HS2 underspends 2016/17 budget by £237m

High Speed 2’s (HS2) expenditure from April 1 2016 to March 31 2017 was £237m less than its budgeted figure of £770.1m, according to the latest High Speed Rail (Preparation) Act 2013 Expenditure report.

Total HS2 Ltd expenditure was £345.5m, against an annual budget of £376.1m, representing an underspend of 8%, while Department for Transport (DfT) spend on land and property acquisitions reached £191.5m, compared with a budget of £394m. This latter underspend was primarily due to a delay in completing the acquisition of largescale commercial properties ahead of Royal Assent.

The report says HS2 Ltd’s underspend was “principally driven” by Royal Assent being awarded in February and the budget running until March. Money spent on design activity (£28.8m) was £9.5m lower than the £38.3m budgeted, due to delays in commencing the Railway Systems reference design. There were also delays in the development of HS2 Ltd’s railway operations, rolling stock and depots, as well as in its operator and commercial strategies.

The amount spent on surveys and ground investigations was £48m, against an annual budget of £56.6m. This was credited to HS2 Ltd being able to agree a lower number of access agreements than required to conduct the planned environmental surveys. The remaining surveys were scheduled to be completed in financial year 2017/18.

Enabling works were much closer to the budgeted figure, with £83.6m being spent, just £300,000 less than the anticipated outlay. Project management fees were £58.9m, against an annual budget of £63.9m. This was blamed on the cost being reported to February as a result of Royal Assent, whereas the annual budget ran to March.

Corporate support – which includes the areas of information technology, communications, human resources support and other aspects – cost £126.3m, against a budget of £128.9m. This underspend was credited to delays in the appointment of a delivery partner to support learning and development, as well as lowerthan-anticipated IT upgrades and delays to undertaking further work on benefits management. The report says this was “compounded” by the Phase 1 cost being reported to February, and the budget to March.