HS2’s Euston terminus still at risk of poor decision-making, MPs tell Treasury

HS2’s planned central London terminus at Euston station is still at risk of poor decision making despite a review of how so-called ‘mega projects’ are governed, the government has been warned.

The Public Accounts Committee (PAC) said the government’s definition of mega projects and the greater level of scrutiny they should be subject to excluded many strategically important projects including the long-delayed plans for Euston.

Ministers have implemented a new approach to decision making and governance on projects valued at over £10bn which brings greater accountability and oversight into the Treasury.

The move is part of a wider package of reforms aiming to increase government scrutiny of the biggest public projects, which include HS2, Sizewell C and the £40bn Dreadnought nuclear submarine programme.

Other changes include the merger of the National Infrastructure Commission (NIC) and the Infrastructure and Projects Authority (IPA) into a new body, the National  Infrastructure and Service Transformation Authority (NISTA), which is embedded within the Treasury.

But the PAC said many strategically important projects which do not meet the definition of ‘mega project’, including Euston station, the Lower Thames Crossing and the Oxford-Cambridge arc’, would be “left under the previous approach to governance and decision-making, which was not working effectively”.

The PAC has asked the Treasury to explain its rationale for the £10bn definition of a mega project and under what circumstances a project’s complexity and importance could justify it being a mega project even where the £10 billion cost threshold is not met.

The committee also warned it is “not yet convinced” that there is a “coherent approach” to making decisions on major projects as part of wider plans for local areas under the Treasury’s “place-based” approach to infrastructure investment.

Responsibility for large and complex projects currently sits within the Treasury despite many of these schemes affecting multiple sectors, increasing the risk of poor decision making, according to the PAC report.

Meanwhile, links between projects connecting them to local goals are being identified by both boards within the Treasury and the government’s infrastructure strategy. 

“We were unconvinced by witnesses’ explanation of how these separate yet overlapping structures would work in practice, raising the prospect of duplication of work and confusion in delivery without the right skills involved in decision-making,” the PAC said.

The committee also raised concerns about a potential lack of accountability for NISTA and the Treasury on decisions it makes on major projects following the absorption of the NIC into central government.

While NISTA has retained the NIC’s advisory panel, composed of non-government industry experts, the PAC said moving the former body’s strategic role into government “could leave an absence of independent scrutiny over the effectiveness of the Treasury and NISTA’s delivery of the infrastructure strategy”.

The Institution of Civil Engineers (ICE) has backed the PAC report’s assessment of the risks around strategic projects lacking the increased oversight granted to the biggest programmes such as HS2.

ICE director of policy and external affairs Sam Gould said: “It’s concerning that such enhanced oversight will only apply to projects expensive enough to be labelled ‘mega’. Improving delivery should be a priority for projects of every shape, size, and cost.”

He added that NISTA should “retain an independent voice so it can proactively and effectively challenge government”.

Construction of HS2’s Euston terminus was paused by Rishi Sunak in 2023 amid spiralling costs, with the Labour government looking at leveraging private finance to restart the scheme.