HS2 PHASE I

Rating: The NISTA / SRO Delivery Confidence Assessment (DCA) rating remains at RED at 25/26 Q4. This is primarily due to delivery of HS2 being unachievable against Baseline 7.1 (approved at Notice to Proceed in April 2020), as confirmed through correspondence between the HS2 Ltd Chief Executive Officer (CEO) and the Secretary of State in 2025. In response, the Department and HS2 Ltd have progressed a comprehensive reset programme, alongside strengthened governance and delivery controls. Key developments include: • Continuing the HS2 reset under the leadership of CEO Mark Wild and Chair Mike Brown, with Board capability strengthened through new Non-Executive Director appointments. • HS2 Ltd providing assured cost and schedule ranges to the Department, approved by the Ministerial Task Force in January 2026, with further conditions (including the outcome of the Strategic Scope Review) addressed ahead of publication and announcement by the Secretary of State on 19 May 2026. • Commencing development of a new delivery baseline (Baseline 8.0/8.1), supported by a staged review process to ensure robust assurance and programme integration. • Maintaining tight in-year financial and performance controls through the Performance Management Plan (PMP), contributing to improved construction productivity and delivery within annual budgets. • Delivering FY25/26 Phase 1 expenditure and maximising productivity in line with budget (£6.967bn, 0.4% below Supplementary Estimates) and agreeing a £7.1bn funding allocation for FY26/27. • Progressing Euston Programme activities, including definition of an integrated Euston Station Spatial Plan and delivery schedule, the stand-up of the Euston Delivery Company in April 2026, continuation of enabling works and exploration of a private finance delivery model for the HS2 station. Overall, the Department has focused on resetting the programme to establish a credible, deliverable baseline while maintaining cost control, improving productivity, and strengthening governance arrangements.

Schedule: As at 25/26 Q4, the previous delivery into service range of 2029-2033 is unachievable, as confirmed through correspondence between the HS2 Ltd CEO and the Secretary of State in 2025. In response, the Department and HS2 Ltd have progressed a comprehensive reset programme. Key developments include: • The Department has tasked the HS2 Ltd CEO with progressing a comprehensive reset to establish realistic cost and schedule estimates for delivering the remaining scope at the lowest reasonable cost. Assured schedule ranges were provided to the Department in December 2025 and approved by the Ministerial Task Force in January 2026, with further conditions (including the outcome of the Strategic Scope review) addressed ahead of publication and announcement by the Secretary of State on 19 May 2026. • The reset will deliver updated schedule ranges for key service configurations (Old Oak Common-Birmingham, Euston-Birmingham, and Euston-North West) and inform development of a new schedule baseline (Baseline 8.0/8.1). Baseline development commenced in January 2026 and is subject to a progressive integrated review and assurance process. • Whilst the reset is ongoing, the Department continues to manage HS2 Ltd through strengthened in-year controls, including a Performance Management Plan for 2026/27 setting out key milestones, targets and productivity metrics. Enhanced governance and assurance arrangements, aligned to the James Stewart Review, remain in place to support in-year delivery and schedule discipline.

Cost: At 25/26 Q4, the departmentally agreed Whole Life Cost (measured in £m) for HS2 is exempted. The Department does not report on Whole Life Cost as it does not reflect the true up-front cost for building HS2. Key developments include: • The Department has tasked the HS2 Ltd CEO with progressing a comprehensive reset to establish realistic cost and schedule estimates for delivering the remaining scope at the lowest reasonable cost. Assured cost ranges were provided to the Department in December 2025 and approved by the Ministerial Task Force in January 2026, with further conditions set ahead of public announcement, including consideration of the Strategic Scope Review. As the Secretary of State publicly announced on 19 May 2026, the expected cost of delivering HS2 is now in the range of £87.7, £102.7 billion. This is expressed in a mixed price base, including the cash outturn of works to date and the costs of future work excluding inflation. • The HS2 reset is ongoing and work continues to progress on development of a new cost baseline (Baseline 8.0/8.1). Baseline development commenced in January 2026 and is subject to a progressive integrated review and assurance process. • Whilst the reset is ongoing, the Department continues to manage HS2 Ltd through strengthened in-year controls, including a Performance Management Plan for 2026/27 and application of financial controls to support affordability and delivery confidence. • Funding provided through the Spending Review 2025 settlement supports continued delivery between the West Midlands and London Euston, alongside reset activities. Cost control remains focused on improving productivity, strengthening governance, and embedding lessons learned to ensure the programme can be delivered within future agreed budgets.

Source: NISTA Major Projects Annual Report 2025-26 (data)

Rating: Compared to financial year 23/24-Q4, the Infrastructure Project Authority's Delivery Confidence Assessment rating at 24/25-Q4 remained at RED. This is primarily due to the following factors‚ Since the beginning of 2024, HS2 Ltd has been in Performance Default due to forecasts irrecoverably exceeding the Funding Envelope (£44.6bn - 2019 prices) as well as expressing risks to the delivery into service (DiS) schedule range of 2029 to 2033. The Department has made significant progress in delivering the package of measures announced by the Secretary of State, including: • Reinstating the Ministerial Task Force ensuring greater ministerial oversight and accountability on HS2 Ltd. • Writing to the CEO of HS2 Ltd making it clear that after safety, the primary objective is to deliver the remaining scope at the lowest reasonable cost to the taxpayer, and requesting an initial assessment on the current position of HS2 and his plans for reset. • Starting the reset of HS2. The Department and HS2 Ltd have created a joint single programme and established task forces to oversee various elements of reset with a view to establishing a new and robust baseline in 2026. The reset programme will embed the recommendations from the independent review of major transport projects led by James Stewart. • Working collaboratively with HS2 Ltd to agree a ‘Bridging Protocol’ for the transition period until a new Baseline has been agreed. These interim arrangements provide the Department a greater level of transparency and control of HS2 Ltd expenditure whilst the programme undergoes reset.

Schedule: The project's end-date at 24/25-Q4 is scheduled to be 30/06/2030. This is primarily due to the following factors‚ Since the beginning of 2024, HS2 Ltd has been in Performance Default due to forecasts irrecoverably exceeding the Funding Envelope (£44.6bn - 2019 prices) whilst also expressing several schedule risks to the delivery into service range of 2029 to 2033. DfT has tasked the CEO of HS2 Ltd with undertaking a comprehensive reset of the programme to recommend revised cost and schedule estimates and deliver the remaining work at the lowest reasonable cost. This work will continue over the coming months and the Government will report on progress. The reset will deliver revised ranges for cost and schedule, informed by an agreed method for cost estimation and the recommendations from the independent Major Transport Projects Governance and Assurance Review led by James Stewart. Whilst the reset is ongoing, the Department will manage HS2 Ltd to tighter in-year controls, including targets and metrics to deliver within an annual funding settlement.

Cost: The project's departmentally agreed Whole Life Cost at 24/25-Q4 (measured in £m) is exempted. This is primarily due to the following factors‚ The Department does not report on Whole Life Cost (WLC) as it does not reflect the true up-front cost for building HS2. DfT has tasked the CEO of HS2 Ltd with undertaking a comprehensive reset of the programme to recommend revised cost and schedule estimates and deliver the remaining work at the lowest reasonable cost. It is important to get this right, which is why the reset will take time and involve close working between HS2 Ltd, the Department and the rest of government. Until the reset of the programme concludes, the Department does not have an agreed estimate of how much the project will cost.

Source: NISTA Annual Report 2024-25 (data)

Rating: Compared to financial year 22/23-Q4, the Infrastructure Project Authority's Delivery Confidence Assessment rating at 23/24-Q4 remained at Red. This is primarily due to the following factors. HS2 Ltd has been asked to update its cost estimate to consider the revised scope of Phase 1 and the cancellation of the wider scheme reflecting reduced scope and the costs of any changes. The Department and HS2 Ltd continue to work collaboratively to develop a joint plan setting out an enhanced approach to governance and controls on the project, alongside planned internal changes to accountabilities and leadership structures within HS2 Ltd. Parliament will be updated once a revised cost estimate has been agreed and new targets provided to HS2 Ltd._x000D_ _x000D_ Work has also commenced on an updated Business Case for the revised programme, following the Network North announcement. This will be published in due course and provide an economic assessment following decisions being made on the HS2 train services running to and from Euston.

Schedule: The project's end-date at 23/24-Q4 is ARMP adjustments - Project not yet in a position to give cost/schedule. This is primarily due to the following factors. The forecast date for initial HS2 services between Birmingham Curzon Street and Old Oak Common remains within the range of 2029 to 2033._x000D_ _x000D_ An updated delivery-into-service range for services to Euston will be provided in due course.

Cost: The project's departmental-agree Whole Life Cost at 23/24-Q4 is ARMP adjustments - Project not yet in a position to give cost/schedulem. This is primarily due to the following factors. The Department does not report on Whole Life Cost (WLC) as it does not reflect the true up-front cost for building HS2. Work on managing cost pressures continues, and HS2 Ltd has undertaken a review of Phase 1's estimate at completion (EAC), advising that the updated EAC for the Phase 1 is 49 billion to 57 billion (2019 prices). However, the Department considers that the outturn cost of Phase 1 (pre-Network North changes) should lie between 45 billion and 54 billion and has been clear that HS2 Ltd should deliver at the lower end of this range even if that entails difficult choices. The Department has now also instructed HS2 Ltd to update its EAC to consider the revised scope of Phase 1 in light of the Network North announcement. Parliament will be updated on a new cost range once the revised EAC has been agreed

Source: IPA Annual Report 2023-24 (data)