Fallout from the HS2 cancellations

Recently The Industry Forum welcomed Sir John Armitt, Chair of the National Infrastructure Commission, to lead a roundtable on the subject of ‘HS2 cancellation fallout.’ The Battersea Power Station Development Company hosted the meeting and their CEO, Don O’Sullivan, welcomed guests. The meeting was chaired by Andrew Smith, Chief Economic Adviser to the Industry Forum. Due to the recent change of government, no final and costed replanning has been completed. Possibly 30% of the original budget can be saved but there are consequences: plan changes and delays have big impacts in losing key skilled staff on projects and discouraging private sector confidence in providing finance. An interesting fact that emerged was that most infrastructure projects come in within 10% of their budgets; it’s the big ones, subject to political scope changes and inconsistency, that suffer the headline cost overruns. These are lessons which will apply to new large projects such as building a further Thames crossing. They will undoubtedly be considered as the government prepares its revised infrastructure investment plan due in Spring 2025. Infrastructure improvement (physical and digital) and capital projects funding are key factors that will affect the ability of the UK to meet the government’s vital growth objectives. The Industry Forum looks forward to convening more meetings to tease out the inevitable obstacles to change and how to overcome them.