A scathing new report published today into HS2 says it is over budget and running late because the Government underestimated the project's complexity and risk.
It adds that significant challenges to completing the programme and delivering value for taxpayers and passengers remain.
The new report, called 'High Speed Two: A progress update', has been published by parliamentary spending watchdog the National Audit Office (NAO) although many of its findings were revealed last year by HS2.
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It comes just days after the results of the review into the project by its former chairman Douglas Oakervee were leaked to the media ahead of its official publication in the coming weeks.
According to the leak, the project should continue but certain elements would be looked at again.
Phase one of HS2 is due to run between Birmingham and London and be open by 2031 while a second phase, between Birmingham and the North West, East Midlands and Yorkshire will complete by 2040.
Both of those completion dates are revised from initial projections after it was confirmed last summer that phase one would open up to five years later than planned and phase two seven years later.
The NAO's new report says the Department for Transport's (DfT) latest estimate of the cost of HS2 is between £65 billion and £88 billion based on 2015 prices, between 17 per cent and 58 per cent over available funding, with the NAO warning that "costs are uncertain and could change".
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Phase One
It described 2026, the initial target opening date of phase one, as "ambitious and set by comparison with other infrastructure programmes", with the DfT not sufficiently considering that HS2 was a much larger and more challenging project.
The report added: "In 2013, the NAO reported it would be difficult for HS2 to complete all work in the time available.
"Although it was clear from 2016 that the 2026 opening date was in doubt, DfT did not reset it.
"Since April 2019, HS2 has been planning on the basis of a more realistic schedule for the programme."
Work on construction of phase one must start by this March in order to avoid further delays to the start of passenger services.
The DfT set the available funding for phase one in 2015 since when forecasted costs have increased on all parts, except the purchase of new trains.
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The department and HS2 Ltd, the company set up to deliver the new rail line, now estimate the phase will cost between £31 billion and £40 billion, £3.9 billion to £12.9 billion more than its available funding.
The NAO criticised HS2 Ltd for not accounting for the level of uncertainty and risk when estimating costs in April 2017 and using a calculation method for contingency that was not appropriate for a programme at such an early stage of development.
The £7 billion of contingency was not enough to address the significant cost increases that had emerged, the NAO said.
"By not fully and openly recognising the programme's risks from the outset, DfT and HS2 Ltd have not adequately managed risks to taxpayer money," the NAO added.
"HS2 Ltd has undertaken a significant and unforeseen amount of work to agree a new cost and schedule for phase one.
"It considers the additional time taken has helped to protect the scheme's overall value for money by giving it more time for scrutiny and applying lessons learned."
Phase Two
The initial planned opening date of the whole of phase two was 2033.
Current forecasts suggest phase 2a (Birmingham to Crewe) will be ready between 2030 and 2031 and phase 2b (Crewe to Manchester and Birmingham to the East Midlands and Yorkshire) will be between 2036 and 2040.
The NAO said that, despite being at a much earlier stage than phase one, this element of HS2 was already forecast to cost more than its available funding.
The DfT estimates that costs for phase 2a could be £6.5 billion (87 per cent higher than available funding) and phase 2b is £41 billion (63 per cent higher than the available funding).
The NAO said it was making a series of recommendations covering the robustness of cost and schedule estimates, the capabilities needed to manage a programme of this scale and the oversight arrangements required for the remaining phases.
Head of the NAO Gareth Davies said: "There are important lessons to be learned from HS2, not only for the DfT and HS2 Ltd, but other major infrastructure programmes.
"To ensure public trust, they must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway that remain."
HS2 News
A statement from HS2 said: "The vast majority of the findings were revealed in HS2 Ltd's 2019 stocktake - a year's worth of deep dive investigation into the underlying costs and timescale of the project.
"After being appointed HS2 Ltd chief executive in 2017, Mark Thurston identified the serious challenges of complexity and risk in the project and he made several significant changes and improvements to the organisation, its governance and processes.
"As the NAO recognises, this work - along with a greater understanding of the ground conditions and build requirements - means Ministers have robust cost estimates for phase one.
"If the Government decides to proceed, HS2 Ltd has a highly skilled team in place ready to build Britain's new state-of-the-art, low-carbon railway."