HS2 should still go ahead despite costs potentially ballooning to over £88bn, according to a leaked report of the Oakervee review in The Times.
The future of HS2 had been called into serious doubt earlier this summer, when the government announced an independent review into whether and how to proceed with the multi-billion pound project.
Now, the leaked review reportedly recommends that any incoming government commits to the full project, but notes that the new cost estimate of £88bn - compared to an initial budget of £56bn in 2015 - is likely to rise even further again.
The review, by former HS2 chairman Douglas Oakervee, also reportedly claims that the procurement strategy for the first phase of HS2 has been a failure, with prices being significantly inflated, and that HS2 should “consider re-procuring” contracts for most phase one projects to ensure they are on “acceptable commercial terms” to secure best value.
It also claims that escalating costs mean the benefit to taxpayers has fallen from £2.30 for every £1 spent in 2017 to between £1.30 and £1.50 for every £1 spent this year.
There had also been speculation that the review would recommend scrapping the eastern leg covering the east Midlands, Sheffield and Leeds because of spiralling costs.
However, in a major boost for the north, the review reportedly recommends building the full Y-shaped line, which would create two lines north of Birmingham: one to Manchester and the other to Leeds. They would then join the west and east coast main lines.
Henri Murison, director of the Northern Powerhouse Partnership, welcomed the leaked report and said: “The Northern Powerhouse independent review on HS2 said that there were no identified credible alternatives to HS2 in order to deliver the same capacity, and that it has the potential to unlock greater growth in north and midlands. It is welcome that their recommendations are mirrored by the government’s own Oakervee review.
“As we await the three major party manifestos, the case has been made for building Northern Powerhouse Rail and HS2 together all the way has never been stronger. Now Oakervee recommendations are being debated in public, the time for being equivocal on this issue has run out. Conservative, Labour and Liberal Democrat candidates in the north are committing to back the Connecting Britain campaign of business and civic leaders. All their leaders must unequivocally do the same.”
The review had been due to publish its findings last month, but was delayed until early next year until after the upcoming general election, and opponents of HS2 have described the review as a whitewash.
Lord Berkeley, deputy chair of the review panel and previously a vocal critic of HS2, claimed he was given no opportunity to influence the final report, and is reportedly preparing a dissenting report for the attention of any newly elected prime minister.