Tussell Factsheet - HS2

As the Oakervee Review decides whether to recommend the government continue, scrap or curtails HS2, this factsheet brings into sharper focus how much has been spent already, who with, what on and how much is committed for the future.

On the 21st of August Transport Secretary Grant Shapps announced a review into HS2, stating the government needed "clear evidence" before deciding to go ahead with the controversial scheme.

While discussions of HS2 primarily focus on ballooning projected costs, in this factsheet we've chosen to analyse how much has actually been spent so far.

We draw on spend and contracts data from Jan 2016 to March 2019 published by HS2 under statutory transparency obligations and aggregated by Tussell.

This factsheet analyses:

• Total spend by HS2 since 2016

• The amount spent on Phase 1 (London - Birmingham) vs. Phase 2 (Birmingham - Crewe/Leeds)

• The companies most vital to the project

• Contracts that might be at risk if the project is scrapped

Read on or click the button below to access the full report as a pdf.

Tussell Factsheet: HS2 (Oct 2019)

HS2 quarterly spend since 2016

In total HS2 reports spending nearly £3.5bn since 2016. Quarterly spend on the project has increased more than sixfold in three years, from £79m in Q1 2016 to nearly £500m in Q1 2019.

HS2 spending by phase

Despite the project's ambition to 'help bridge the North-South divide', 86 percent of spending so far (that can be attributed to a particular section of the project) has been spent on Phase 1 - the section that runs from London to Birmingham. Only £268m has been directly spent on Phase 2 of the line, that runs north from Birmingham, and that is reportedly most at risk of cancellation.

HS2 contracts since 2016

While reported spend on the project so far is only £3.5bn, Tussell data shows HS2 has awarded contracts worth £7.5bn since 2016.

While a lot of enabling work has been carried out on the project, the bulk of the main works are yet to be contracted. This limits the government's exposure to onerous exit penalties in the event that the project is scrapped.

However, it could still raise the cost of future infrastructure projects by making them look at high risk from political vagaries, which could encourage companies to transfer more of the project risk to the government.

HS2 Top 10 suppliers

Of the 881 private companies involved in HS2's Tier 1 supply chain, 60 percent of spending went to just ten entities.

Eight of these ten suppliers are joint ventures, comprised of 23 of the world's biggest construction and engineering firms. Two companies - Costian and Skanska - are involved in more than one joint venture. Engineering firms Ove Arup and WSP are the only firms appearing in the top 10 independently.

Fun fact: HS2 also spent £11k with Mumsnet in 2017.

HS2 contract expiry

Some of the most valuable contracts, with the longest duration yet to run, are for services and works relating to the Euston/Old Oak Common section of the line. This section is understood to at risk from the review as it is one of the most expensive parts of the route and may not be needed in light of connections that will be provided by Crossrail.

82% of the value of HS2's contracts runs until 2024 or beyond.  There could be material exit penalties if these are cancelled.

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