Five ‘core risks’ to HS2 schedule and budget - International Burch University
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Five ‘core risks’ to HS2 schedule and budget

Five ‘core risks’ to High Speed 2’s (HS2) schedule and budget have been identified within the project promoter’s Corporate Governance Report, released as part of HS2 Ltd’s annual accounts.

Risks include skills shortages, staff turnover and protester activities.

Despite the identified risks, HS2 Ltd’s annual accounts conclude that phase one of the project between London and Birmingham remains on track to be completed within it opening window between 2029 and 2033 and inside its funding envelope up to £44.6bn (2019 prices).

Core risks

(all information is taken from HS2 Ltd’s Corporate Governance Report)

1. Protests

HS2 is a high profile scheme and is the target for protest and obstructive activity affecting construction sites and also vacant possessions. In addition, public hostility at certain locations is high along with reduced or insufficient security arrangements. There is a risk that HS2 works are disrupted by unlawful protest, affecting schedule, cost and reputation.

Mitigations:

  • Proactive environmental media campaign, and liaison with local stakeholders e.g. local authorities and landowners, are ongoing
  • Monitoring of protester activity and security threats, and mitigations (additional fencing, anti-tunnelling mitigations, patrols and drone surveillance, etc.) increased according to risk, e.g. where there is potential that time-critical works could be delayed
  • Closely coordinated working between HS2 Ltd Phase One and contractor security teams being undertaken
  • Incident management plans and teams, and briefings on managing protester situations
  • Options for legal action where appropriate are being considered
  • Enhanced training for and engagement with communities being undertaken
  • Process and measures for success, and post-incident review and lessons learned captured by Phase One and communicated to corporate HSSE team for wider adoption by Phase One contractors
  • Planning for potential for re-sequencing of works, etc. in the event of an incident occurring
  • Impact assessment being undertaken to forecast and understand direct cost and also schedule implications

2. Supply chain capacity

The UK supply chain’s total capacity for the delivery of Infrastructure projects, including capacity, solvency, skills and other resource shortfalls may prevent HS2 Ltd from achieving its strategic goals and benefits. This may also impact on HS2 Ltd’s ability to meet schedule timelines or result in increased cost pressures not anticipated.

Mitigations:

A HS2 Supplier Relief Working Group has been established (led by the Procurement Operations Director) in response to a Cabinet Office Procurement Policy Note, ‘Supplier relief due to Covid-19’. The group interprets Government policy, liaises with DfT, Network Rail and Highways England on approach and oversees supply chain monitoring, including representation from HS2 Ltd Policy and Process, Corporate Contract Management, Construction, Phase 2, Client Services, Supply Chain and Finance teams. The emergence of Covid-19, and its potential economic impact, represents a new challenge facing HS2 Ltd.

We have increased focus on supply chain financials and capacity. The Procurement and supply chain team undertake regular assessments of the status of key suppliers and where necessary prepare contingency plans in the event of supply chain distress.

Our Skills, Employment and Education Strategy (SEES) focuses on securing the skills and labour to build the railway, adding to capacity in the UK and creating a legacy of a highly skilled and diverse workforce.

3. Likelihood of ‘catastrophic incident’

The scale and complexity of HS2’s programme increases the risk of a serious or catastrophic incident occurring on the programme resulting in significant harm, delay to the programme and loss of confidence in HS2’s ability to deliver the Programme safely.

Mitigations:

Our Safe at Heart campaign remains a key enabler, and we will continue to engage with the supply chain to promote a culture which prioritises health, safety, security and environmental management.

Safe at Heart’s strategic goals, objectives and strategic principles underpin our approach to Health, Safety and Wellbeing. HS2 continues engagement with SHWeLT and the supply chain on catastrophic risks, to develop a consistent approach to the identification and management of MWCCs’ catastrophic risks.

Peer review assurance is undertaken. HS2 Ltd carefully oversees integrated geographic works and also at periodic intervals undertakes a forward look of potential high risk events.

4. Losing talent in leadership teams

A competitive marketplace means that talent becomes scarce and more expensive. HS2 Ltd may be unable to build, develop and maintain the requisite organisational leadership, talent, capability and culture required to deliver our objectives because of inability to attract and retain the right skills and capabilities

Mitigations:

HS2 Ltd approved a People Strategy – Skilled for Success – in April 2018. This defined how capacity and capability would be built for HS2 Ltd over time linked to Key Transition states during the programme lifecycle (defined by a Capability Roadmap).

This ensures both delivery of the railway, and the expected legacy beyond the railway. The implementation of this strategy was accelerated through the Enterprise Capability Programme and at the year end the maturity of the organisation was assessed (via three levels of assurance) with 13 out of the 14 identified capabilities met.

The HS2 Leadership Framework has now been established and embedded in recruitment processes and development programmes. This also includes the launch of the Leadership and Management discovery programmes.

5. External/ political events  

External political or other unexpected external events, legal standard changes and supply chain events outside of HS2 Ltd’s control may change significantly, which could impact on the current or future scope of the HS2 programme and hinder achieving the programme’s objectives.

Mitigations:

HS2 Ltd, like the rest of the construction sector, continues to monitor the implications of external events including the impact of Covid-19, BREXIT and its impact on supply chain.

The Board and Management regularly consider other potential or emerging risks. A regular engagement programme is in place with the HS2 Minister via the HS2 Ltd Chair, CEO, DfT and HS2 sponsorships teams.

Global monitoring of international, national and regional media; brainstorming with Board members at regular frequencies. Quarterly review of national and line of route stakeholder emerging themes, and analysis of complaints and queries.

Source https://www.newcivilengineer.com/latest/five-core-risks-to-hs2-schedule-and-budget-21-07-2021/

Department of Civil Engineering https://www.ibu.edu.ba/department-of-civil-engineering/