a manual process and what the industry has done for decades, we are looking at how we can use design for manufacturing and assembly such that effectively those big structures that we have to build become almost like a kit of parts. We can construct the building blocks offsite and then we just assemble them. That reduces assembly time and gives much greater quality and more certainty on cost. These are all things that have developed over the life of the scheme over the last few years.
Q181 Greg Smith: Okay. This is a question to the Minister and Mr Thurston. Can you give me a clear commitment that as that plan is considered within the DFT and HS2 Ltd, and as you make decisions on how to reduce the cost of delivering phase 1, there will be a red line, an absolute no-go zone, that not a single penny of anything committed to community mitigation—the Twyford bund, for example, or projects that are being done to repair the roads that have been broken by your construction traffic; admittedly it is a contentious area—or any compensation schemes for landowners will be cut? Nothing that will impact community mitigation or community support will be cut at all.
Mark Thurston: The Minister will want to comment on this, but that is not an area that I would expect us to look very hard at when it comes to savings, because that is an important investment. That is not part of our thinking at the moment.
The big prize in driving cost out of this project is how we build the railway. For all those secondary costs that you referred to, certainly the property compensation scheme is enshrined in the Act. I don’t see that changing. The community and business funds are independently controlled and managed. I don’t see that changing, Mr Smith. Many of those things that are important to local communities I would see staying as they are. The Minister may well have a view. Our focus is on the core design and construction of the final railway product.
Q182 Greg Smith: Mr Thurston, I appreciate the sentiment, but there are many politicians sat around this table. You are not a politician, but it was quite a politician's answer, if I may say so, about not expecting to be looking at community mitigation. I think it is quite a straightforward question: will you commit that you will not reduce a penny to community mitigation compensation and so on?
Mark Thurston: I will let the politician answer the question, Mr Smith.
Huw Merriman: I say to Mr Thurston that that may have been a compliment, given that you are all politicians and so am I.
It is more that it is not something that has come up or that we would expect to come up. The reason we cannot say anything more than that right now is because it is slightly putting the cart before the horse. I say again: HS2 is going through a remediation plan to look at costs. Some of the costs are external. They are linked to inflation, which is running about 15% in construction right now. Of course, that is linked to the situation in Ukraine and post-Covid. Others are internal, and that is where we look to HS2. Mr Thurston is currently working with the board to look at some of these measures. Those measures will then come back to me, and I will then address those as to what I feel works and does not work.
We have not got to that stage yet, but, as Mr Thurston is saying, he is not looking to propose that as a way of cutting down on costs. Where we have the rephasing by two years, there may then be purchasing that is not needed right now. It may well be that if you purchase later, technology is more advanced and you get better value for money. As Mr Thurston says, the build out of the railway and the end state are where we are likely to see those savings.
That is as good as we can say. It is not on our radar, but we have not finalised the work yet. That is why we cannot come back and be specific as to yes/no on everything.
Q183 Greg Smith: Minister, I am not looking for a categorical explanation of every cost saving you are looking to make, but it would be of comfort to the Committee—certainly to me and certainly to the farmers, the local politicians, the council leader, the parish councils and everybody who lives through this project, not just in Buckinghamshire but up and down the line of route—to know that where cost savings have to be made, you are not going to go there, as rail Minister, in signing off a single reduction to a single piece of community mitigation funding.
Huw Merriman: I know it is frustrating, but the way we have to make policy is to work with the team, get the submissions and then I sign off on them or push back on it. Let me put it this way: if that proposal came up, which Mr Thurston is saying he does not expect it to, I would look to push back on it because it is not where I am looking to deliver. I hope that answers your question, in a way.
The whole thing about someone being political with their answer is because there is a proper process of making policy, and I do not want to pre-empt it and put the cart before the horse. However, I hope the sentiment has been picked up that that is not what I am looking for at all. I come back to the point that in order for this railway to be a success, those that have been most impacted by it but do not see the benefits have to be given the level of compensation and mitigation. We know there are challenges around it already. It would be counterproductive of us to make it even worse from that perspective, so it is not something that I am looking to do at all.
Mark Thurston: You referred to the bund. You saw at the site here this morning at Calvert where we are going to effectively build out the land at one end of the depot, so from Steeple Claydon the view of the depot will be mitigated. That is all enshrined in the Act. For noise mitigation and environmental mitigation, many of those designs are now complete. To give you some reassurance, Mr Smith, in the review we are doing and the remediation plan that we have put forward to the Department and Ministers, those issues are not there. Our expectation is that in terms of the permanent railway and the legacy we leave behind, we will continue to make sure that the railway is sympathetic to the local community and the local environment. All that work I expect to stay put.
Q184 Paul Howell: I have a couple of points on the financing and the cost savings. It makes sense to me that technology has moved along and, therefore, you may have opportunities to make savings because you are using new technology or investing more capital and things like that. It did not make sense to me when you were talking about making savings through the aggregate suppliers and things. I can imagine that their costs have gone up just the same as anybody else’s costs have gone up in construction. Can you outline why you think there are any savings in that part of the equation?
Mark Thurston: It is more the economies of scale. We are a huge consumer of materials.
Paul Howell: You always were. That was part of the initial position, surely.
Mark Thurston: As we have developed relationships with all our principal tier 1 suppliers, we are working collaboratively with them in a way where we can secure supply from the market for things like aggregate. We use our collective buying power to drive better value from the market.
Another good example would be energy. We are a huge consumer of energy. We are working with the Crown Commercial Service in Whitehall to use the Government buying power to make sure that rather than contractors, who will typically secure energy from the local utility company themselves, HS2 gets itself in the middle of that with the Department and works with the Cabinet Office to make sure that we get the best value from government contracts. That is what I meant. It is the economies of scale, and where we have a uniform requirement across the route we maximise the value that that can give to the scheme.
Q185 Paul Howell: Again, I go back to the same point: you always had that scale. If anything, the scale has contracted in what is actually being done. I do not understand why you get more economies of scale. If you could have used the Crown Estate, why weren’t you there in the first place when this was first kicked off as being lead valuations? I question the statements there.
Mark Thurston: It is often about risk. The intent was that HS2 set itself up to get major tier 1 suppliers on board and put the responsibility and the risk on them to secure all they needed. Once we step into that space and decide that we are going to work with them and we are going to take some responsibility for securing something like power or energy, or aggregates, then inevitably we, as HS2, start to absorb some of the risk. It is a risk and opportunity conversation inside HS2 and with the supply chain.
To reassure this Committee, we have good relationships with all our tier 1s. We have good relationships with all the major bulk suppliers of goods and services for the scheme. The point is, to come back to Mr Smith’s question, that we are maximising every opportunity to make sure that we deliver this scheme at the best value for taxpayers.
Q186 Paul Howell: When you transfer risk from one place to another, I think you also should be giving consideration as to where the contingencies are sitting.
Mark Thurston: Indeed.
Paul Howell: Does that mean, therefore, that you are absorbing the contingency base and then risking running out of contingencies, if that is—
Mark Thurston: No, not necessarily. It is just understanding where we, as HS2 on behalf of the Government, get involved in some of those decisions, and then inevitably some of the risk comes back to us. Of course, we do not make that decision and we do not transact that decision until we have fully understood the risks and the issues that you refer to.
Q187 Paul Howell: Okay. I think that it would be useful at some point in time—I do not know what the date of the report is—to see what level of contingencies are still sitting there as we go forward.
Mark Thurston: In the ministerial reports every six months there are clear tables in the back of the report that set out how much contingency we have drawn down as HS2 and how much Government contingency is drawn down. It shows that every six months.
Q188 Paul Howell: Okay. I am relatively new to the Committee, so I have not seen the previous reports.
The final point I will throw in is that we have talked about not wanting to impact on the communities here when you are trying to save money, as to what funds are there. This probably is a broader issue—maybe it is for the Minister—in terms of the broader rail issues throughout the country and the broader transport spend throughout the country. I think that a lot of us would want to make sure that in the rest of the country, rail or road investments are not going to be mitigated by any cost pressures that are arising out of HS2.
Huw Merriman: Indeed. Of course, we have a substantial spending programme when it comes to the rest of rail. We have £96 billion for the IRP, predominantly for the north but also for the midlands. We also have other railways that we are looking to deliver. Mr Smith has mentioned East West Rail. We continue to build and deliver those railways.
Yes, cost is a real concern now. The delivery of the engineering projects is ongoing, and I believe it is going well, but we do have to focus on costs. We are absolutely committed, both Mr Thurston and I, to managing those costs with the pressures that we have experienced. I can give you that reassurance that I have not had coming across my desk other matters that I have had to take out in order to deal with this. Our focus at the moment is how we can control costs within HS2 to deliver to that challenge.
Paul Howell: Thanks, Minister. I guess that there are also potential learnings for other projects from what you have learned from HS2.
Q189 Ruth Cadbury: I want to ask about the operational speed because that, of course, makes a difference to costs. By reducing the operational speed—the original operational speed was significantly faster than TGV and Shinkansen—you reduce costs. You also theoretically enable more flexibility in the line because you can have greater tolerances. Has the operational speed changed? Is it 205 miles per hour—330 kilometres per hour?
Mark Thurston: The maximum speed that we are designing for is 360 kilometres per hour. It varies at different places along the line of route, but that is the maximum speed. On average it is about 330, I think, if you look at the route between London and Birmingham.
Ruth Cadbury: Okay, so it has come down from the original spec.
Mark Thurston: We have to design the rail for what is called “overspeed”, because that can often happen in operating railways.
The other point to make is that this was looked at long and hard in the Oakervee review that the Prime Minister commissioned in 2019. We looked hard at what the incremental cost saving would be if we were to lower the speed. Frankly, some of the decisions we had taken at that point around the technical solution to deliver the speed were already made. Nevertheless, the view was that when you look at the business case in the round, reducing the speed did not deliver the savings that you might expect. At the moment, we are designing the railway to operate with a maximum speed of 360 kilometres per hour.
Ruth Cadbury: Thank you. That is helpful.
Q190 Jack Brereton: Minister, you just touched on the importance that you give to costs, but as Parliament we do not really have a good appreciation of this because we are still working on 2019 figures. When are we going to have an update on those costs based on current inflation and current prices?
Huw Merriman: That is something that we are working with the Treasury on. In addition to the work that is being done by HS2, which we expect to be completed over the summer so we can report on that, I also expect to be in a position to be able to give updated figures, taking into account that we clearly have inflation nowhere near where it was in 2019. That is work that I expect to have in parallel, to a certain degree, but we obviously need the updated cost plan in order to then turn those figures over.
Q191 Jack Brereton: Will this give a more accurate interpretation of the spending that has been undertaken by HS2?
Huw Merriman: It will give an updated view as to what the current costs are because we are running, as I say, to inflation as it is for 2023 rather than where it was in 2019, so yes.
Q192 Jack Brereton: Do you expect that we as Parliament will have to approve a significant increase to HS2’s budget?
Huw Merriman: I do not want to speculate, because the challenge is on myself and Mr Thurston to minimise costs from an internal perspective. I have just mentioned that inflation in the construction sector is running at 15%, so that would tell you that there is a big external challenge for us to focus on. In that parliamentary report, when we have gone all the way through and crunched those numbers, I would expect to be able to publish to Parliament exactly what those figures are.
Q193 Jack Brereton: How do you expect that to impact the business case and the viability of the whole project?
Huw Merriman: Of course it will, because one has to look at the cost of the project and then the benefits of it. Yes, it will, but this is a line that we are committed to. We are going to deliver it. It is going to go from Old Oak Common to Curzon Street in Birmingham by 2033. If you look at the thousands of homes, and the thousands of jobs that are being created, then that commitment is there.
My view would be that once HS2 is delivered, much like the Elizabeth line has now been delivered and people talk very positively about it when it is delivered—it is interesting; I believe that the Jubilee line extension to Canary Wharf did not have a particularly high business case, but if people told you now that that should not have been built, I dare say you would not think much of their argument. I remain committed to HS2 and what it will deliver across the country.
Q194 Jack Brereton: Do you think that will have a bearing on how we proceed with phase 2?
Huw Merriman: No, because our commitment is there for phase 2a and, indeed, 2b. We would not be putting Mr Morris through the twice-weekly grind of that committee if it were not to deliver it in his honour.
Q195 Jack Brereton: So you would be prepared to deliver an unviable project?
Huw Merriman: No, I am prepared to deliver a viable project that is going to connect our cities together, deal with the net zero challenge that we have, and be there for the future. Politicians are always accused of just being in it for the next election; this one is a lifetime commitment to this country. I believe that once it is built all the way up to Manchester, we will all be in a better place for it.
Q196 Chair: Thank you. I would like now to turn to the Euston to Old Oak Common part of HS2, starting with Euston station itself. Given that following the Oakervee review there was a redesign, why is it being paused again for another redesign?
Mark Thurston: The Government had to make some difficult decisions—the Minister has already made reference to this—to agree a funding settlement for HS2 for the next two years. There were some difficult choices to make. That is my first point.
The second point would be: in making those difficult decisions, what parts of the scheme could we slow down or stop temporarily to live within a funding settlement that was affordable? Certainly, because we were always going to open the railway north of Old Oak Common first, the section south of Old Oak Common to Euston was part of that consideration.
The third point is that we have got to a point now where we have a highly detailed model, a 3D model, for Euston. We have costed that model and that was discussed at some length at the recent Public Accounts Committee I was at with Dame Bernadette Kelly. Of course, we made it clear that with an estimate of £4.8 billion for the full Euston scheme, that is not affordable in the current climate and certainly under the current budget. We using the pause, which is due to funding, to now stand back and look at what exactly we need to do and build at Euston so we have a scheme that is buildable and affordable, which serves the long-term needs of the railway, to the Minister’s point, but at the same time gets us to a place where it can live with the cost envelopes we have agreed.
Q197 Chair: I understand the broader timelines for the costs and why parts of the project have had to be rephased, but I want to get back to the question of why the cost has ballooned so much. The initial budget for HS2 was £2.6 billion, but by June 2020 it had gone up to £4.4 billion. The redesign, I understand, was almost half a billion more expensive than that. What has caused the spike in cost now that it has to be looked at again?
Mark Thurston: To be very clear, the published number was £2.6 billion. We had an initial estimate for Euston of £3 billion back in 2019, but we recognised at that point—and the National Audit Office acknowledged this—that that was based on no real design of the station. It is a very complex station. To break that down, you have a 10-platform HS2 station. You have a major redevelopment of the Underground network. There are £300 million to £400 million-worth of significant enabling works to enable the Euston scheme. We have £350 million-worth of enabling works for over-site development. Then, of course, we have a significant interface between the new HS2 station and the existing conventional station.
Candidly, we only really fully understood the scale and the complexity of that at the end of last year. We have been on a big design programme over the last two years. If you recall, at the conclusion of the Oakervee review, it suggested that the Department reassess the right solution for Euston. We did a piece of work through 2020 to look at whether an 11 or 10-platform station was the right solution. The conclusion was 10, so we have redesigned the station to 10 platforms. We have a much better understanding of all those major interfaces and frankly, having costed that in a way that I would call bottom up, we are now in a place where we have a much more robust number. But, to your point, it is significantly different to the number we started with four years ago.
Q198 Chair: That begs the question: how did you arrive at that initial figure? What was it based on?
Mark Thurston: Exactly that. It was a very coarse estimate at the time. We did not have a design scheme. We did not fully understand what the interface and the oversight would be. Effectively, the scale of Euston and the overall footprint is something like the size of 100 football pitches. It touches an area way beyond just the footprint of the HS2 station. It needs major utility diversions on the local roads. What has become apparent as we have worked with stakeholders such as TfL, the GLA and the London Borough of Camden, as well as Network Rail, is that is a very complex scheme.
As we have developed the scheme to the point where we understand exactly what is required, a big area—I will not say it was a surprise, but an area that has had a big shift from the initial estimate—is the interface to TfL. To discharge the volume of passengers off the high-speed system and on to the tube network, we are having to build a subsurface interchange to the TfL tube network that will cost somewhere around £1.2 billion.
Again, we are going back to first principles. Is that sized the right way? Have we looked at the right engineering solutions? We are taking many of the things that have got us to this point back to first principles. That work is being led by the Department, with stakeholders, to understand how we deliver a Euston station that serves the High Speed 2 station first and foremost, interfaces to the conventional network but nevertheless has to look at all the requirements of other key players in the area. It is hugely complex.
Q199 Chair: I appreciate it is a complex project. I see it from the window of the train I take every time I travel from my constituency into Euston. Forgive me for pressing a little further. Which bit of the design has to fundamentally change to deliver within the costings?
Mark Thurston: That is work in progress. Now we know we have the pause and we have some time to think about that, we have made it clear—and we have made it clear to the Public Accounts Committee—that we need to get this right. We have been working on this scheme for some years, and we must look at all requirements of all of the stakeholders at Euston to get us to a point where we have an affordable scheme. Because of the size of the cost challenge we have, you can imagine we will leave no stone unturned and every core requirement of the scheme will be considered for its affordability.
Q200 Chair: One last question from me before Ben comes in. What is the cost of effectively mothballing what is currently a live civil engineering project? There must be a cost to keep it in a state that is ready for it to be picked up again in the future. What is the cost of that?
Mark Thurston: In the cost settlement for Euston for the next two years, we have retained the best part of £200 million, but that is to complete a lot of the work that we already had in hand. We have utility diversions we need to complete so that we can open roads back up for local people in Camden. We need to complete the substation. We will complete the skills academy for local people and complete the accommodation. We obviously want to reduce the footprint, and the other one we will need to complete is the temporary taxi rank.
Once we have completed all those works, which will run out most of this year into the early part of next, then effectively we will shrink the site as best we can and make it secure. While that is going on we are considering, to your earlier question, all the requirements at Euston to go to an affordable scheme. Then we will start construction again at the end of the two-year funding window.
Chair: Thank you.
Q201 Mr Ben Bradshaw: What assessment have you made of the impact of the delays on the local community around Euston and any mitigation that you might be required to undertake?
Mark Thurston: There is active work going on now between us, Camden and local stakeholders to make sure that the meanwhile use of Euston station is as sympathetic to the needs of local people as possible. Of course, a bit like we have discussed here in Buckinghamshire today, the scheme is disruptive. We have roads closed and we have had to create a footprint for the station. The Minister and Secretary of State have walked around the site themselves and have been very clear with us, and of course we understand that our job now is to work with Camden to find a way of reducing as much as we can the area that the construction site takes up, so that, at least for the interim period, the local area is as amenable as possible to the residents of Camden.
Q202 Mr Ben Bradshaw: You said a moment ago that it was always envisaged that Old Oak Common would open before Euston, but can you point us towards the earliest business plan or any other document that set that out?
Mark Thurston: It was always in our thinking, from a railway operations and railway proving perspective, that we would open between Old Oak Common and Curzon Street first, but that was formalised through the Oakervee Review. On the back of the review that was done in 2019, it was considered that it would make sense to make more time to find a solution for Euston and open the railway from Old Oak Common west of London into Curzon Street.
Q203 Mr Ben Bradshaw: What are you doing currently to plan for the transfer of passengers after the opening of the Curzon to Old Oak Common link into central London?
Mark Thurston: That work started in conjunction with TfL. The initial intent when we open the railway is that it will only be three trains an hour and we expect that Old Oak Common in its final form, which we are now getting on and building, will be able to cope with passenger numbers to that extent. We are putting plans in place to look at what it would mean to have six trains an hour arriving at Old Oak Common. We are looking at the passenger modelling on that to make sure, to your question, that we can then discharge passengers off the high-speed system and on to either the Elizabeth line or the great western main line.
Q204 Mr Ben Bradshaw: What is the impact in terms of potential income from only being able to run three trains an hour, when you said earlier that your ultimate ambition was to run 17 trains an hour into Euston?
Mark Thurston: The business case model always assumed that we would open the railway initially on three trains an hour. It is quite modest in terms of the density of the service when we first open. Obviously, we are looking harder at that now in light of the delays to Euston.
Q205 Mr Ben Bradshaw: Can you confirm that 2041 is now the date for the opening of the final stage into Euston?
Mark Thurston: Yes, I think the Minister said—well, we are reappraising the timetable for Euston. Sorry; I thought you were going to say Manchester.
We are reappraising the timetable for Euston in light of the two-year pause. What we would expect to come out the other side of the exercise we have now started is a scheme that meets all stakeholder requirements, a scheme that is affordable and a scheme that is open to serve the railway, based on the fact that as we build further north, we have a terminus station that, in our current estimates, would be open somewhere around the mid to late ’30s to serve the number of trains beyond Old Oak Common to the Midlands.
Q206 Mr Ben Bradshaw: Hold on. Euston could happen after Manchester?
Mark Thurston: No, no. We are working on this and there is a phasing point around timetables, but our current thinking is that Euston will open before Manchester.
Q207 Mr Ben Bradshaw: What is your estimate of the time lag between Old Oak Common and Euston?
Mark Thurston: That is what we are now working out in light of the pause. We do not have an answer to that just yet.
Q208 Mr Ben Bradshaw: Is it eight, seven, 10 years?
Mark Thurston: We have a range for opening the railway between 2029 and 2033. Our estimate before the pause for Euston was from 2031 to 2035. Clearly, we will need to take stock of the impact of the next two years. My expectation is that when we come out the other side of this exercise, sometime in the second half of the 2030s we will have an opening date for Euston.
Q209 Mr Ben Bradshaw: Potentially, we are waiting 10 years while passengers are only going as far as Old Oak Common and not being able to transfer directly on to the—
Mark Thurston: Not that long.
Q210 Mr Ben Bradshaw: Less than a decade?
Mark Thurston: Certainly.
Huw Merriman: Perhaps I can just build on that. The aim, obviously, for Old Oak Common to Curzon Street when we first run HS2 trains is by 2033. The window we have with regard to the final phase up to Manchester is 2035 to 2041. The aim, as Mr Thurston says, is to run in parallel because we need Euston to be operational to handle all of the trains that will then be running once Manchester is delivered. That is why there is some logic in teaming them together.
I should just say that it remains the absolute commitment for us to deliver Euston, but because of the figures that you have just been through it is essential that we go back to the design team to find out whether that £4.8 billion is the cost for delivering Euston or whether that has not been correctly put together. It certainly was not towards the cost budget that was set. That was clearly a great disappointment. We must understand exactly what the real figure is and then we move towards the build out of it. The existing modelling was that two thirds of passengers would need a central London terminus when HS2 is fully operational, therefore it does need to come into central London. Old Oak Common works for the initial stage but it does not work for the completion.
The other thing I should just mention is that in terms of working with partners and stakeholders, on the day that we made the announcement, I spoke to the Leader of Camden Borough Council and we agreed that we would work in partnership in order to open matters up that can be opened up, but also work together to deliver Euston. It is very complex because we have a Network Rail station rebuild, we have the HS2 side and we also have what is one of the largest public sector land development opportunities over the top of it. That is working with our partners at Lendlease.
The message for us around those who put their parts of the cost in, or their design constraints—it may come to density and height of buildings, and they may have wanted the height to be reduced, for example—if we are not able to work with them to change some of those ambitions, we may not be able to deliver within cost. That applies to TfL. Do they really need that cost to open up the Underground? Everyone who works with us now needs to recognise that we must come within that funding envelope in order to deliver that project. All of us need to cut our cloth accordingly.
Q211 Jack Brereton: I think what we are concerned about is the extent to which the gap between opening Old Oak Common and Euston has grown. It has grown from what was going to be a two-year gap to now around eight years, which is a significant increase. Have you done any demand modelling on the impacts of that, particularly on whether there will be demand from passengers to terminate at Old Oak Common?
Huw Merriman: Again, as Mr Thurston said, we anticipate and are planning on three trains per hour, and Old Oak Common will able to deliver to that. It also has an interchange there to take those passengers off to the West Country, as well as to Heathrow via the Elizabeth line. Initially, that part will work. It is obviously a disappointment to us that we find ourselves in this position, and that is why it is essential that we first of all interrogate whether that £4.8 billion—
Q212 Jack Brereton: Have you done any modelling on this?
Huw Merriman: In terms of whether we can manage with three trains per hour to Old Oak Common?
Q213 Jack Brereton: No, on whether there is sufficient passenger demand. If they will not be terminating at Euston, will passengers want to terminate at Old Oak Common? That is the question.
Huw Merriman: They will then join the Elizabeth line and come in, so I do not see any reason—in the same way as if one comes into Euston—
Q214 Jack Brereton: You do not have any evidence, though, of whether that is the case?
Huw Merriman: We will write to you with what we have, but let us just look at this from a logical perspective. While it is absolutely essential that passengers come into a London terminus so that they are nearer to London, they will then move around. They may well end up finding themselves on the Elizabeth line once they come into Euston, eventually, because they may be going elsewhere, say to Canary Wharf. We always know that passengers will need to move. We need them to come into Euston because we need the capacity of Euston and also because it makes absolute sense to have a central London terminus for HS2 to start and end.
Q215 Jack Brereton: Surely we will still have services running on the west coast main line into Euston anyway. Why would I choose to terminate from Birmingham at Old Oak Common and not go straight to Euston on the west coast main line?
Huw Merriman: As I say, because our aim from the Oakervee Review was always to have passengers running from Old Oak Common up. That would always be the first move. What we have now is a further delay because of the build-out of Euston. It is more a question of extending time than it is changing what we had intended to do from 2019 when we said that Old Oak Common would be the first to open. That is our initial staging point but, as I say, our ultimate end point is to get Euston delivered and we will get it delivered.
Q216 Jack Brereton: In terms of the delivery of Euston, Oakervee also recommended that the responsibility for delivering Euston should be taken away from HS2 Ltd. Why do you think that was not done?
Huw Merriman: One of the things we will be looking at is how we deliver this station. As I say, it is a development of three parts: it has the HS2 element to it, it has the Network Rail side to it and it has the Lendlease side as well. We will be exploring the opportunities in terms of which organisation is best placed to deliver that project. It is a massive one. Obviously, we would look to lean on the private sector, but there is a considerable amount of risk involved in that as well so it may well be that it does not work for them.
I can tell you that we are looking at all options in terms of how best to get matters delivered, as well as looking at why that cost has come in as it has, whether that is the accurate cost, and whether the costs can be reduced by working with stakeholders so that they work within our envelope as well. There is an awful lot of work that is going on, and that is what we will be doing through that two-year pause.
I re-emphasise that when trains start at Manchester or end at Manchester, they will start and end at Euston if a passenger is doing the full journey.
Q217 Jack Brereton: During this interim period, do you expect there will be an impact on the west coast main line, those services that are going into Euston and the destinations that are currently served from Euston?
Huw Merriman: Not during that intervening period, because we will be pausing matters and going back to the drawing board.
Q218 Jack Brereton: No, I mean over the period of construction.
Huw Merriman: As Euston is developed, there is bound to be some impact in terms of station movements. I would anticipate that there would be. I do not know, Mr Thurston, if you wanted to come in.
Mark Thurston: To the earlier question about the operators, the train operators are already working with us. The train operator that is working with us on HS2 is also the existing operator, Avanti West Coast, for the high-speed services from Euston to the Midlands and beyond. What I envisage happening, Mr Brereton, is that there will be what we would call a service pattern of trains from London to the Midlands and beyond, and back the other way, which will combine a mixture of new high-speed services and the existing infrastructure, and there will be an integrated timetable that serves both. That would give passengers a choice.
The whole point of having the partner work with us now, for the reasons we touched on earlier, is so that we can start to consider some of the timetabling choices for services on the existing conventional line versus the timetable on what would be effectively a captive service from Curzon Street to Old Oak Common on the high-speed line. Having one operator look at that in the round I think was the right decision made by the Department.
That gives us the chance to then look at, to your question, what positive impacts we could have on the west coast main line. We would increasingly put more high-speed passengers on the new line, recognising that Curzon Street to Old Oak Common is just over 40 minutes. In terms of the speed of the journey, even with an onward journey from Old Oak on to the Elizabeth line, it will be infinitely quicker than going from New Street to Euston on the existing service, particularly if the West Coast partner chooses to introduce more stopping services on the existing system. There are lots of choices from a timetabling perspective that maximise the choice for passengers.
Q219 Jack Brereton: We have seen the impact of this at Stoke, having only half of our service during periods throughout the pandemic, and that has been the case across much of the Avanti network. Thank goodness now we have a lot of that service back, but do you have confidence in the shadow operator’s ability given the very poor performance that we have seen over a number of years?
Huw Merriman: That takes us more into the operation of the west coast main line and Avanti. All I would say is that back in January, the Avanti cancellation rate was 13%. It is now, in terms of Avanti-induced cancellations, just over 1%. You are right; there has been a restoration—there has been a 40% increase in the timetable and more trains now operating than when these issues came up at the beginning of July. Matters seem to have improved significantly. It was a decision by the Secretary of State to extend the Avanti contract by six months to see if this new timetable could be delivered. As things stand, there has been a great improvement, but a decision will have to be made about the longer term. If the train operator performs, that will obviously weigh very heavily on our minds.
Q220 Jack Brereton: I just want to ask one final, separate question about road safety audits. I am sure you saw that I asked the Secretary of State about this and the fact that HS2 is performing the role of overseeing organisation, which is not normal. Usually it would be highways authorities or National Highways that would be undertaking this sort of role. That is not in line, necessarily, with national guidelines. Why was it decided that HS2 would undertake this role of scrutinising the safety of those road projects itself?
Mark Thurston: The road projects you are referring to are where exactly?
Jack Brereton: There are road projects that HS2 are building up and down the line, where you are having to move roads, move bridges—
Mark Thurston: Yes, I understand.
Q221 Jack Brereton: You are designing a huge number of road projects up and down the line. Why is it that you are also undertaking the RSA role? How can there be independence?
Mark Thurston: I understand your point; I thought you had a particular area in mind. You are absolutely right; we have built new junctions off motorways to facilitate the construction. They will be permanent. Some of those we will reinstate back to their original form. Again, if you take what we have seen today, we are building and changing road layouts to facilitate the railway.
The powers for that are within the Act. We could choose to use the local authority. As a case in point, there is a major remodelling of the M56 required on the route into Manchester and we are actively engaged with National Highways about who is best placed between us to take the lead as the agency on behalf of Ministers and the Department to build. Invariably, though, because that is not our competence, we cannot sign public roads back into use until that has been signed off by the local highway authority. As much as we might appoint a competent consultant to do the road safety audit, we cannot bring those—
Q222 Jack Brereton: Do you recognise that there have been some very serious concerns about the safety of some of the schemes that have been designed, including some that have been built out?
Mark Thurston: I was not aware there was a huge concern. That has not been brought to my attention. If there are specific cases that you want me to follow up, I am happy to do so, but rest assured that we would never bring a road into service unless the local authority agreed to it.
Q223 Jack Brereton: We have heard today that traffic lights had to be put on a road because the local authority did not deem it safe, as it was left, to use by the public. This is not just one case; there are multiple cases of roads that have been designed, approved and taken through the RSA process by HS2 itself, scrutinising itself. This process is not safe.
Mark Thurston: I do not subscribe to the idea that we are doing work that is not safe. That I would take exception to. I would rather take this issue away and write back to you on it, because this specific issue has not been raised with me. As I say, where we are designing roads and building roads, that work is done in conjunction with the highways authority, and certainly we would not bring a road into use unless the highways authority had signed off on the design and the final construction to well-established standards. If there is a broader concern, let me take that away and I will write back to the Committee.
Q224 Ruth Cadbury: I will just ask a couple of questions about Old Oak Common, which will be used as the terminus for far longer than had originally been planned. This is probably a question for Huw. The Department has repeatedly said that it has always been planned for Old Oak Common to open some time ahead of Euston. That is even more true now. Could you point us towards the earliest business plan or documents that set out that Old Oak Common was always going to be used for HS2 trains?
Huw Merriman: Again, perhaps I will clarify from my understanding, but we will happily write to make sure that it is absolutely correct. It was post the Oakervee Review that it was contended—that is 2019—that Old Oak Common would go ahead of Euston. Perhaps, given that we have discussed it, albeit we have both given that answer, it might be prudent if we added that to our list of matters that we will confirm in writing to you.
Q225 Ruth Cadbury: Talking about Old Oak Common as an interchange, I am assuming that the business case released in 2020, where there is the interchange at Old Oak Common between the Elizabeth line, Avanti West Coast into Euston and GWR into Paddington, is still the case. There are another six lines that are in or around Old Oak Common. One of them serves my constituency. Where is the Department or HS2 on looking at potential interchanges between the HS2 Old Oak Common station and any of those lines, most of which would require an additional station and access?
Huw Merriman: Because we are going quite operational, I might hand over to Mr Thurston.
Mark Thurston: I think I understand the question. A six-platform HS2 station, eight-platform conventional. You have to think that there is a 14-platform super-hub there that combines the great western main line, HS2 and the Elizabeth line. That is the final product, and that is what we are building. The assumption is that passengers can move between all three services at one interconnected hub at Old Oak Common when it is finally constructed. That is what we are doing. I do not know if that helps change your frame—
Q226 Ruth Cadbury: No, that is fine, but if you look at a map of the area you also have passing through there the southern link to Clapham Junction, the North London line, the West London line and potentially—this is something that local authorities out our way are bidding for—the West London Orbital, where the track is there but it is not yet a passenger service. You also have the Central line running just past Old Oak Common and Willesden Junction just to the north. There is a potential for quite a big interchange there. What consideration is being made around level access? There are a lot of level changes and rail lines to get up and over.
Mark Thurston: Just to be clear, we are funded and are working on the interchange between the three lines I mentioned. We do not encompass all those other lines. Old Oak Common will be one of the most sophisticated stations we have ever built in this country and will fully comply with all of the requirements like level access, among other specifications, to ensure that it is a 21st-century station and can deal with all customers, regardless of what constraints or characteristics they have. I can assure you of that.
Huw Merriman: Perhaps I could just add to that. Transport for London has undertaken an analysis that has given them comfort—and therefore us comfort—that the 12 trains per hour on the Elizabeth line will be able to cope with those people who come down to Old Oak Common when we have the three trains per hour before Euston is built.
Q227 Ruth Cadbury: They have assured you that it can be done?
Huw Merriman: Yes, they have provided a study on that.
Q228 Gavin Newlands: Where are we with the Golborne link, in relation to the IRP? Mr Thurston, have HS2 received any instructions with regard to the replacement for the Golborne link?
Mark Thurston: No. We took it out of the Bill, as you know, and the issue sits with the Department.
Huw Merriman: Yes, it is something that we are continuing to look at and work with the Treasury on, in terms of alternatives to Golborne. It remains a work study for us to come up with those alternatives.
Q229 Gavin Newlands: Obviously, the Golborne link is not just about linking to Scotland, but from a Scottish perspective it is hugely important. I have asked many times when HS2 will get to the Scottish border. The Scottish Secretary replied, “Which HS2, the one going north or Galashiels coming south?” Make what you will of the Scottish Secretary’s knowledge of it.
Yesterday, my hon. Friend the Member for Glasgow East asked the same question, or when HS2 would come to Glasgow, and the Under Secretary said that he would write to your Department seeking an answer. I look forward to hearing the response from the DfT. Do you have any idea when it might reach Scotland? Can you give me a date or a decade?
Huw Merriman: Well, no, because we are currently planning towards Manchester. We then have to tie in all of the existing services that currently take trains to other parts, not just to Scotland but to Wales as well. To be clear on the Golborne link, the alternatives need to come in within the same cost envelope to fit within the IRP costing. We are exploring with the Treasury the alternatives, but those alternatives need to come in within the same cost.
Q230 Gavin Newlands: I appreciate that. Can I read a quote to you from a previous Secretary of State for Scotland, around the time that there was an MOU between the Scottish Government and the UK Government on this? I paraphrase, but: “The Government have made it clear that their long-term commitment is to a truly national high speed network...we have made a commitment to them” i.e. the Scottish Government “that, once we have got the second hybrid Bill into Parliament, we will then start serious work with the Scottish Government” with regard to high-speed rail going to Scotland. Given that we are now on the third hybrid Bill, let alone the second, have any of those discussions taken place, so far as you are aware?
Huw Merriman: Certainly no discussions have taken place with me. The discussions I have are: what are the alternatives to the Golborne link and how can we develop those within the same cost envelope? I appreciate that when HS2 was first announced, many, many years ago, there were designs to take it all the way down to near my constituency, down to Kent. It has had its changes, but to the Committee I want to commit that it will run from London Euston to Manchester. Then we are looking at plans to take it further east as well. My ambition is to take it where we can.
Q231 Gavin Newlands: I will touch on Leeds in a second, but I have one final question on this. In the same document, it states that it remains to be demonstrated that the non-tilt hybrid trains that may operate at high speed on the classic west coast main line would be capable of the same levels of performance as today’s Class 390 Pendolinos on routes north of Manchester. They may not be capable of doing so, “i.e. journey times between North West England and Scotland could be potentially longer than at present”. I am just seeking clarification. Is there the potential that the journey times between Scotland and London may be longer because of the performance of the hybrid trains?
Mark Thurston: That is not our expectation. To your earlier question, once we have completed phase 2a and you have built the infrastructure between Birmingham and Crewe, subject to a timetabling commitment, you could run high-speed trains fast all the way to Crewe and then on to the existing line, at least as fast as they go today on the existing west coast main line to Scotland.
Q232 Gavin Newlands: The point is that a lot of that track is quite curvy in nature. The Pendolino trains can handle that better, potentially, than the trains that you will put on it.
Mark Thurston: We are designing a 21st-century train set to run on High Speed 2, and our expectation is that the journey time would not be impeded by a track characteristic.
Q233 Gavin Newlands: I appreciate that. In terms of Leeds, in a former life, this Committee certainly had strong opinions on the impact of HS2 and the IRP or Northern Powerhouse Rail on Leeds and Bradford. Where are we with the link to Leeds?
Huw Merriman: Yes, I seem to recall, in a previous incarnation, writing—
Gavin Newlands: Yes. I did not want to quote anything particularly, Minister, but—
Huw Merriman: It is fine. I have also contacted the Chair to say that I am most sorry for the delay in responding. We continue to work with our colleagues in the Treasury on that study. It is a study that I am very keen to see put out there. How do we get the HS2 trains to Leeds? Is that possible? If it is not possible, land has been captured and it unlocks money for the West Yorkshire mass transit scheme as well. All I can say is that I work on this every day.
My commitment to exploring the opportunities within the IRP for Bradford remains undiminished. I recently visited Bradford to meet with the council team there. The mandate was, if you like, put in train by the Prime Minister’s ambitions last summer in terms of exploring opportunities for Bradford, and those are opportunities that I am exploring.
Q234 Gavin Newlands: I appreciate the apology that you have made to the Committee on that, because it has been a year now, in terms of Leeds. You would not like to set a deadline for that study to put some pressure on your colleagues in the Treasury at all?
Huw Merriman: I should just say that my point was that I am sorry that my response overall has taken longer. It is the letter-writing that should have been done. What was your other point, so I can be fulsome with my apology and answer your question?
Q235 Gavin Newlands: I think you said previously it had been a year, in terms of getting back to the Committee on the Leeds situation.
Huw Merriman: A commitment was made a year back, in November, to publish a study, and so that is what needs to be published. It was never coming out at that time, but I recognise that it would have been expected—it certainly was by me when I was Committee Chairman—to be out there by now. I remain very keen that we get that study out there and then crack on with that work.
Q236 Jack Brereton: Mr Thurston, you just mentioned that an alternative to Golborne might be running services at Crewe. That could be a possibility. The only problem is that Crewe is rammed. There is no capacity at Crewe. Are you looking at that as an issue—at what potential capacity issues there are at Crewe, and at the impact on those existing services if they were to be swapped out for HS2 services?
Mark Thurston: You make a sensible observation. Crewe is an important connection point on the existing railway, and it will equally become an important connection point for the new railway. There is work to do to remodel Crewe. We are working very closely with Network Rail to do that. As I said, just to be clear, if we were to run trains from London through the West Midlands and to Crewe on the high-speed line, the expectation is that there will be a connection to the existing line. That will need to be designed and modelled, and that is work that is in train. The challenges that you are raising are in our thinking now.
Q237 Grahame Morris: I wonder if I might just continue with a little bit of clarification on that, Mr Thurston, in relation to the western link and the Golborne link alternative. It is correct, is it not, that the enabling works that are proposed to the Hough Green junction would facilitate the Northern Powerhouse Rail proposals, the east–west link? Is that something that you are familiar with?
Mark Thurston: I am very familiar with Hough Green. Regarding the interface between Hough Green junction and what it does for the Northern Powerhouse Rail scheme, I would have to confirm back to you if that would be helpful.
Q238 Grahame Morris: I am sorry to go back to Old Oak Common, but are you familiar with HS1 and Eurostar?
Mark Thurston: Yes.
Q239 Grahame Morris: Isn’t there some precedent there? My recollection is—it was a Labour Government—that it was always planned that it would be St Pancras International. But didn’t HS1 and Eurostar go into Waterloo until about 2007, and eventually, when the signalling and track works were carried out, carried on to St Pancras?
Mark Thurston: That is correct, yes.
Q240 Grahame Morris: Can I ask you for some clarification about the jobs? You mentioned the numbers earlier, particularly apprentices. It is something I have raised in parliamentary questions. What are the latest figures you have for the jobs that have been created by HS2? You mentioned £23 billion going into the local economy.
Mark Thurston: Our current estimate of the workforce is somewhere around 28,500 people. We are likely to peak somewhere north of 30,000 people. Of those, we are over 3,000 workless job starts now. We are at 1,100 apprentices. We have made a public commitment to 2,000 apprenticeship starts and we are over 1,100. In terms of HS2 becoming a significant employer in the construction and engineering sectors, we are not insignificant now.
Q241 Grahame Morris: When the Committee visited Manchester as part of our Integrated Rail Plan inquiry, we did meet with representatives of HS2, and they indicated that there were recruitment problems. Has that been compounded because of the specialist engineering work and the scale of the works that were going on? Has that been compounded by the pause and rephasing of the works?
Mark Thurston: I would make two points. One is that there is a lot of work going on across the sector broadly to bring people into it, because we know that the sector has an ageing workforce. Bringing apprentices and graduates in at the bottom end of the workforce is super crucial. It is not just HS2; we are working with organisations right across the country to increase that.
To your question about the pause, the market was quite hot and the pause may give us a little bit of breathing space. We are demobilising people off those projects that are being deferred or slowed down, and we are looking to redeploy those resources into other parts of the programme. In some respects, perversely, the pause may just take some of the heat out of the employment market.
To the point the Minster made earlier, the inflation pressure that we have seen across the economy has manifested itself in salaries and wages. We are mindful of making sure that we do not unduly overheat the market as we continue to recruit. There is a uniform approach, and all of our major contractors and consultants have skills and employment plans. This Committee should take confidence in the work we have done there to continue to create skilled jobs right across the UK.
Q242 Grahame Morris: I accept that, but from the discussions we had at the time, it is not without its problems. People are having to commit to very long hours, often in very difficult conditions. I do not underestimate the challenge of recruiting sufficient people of the right calibre to undertake all of that work.
Can I just ask one more, Chair? It is something that arose this morning. We on the Hybrid Bill Committee lay great store in the efforts that are made to give statutory undertakings and assurances to petitioners, and I was very disappointed to hear this morning from some of the parish councils and individual landowners that we met that some of those statutory undertakings had not been honoured. Is that a common practice in the early phases of HS2?
Mark Thurston: I will not sit here and say that we have met every undertaking and assurance. Just to put this into context, in the Phase 1 Act there are over 4,500 undertakings.
Grahame Morris: Yes, there are a volume of them.
Mark Thurston: We have discharged 308, and 800 of those are no longer applicable; that means that there are somewhere around 3,500 U&As that are live. They are all enshrined in many of our works contracts. We put the responsibility on them. Where those contractors fall foul and do not comply, it is flagged, we raise it and, in fact, I have to write personally to the Department to set out why that happened and what we are doing about it.
I would say that we have seen a few worrying trends around lorry movements in the early days as drivers were not quite sure what routes they should use or the timings of that, but generally speaking—again, coming back to the earlier conversation—folks on the ground are much more attuned to their obligations now. But we are not complacent. To your point, there are many of them, and we are vigilant in making sure that the supply chain complies.
Q243 Grahame Morris: I accept it is a weighty tome of legally binding assurances and undertakings, but given that these individuals took the trouble to meet us this morning, can I or the Committee write to you and highlight the three that were taken up with us this morning? Perhaps you might respond in your letter to the Committee.
Mark Thurston: Please do.
Q244 Paul Howell: We have talked a lot about cost extensions and things like this. We have now just started to talk about the disruption to supply chains, which gives me concern. One of the opportunities for you to get cost savings from your supply chain is to give the supply chain certainty about what is going on. Can I encourage you to make sure that you are working as well down the chain, in terms of making sure that they have clarity as to where to go, so that they can invest at the right time and place?
Huw Merriman: Can I tie in with that? It is a very fair challenge. One of the positives that we are seeing at the moment is that there is a £20 billion per year capital investment in transport going on for two years. That is a 44% increase, in cash terms, from 2019. There is the opportunity within all of that to use economies of scale to provide reassurance to the workforce, which may be transitioning from one project to another great transport project, that we will utilise that. Absolutely, we will take that challenge head-on.
Chair: I thank both our witnesses for their time this afternoon. We look forward to receiving the further information that you have undertaken to provide to us. Could I also reiterate our thanks to the Railway Centre here for hosting us? They have set the bar high for location-appropriate meeting points for Select Committees. I also thank our other guests whom we met earlier today, who were very helpful in giving us some information and shaping our questions this afternoon. To you all, thank you very much.