In October 2024 the then transport secretary commissioned a review of the procurement and delivery of major transport projects, with specific reference to HS2.
The man she turned to was James Stewart, a former chief executive of Infrastructure UK and infrastructure consultant at KPMG.
Stewart鈥檚 report was published by the government on 18th June 2025.
It sets out how the politicians in a hurry to build the world鈥檚 best and fastest railway meant that cost control went out of the window and gold plating ran riot.
There has been much press coverage of the failures of politicians, which the current Labour government has been happy to countenance, since the failings all took place under the previous Conservative administration and there are political points to be scored as well as lessons to be learned.
However, Stewart also has a lot to say about the failings on the construction industry and its supply chain.
Sadly the government does not want to share these lessons 鈥� or at least not yet. An entire chapter in the Stewart report titled Main Works Civils Contracts (MWCC) is redacted, citing commercial confidentiality. 聽
He reveals in the executive summary that the MWCCs are 鈥渁 collective failure鈥�. He writes: 鈥淭hey are a failure of HS2 Ltd and the supply chain, but the responsibility widens to include the assurance and approval bodies as well.鈥�
But what is probably the best, most interesting and most important section of the report we are not allowed to see.
However, what remains is all good stuff too, and what follows are edited extracts from the report.
鈥淚n the late 2000s, the UK set out to deliver a high-speed rail project of a size and scale that had not been done before. The ambition was to build the best and fastest high-speed railway in the world, connecting first London and the North of England and then subsequently Scotland with increased capacity being at the heart of the vision. Unfortunately, the HS2 Programme has failed to deliver on this original vision with the current scope now restricted to building the line from Euston to the West Midlands.
鈥淭here is no single explanation for the failings of the HS2 programme. External disruptors (Brexit, the war in Ukraine, Covid-19 and a high inflationary period) have undoubtedly had an impact, but fundamentally a combination of the government, Department for Transport (DfT) as sponsor and shareholder, HS2 Ltd as the delivery entity, and the private sector supply chain have failed to be able to deliver a project of the original scale and size of HS2.
鈥淎ny project of this size and scale delivered across multiple decades is going to be impacted by politics. When I looked at comparator projects 鈥� Tideway, Sizewell C, even Crossrail 鈥� there was a buffer to the politics, either with external shareholders, regulators or joint sponsors. The HS2 Programme has had no such buffers and has been subject to evolving political aims, which pushed forward on the schedule before there was sufficient design maturity and caused progressive removals of scope. The fundamental tenet of a successful project is the clarity and stability of requirements and scope, and this has rarely been the case for HS2, further impacting schedule, cost and benefits鈥� The pace of political decisions has also caused delays.
鈥淚 have found many examples of key decisions having been driven by schedule rather than cost, i.e. the Phase 1 Hybrid Bill and letting of Stage 2 of the main works civils contracts. I have heard a range of reasons for this but pressure from politicians to maintain momentum, fear of HS2 being cancelled, and the belief that costs will increase as a result of delay have featured strongly鈥�. The delivery of the HS2 programme has been dominated and driven by the desire to build the best.
鈥淢any people argue that there is a culture of 鈥榞old plating鈥� on UK infrastructure projects, i.e. going for iconic designs and state of the art civil engineering solutions. In my view this has been evident on HS2. Steps had to be taken to counteract this culture and behaviour. The top-down vision of building a railway that would be the best and fastest has been a major factor in undermining attempts to introduce a culture of cost control.
鈥淭he HS2 programme is of an unprecedented scale and complexity in the UK. However, the delivery, governance structures and the wider government system in which the project operates have followed a relatively standard approach. It should have been recognised that a different approach was needed. Also, there has been insufficient capability in some key areas particularly in HS2 Ltd but also within DfT. The governance has been over stretched, and the funding mechanisms have broken down due to the sums involved, the cost overruns that have occurred, and wider fiscal pressures. Other sectors, like nuclear and water, have benefitted from a bespoke approach. A bespoke approach for HS2 is still needed and should be introduced.
鈥淐ost overruns on the main works civils contracts (MWCCs) are by far the most significant contributors to the overall cost increases. HS2 Ltd must take the prime responsibility for the performance of the MWCCs. It selected the contractual approach and is responsible for the contract management. However, many other public sector stakeholders were involved, particularly pre-contract award. The contracts were subject to significant assurance, including external experts, prior to contract award of Stages 1 and 2 and went through a protracted scrutiny and approval process involving DfT, HMT and other wider government stakeholders. The supply chain also has to take its share of the responsibility as it has largely failed to deliver under the partnership agreements and contracts it signed up to. Therefore, the MWCCs are a collective failure. They are a failure of HS2 Ltd and the supply chain, but the responsibility widens to include the assurance and approval bodies as well.
There is still considerable uncertainty associated with the completion of the contracts. Getting these contracts into a place where they are performing reliably is essential to successful delivery of Phase 1.
鈥淗S2 Ltd has lacked the capability to deal with the size and complexity of the HS2 programme. This is especially true of the commercial and delivery resources. The 鈥榣ean鈥� client model has proved to be the wrong model and there was a failure to change course when problems arose. There has also been a capability issue with the DfT sponsor team, particularly with commercial and delivery experience and acting as client on major infrastructure projects.鈥�
Got a story? Email news@theconstructionindex.co.uk
