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Ministers’ prior knowledge of HS2 cost overruns ‘stark-staringly obvious’

The transport secretary has denied that parliament was misled over the costs of HS2.

Grant Shapps (pictured) was questioned by shadow minister Andy McDonald in a parliamentary hearing yesterday over when exactly the government knew the rail project’s construction would exceed its planned budget.

Earlier this week a report by HS2 chairman Allan Cook revealed that the scheme’s current design cannot be delivered for less than £72bn, or before 2028. Previously the project’s budget was £56bn and its targeted opening date was 2026.

The report blamed difficult topography, ground conditions and environmental standards for the difficulties.

Mr McDonald said: “We have consistently been told by the secretary of state’s predecessor [Chris Grayling] and the then ministerial team that the 2015 figure of £55.7bn for the entire project was the full cost of HS2 and that there was no reason to change it.

“It is hard to conclude anything other than it has been plain and obvious for some considerable time that this was not accurate.”

He added: “There hangs over this government the unpleasant smell that parliament may have been misled – however unwittingly – given that it is stark-staringly obvious that when the minister responsible for HS2 [Nusrat Ghani] stood at the dispatch box a matter of weeks ago to tell the house that there was only one figure and one figure alone for HS2, that assertion was completely and totally inaccurate.”

Mr Shapps replied that he received Allan Cook’s report at the beginning of August and shared it in parliament as soon as it had reopened. He did not comment on other minister’s actions.

He added that the project has changed costs over the years: “I seem to recall that this was originally a project by the previous Labour government, and that when it was conceived the whole thing was going to cost about £13bn,” he said.

The minister added that an issue with estimating project costs is that quoting project costs at their outset doesn’t allow for inflation.

“On that basis, every project will always be said to have overrun on cost, although of course the benefits probably improve as well. We have to find better ways of doing all this,” he said.

Last year former HS2 boss Doug Thornton claimed the project’s initial estimates were hundreds of millions of pounds too low.

Chief executive Mark Thurston said at the time that he was confident the project had a budget “we can stand by”.

Mr Shapps also rejected a call from another MP to suspend early works while the Doug Oakervee-led review of the project decides whether and how it should proceed.

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