Cost of HS2’s Euston leg balloons to more than £7.5bn

The cost of High Speed 2’s Euston leg has ballooned to more than £7.5bn and risks approaching £10bn when accounting for inflation, according to leaked government documents.

Documents from the Department for Transport suggest the infrastructure project’s spiralling costs will be even higher than expected, in a story first reported by the Financial Times.

The Department for Transport said it did not comment on leaks. However, its spokesman would also not reject the claims. They said: “Taking HS2 to Euston is a key part of realising HS2’s contribution to national economic growth.”

The leaked documents suggest that building a new HS2 station and tunnels would cost £6bn in 2019 prices.

Meanwhile, a report released by the National Audit Office earlier in 2024 said upgrading the overcrowded existing Euston station next door would carry a £1.5bn price tag.

Because inflation has driven up prices by more than a fifth since the end of 2019, the real cost could be above £9bn.

Louise Haigh, the former transport secretary, announced in October that the Government would be taking urgent measures to “get a grip” on the spiralling HS2 costs. Ministers have launched an independent review of the project’s chaotic finances.

At the start of the year, Sir Jon Thompson, the HS2 boss, estimated the total cost could beat previous estimates to hit £66.6bn. This could rise even further in coming months and comes after a string of previous underestimates.

For example, it emerged last month that the cost of a bat shed built to protect the winged creatures in the woodland along the line had exceeded £100m. The project’s chairman said there was “no evidence” the bats were actually at risk from the trains.

Rishi Sunak, the former prime minister, last year scrapped the northern leg of HS2 from Birmingham to Manchester to rein in the ballooning bill.

This makes the funding of Euston all the more fraught politically. Mr Sunak had suggested that a new public-private partnership could save taxpayers £6.5bn on the redevelopment.

However, the leaked documents said the savings would be “much more modest” of £1.4bn to £2bn, according to the FT.

A Department for Transport spokesman said: “Taking HS2 to Euston is a key part of realising HS2’s contribution to national economic growth, which is why this Government confirmed funding for tunnelling from Old Oak Common to Euston in the Autumn Budget. Ensuring HS2 trains terminate in central London will also catalyse private investment into the station and local area.

“We are working at pace to explore a range of options for Euston, including funding and we will set out further details in due course.”