Northern Powerhouse Rail is at risk of repeating the catastrophic failures of HS2, with MPs warning that the government has no convincing plan to deliver the project within its £45bn budget. The influential Public Accounts Committee (PAC) has issued a stark assessment, stating it is not confident the Department for Transport (DfT) has learned the lessons of past mismanagement of major rail projects.
The government announced its commitment and funding for Northern Powerhouse Rail (NPR) in January, setting out a vision to connect Liverpool, Manchester, Leeds, York and Sheffield with new or upgraded lines. But the scheme remains shrouded in considerable uncertainty more than 12 years after high-level plans were first unveiled in 2014. The PAC report highlighted unresolved questions over journey times, capacity, exact routes and who will build the new lines, describing the project as being at an early stage despite decades of political pledges.
The £45bn question
The committee reserved its most pointed criticism for the way the budget was set. It said it was “unclear how HM Treasury determined the £45bn cap before the entire project is designed, scoped and costed”. Clive Betts, deputy chair of the PAC, said it is “hard to see how the government was able to arrive at a hard £45bn cap” and likened the approach to “putting a roof on a house before the foundations are even laid”. The report identified a “clear risk” that the full programme and its intended benefits cannot be delivered within that funding limit. To date, only £1.1bn has been allocated for planning and development work during the current Spending Review period up to 2029.
The uncertainty around the budget is heightened by the involvement of HS2 Ltd, which has been tasked with producing cost estimates for parts of the NPR programme. The committee noted that HS2 Ltd has a poor record on cost estimation, warning that the final phase of NPR – a new Liverpool-Manchester line – would be at risk if the DfT cannot scope the programme within the cap or if the estimates prove unrealistic. The PAC said this danger is “heightened by HS2 Ltd’s responsibility for producing some of the cost estimates and the department’s poor record on rail infrastructure costs and cost estimation”.
One of the most significant unresolved questions is whether a new station at Manchester Piccadilly will be built underground, as Mayor Andy Burnham has long demanded. Some estimates suggest an underground option could cost £5bn more than a surface station. Manchester City Council is committing £1m to bolster the case for an underground station, citing its potential as a catalyst for regeneration. The decision carries major financial implications for the already strained budget.
The cancellation of HS2 Phase 2 – the northern leg – has already reshaped NPR’s finances. The estimated cost of building the section into Manchester that NPR had planned to use was transferred to the NPR programme, adding £13.4bn to its projected cost, bringing it to £30.6bn in 2019 prices. The same cancellation also weakened the business case for a tunnel between Manchester city centre and Manchester Airport, a project that was expected to be shared with HS2.
The PAC drew explicit parallels between the early governance of NPR and the now-infamous failings of HS2. The committee said it had heard “troubling echoes of the same mistakes in loose governance that HS2 made early on”. Betts added: “As HS2 has been a casebook example of how not to run a major project, so their involvement in NPR does not fill us with confidence.” The James Stewart Review, commissioned in October 2024, catalogued a “litany of failure” at HS2, including mishandling, lack of ministerial oversight, inadequate control by HS2 Ltd, and ineffective supply chain incentives. The estimated cost of HS2 has ballooned to between £87.7bn and £102.7bn in 2025 prices, with services potentially delayed until 2039. The cancellation of HS2 Phase 2 alone is estimated to cost between £33bn and £58bn in cancellation and remediation costs while delivering no benefits.
The MPs also raised concerns about regional disparities. They warned that financial constraints could force difficult choices, potentially leaving less affluent areas behind if they cannot self-fund or attract private investment. The committee urged the DfT to improve transparency and provide regular updates to Parliament, and pressed for clarity on how mayoral authorities will exercise sufficient scrutiny over the project to ensure successful delivery.
Henri Murison, chief executive of the Northern Powerhouse Partnership, said the government had set out high-level scope and timings but “we now need clarity on key issues”. He said Burnham’s proposed “No 10 North” office would play an essential role in directing officials, and added: “The Treasury must also ensure the necessary fiscal devolution is in place to allow funding to be raised for Manchester Piccadilly underground station and other key elements of the programme. We expect to see serious progress in the autumn budget.”
A Department for Transport spokesperson said: “Northern Powerhouse Rail will deliver the biggest investment in rail connectivity in a generation, giving the north the transport links it deserves and driving growth, jobs and investment across the region. NPR will not repeat the mistakes of HS2 which is why we accepted all the recommendations of the James Stewart Review and are taking a disciplined, phased approach – completing detailed technical work with all stakeholders before fixing precise choices for major infrastructure.”
