Budget has risen from £56bn to £106bn, says leaked review © HS2 Ltd / Absolute Photography Ltd
Budget has risen from £56bn to £106bn, says leaked review © HS2 Ltd / Absolute Photography Ltd

Firms warn of 'devastating impact' of halting HS2

21 January 2020

Contractors, including Hitachi and Schneider Electrics, warn of “devastating impact” halting the HS2 rail project would have on the industry. 

Over 40 businesses and public leaders across the UK signed an open letter warning the government that stopping the project prematurely would risk thousands of jobs and raise the cost of future schemes.

HS2, which plans a high-speed railway connecting London, Birmingham, Leeds and Manchester, has seen the budget balloon from £56bn to £106bn, according to an official review leaked by The Financial Times. A final decision on the project by the government is awaited. 

The letter said the project was already supporting around 10,000 jobs and would support 30,000 at peak construction and train-building activity, along with 2,000 apprentices.

“A hiatus of this duration in government investment, at this time, would have a devastating impact on jobs in the sector and risk delaying the infrastructure revolution by a decade,” said the letter.

Firms have come together to ask the government to consider impacts on future infrastructure procurements, jobs, manufacturing, and investment and export potential.

Contractors warned that if the project was cancelled or delayed at its current stage government infrastructure projects would go up in cost in the future. 

It said: “To date, we have very much welcomed the government’s commitment to increased infrastructure spending and investment. However, by putting a project of such national importance at risk, future infrastructure plans will also be threatened, as will the government’s desire to level up the UK economy.

“The industry will have to include additional consideration for risk when pricing for future contracts, to bear in mind the risk of the government cancelling future projects in the middle of delivery. To put it as clearly as possible, future infrastructure projects will cost the Government more, should HS2 be cancelled at this stage.”

The letter said “the cancellation of a government project so far progressed would be unprecedented in the history of British construction”.

Signatories include Bombardier Transportation, Bouygues, Colas Rail, Mott MacDonald, J Murphy & Sons, Nichols Group, Serco, Siemens Mobility, SSE Enterprise Rail, Northern Rail Industry Leaders, and the University of Birmingham.

As well as company executives, the heads of the Association for Consultancy and Engineering, Build UK, the Civil Engineering Contractors Association, Confederation of British Industry and Federation of Small Businesses also signed the letter.

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