A National Audit Office report said the Department for Transport and HS2 Ltd are making progress on the overhaul.

But the watchdog warned major risks remain around commercial deals, cost control, delivery skills and the unresolved London terminus.

DfT now estimates HS2 will cost between £88bn and £103bn to complete — around double the 2020 Phase One estimate.

The NAO said HS2 Ltd’s first attempt to renegotiate supply chain contracts last year failed after the client found itself in a weak position with contractors.

It said HS2 Ltd did not understand supply chain work well enough, had not managed contracts properly and lacked a reliable total cost estimate to support negotiations.

Contractors were also not attracted by HS2 Ltd’s proposed approach to transferring more risk onto them.

It has now changed tack with deals designed to incentivise cost-effective delivery.

HS2’s work to settle historic costs with contractors has identified a staggering £500m of disallowable costs, according to the NAO report.

But talks are running six months late and are now due to complete by autumn 2026.

The wider commercial reset aims to save around £2bn by avoiding delay-related costs, but the NAO warned stronger fallback plans are still needed if talks fail.

Euston is the other major pressure point.

DfT is managing the London terminus as a separate programme covering the HS2 station, existing station redevelopment, local transport upgrades, and commercial and housing development.

Euston Delivery Company Limited was set up in April 2026 to act as the “single directing mind” after earlier criticism of weak governance.

But it is not yet fully operational and still needs a permanent chief executive officer.

DfT has agreed a high-level plan for the site, but the NAO warned scope and cost estimates are less mature than other parts of HS2.

Euston works need a further £4.1bn of public funding on top of £3.8bn already spent.