Fresh fears over HS2 costs

The £50 billion figure includes contingency funding but this could be used to mask cost increases, said a report by MPs on the House of Commons Public Accounts Committee.

"We are sceptical about whether the Department for Transport (DfT) can deliver value for money for the taxpayer on HS2," the committee said.

The report said HS2 was one of a number of "ambitious, expensive transport infrastructure programmes" for which the DfT was responsible.

It continued: "We are not convinced that these programme are part of a clear strategic approach to investment in the rail network.

"In particular, recent proposals for a railway connecting cities in the north of England - a possible HS3 - suggest that the department takes a piecemeal approach to its rail investment, rather than considering what would benefit the system as a whole and prioritising its investment accordingly.

"The department told us it will deliver the full HS2 programme within its overall funding envelope of £50 billion. However, this funding includes a generous contingency and we are concerned that, without appropriate controls, it could be used to mask cost increases."

The committee also spoke about expansion at Ebbsfleet in Kent following the building of the Channel Tunnel high-speed rail link now known as HS1.

The report said: "When it comes to the wider regeneration benefits, insufficient planning meant that regeneration benefits in Ebbsfleet did not flow from HS1 as expected.

"Although the department told us that it has learned and is applying these lessons on HS2, it needs to set out clearly who is responsible for ensuring that benefits are realised, and how that work will be co-ordinated."

Launching the report today, the committee's chairman Margaret Hodge (Lab, Barking) said: "Investment in major rail infrastructure programmes takes a long time and costs a lot of money.

"It is therefore hugely important to ask the right questions and make properly informed judgments on priorities. Yet the Government takes decisions without a clear strategic plan.

"For instance, the Government recently announced proposals for HS3. It did not carry out an assessment of HS3 before it gave the go-ahead to HS2 and it therefore did not test whether improved connectivity in the North was a greater priority.

"The department has still to publish proposals for how Scotland will benefit from HS2, including whether the route will be extended into Scotland."

She said the DfT "should set out a long-term strategy covering the next 30 years for transport infrastructure in the UK, and use this strategy to inform decisions about investment priorities and specific investment decisions".

HS2 will cut a 45-mile swathe through Staffordshire countryside where residents say their homes will be blighted by noise as trains run at speeds of 225mph every two minutes.