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The first phase of the HS2 high-speed railway between London and Birmingham will be delayed by up to five years, Transport Minister Grant Shapps says.
That section of the line was due to open at the end of 2026, but it could now be between 2028 and 2031 before the first trains run on the route.
HS2’s total cost has also risen from £62bn to between £81bn and £88bn, but Mr Shapps said he was keeping an “open mind” about the project’s future.
The second phase has also been delayed.
The route – from Birmingham to Manchester and Leeds – was due to open in 2032-33, but that has been pushed back to 2035-2040.
Mr Shapps’ statement was based on a report from the chairman of HS2, Allan Cook, which concluded that the new railway could not be delivered within the current budget.
“I want the House to have the full picture. There is no future in obscuring the true costs of a large infrastructure project – as well as the potential benefits,” said Mr Shapps.
Mr Cook said the delay had occurred because the original plans did not account for the effect of building through densely-populated areas with difficult geographical features.
His report comes ahead of a government decision on whether HS2 will go ahead at all.
Last month, the government said it planned to review the costs and benefits of the rail project, with a “go or no-go” decision by the end of the year.
The government has said that construction work will continue while the review is ongoing.
‘Unrealistic’ target
Originally expected to cost £56bn in 2015 prices, Mr Cook said the new cost estimate was adjusted for inflation, and based on today’s prices.
Mr Cook, who started his role in December, had already warned about the overspend while preparing a review of the project’s cost and schedule.
He told the Department for Transport last month that the scheme could not be delivered within its budget.
“The budget and target schedule for the programme have proved unrealistic, while at the same time the benefits have been understated,” Mr Cook said.
Concerns that rising costs and delays could threaten the viability of HS2 are not new. Documents seen by the BBC last month, showed that both the government and HS2 knew the new high speed railway was over budget and probably behind schedule years ago.
In July, Meg Hillier, chairwoman of the Public Accounts Committee, cast doubts on the 2026 opening target, calling it “unrealistic”.
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The outlook for HS2 seems pretty bleak
Analysis by business correspondent Theo Leggett
This statement is likely to provide plenty of fresh ammunition to critics of a hugely controversial project.
Not only is the government admitting it will cost far more than expected to build – again – but it is also likely to take much longer than expected.
The first trains are unlikely to run until 2028 – while Manchester and Leeds won’t benefit from superfast services until at least 2035.
If the government wants to cancel or cut back the scheme, numbers like these give it a fair degree of political cover.
There is some small comfort for supporters of the plan – the suggestion that the benefits of the new railway have been “substantially undervalued”. But these haven’t been set out in firm figures.
The cross-party review commissioned by the government in August is due to report later this year, and might provide broader answers. But at the moment, the outlook for HS2 seems pretty bleak.
What has the reaction been?
Andy McDonald, Labour’s shadow transport secretary, said the government had “misled both Parliament and the public about the cost of HS2”.
“People need to have confidence in the project, so this delay is bad news for the UK transport system as a whole and the north of England in particular.”
Sir John Peace, chairman of Midlands Connect and Midlands Engine, said it continued to support HS2, saying the extra rail capacity was “desperately” needed.
“I wholly believe that HS2 is a once-in-a-lifetime opportunity to rebalance the UK economy and build a transport network fit for the future.”
Mike Spicer, director of policy at the British Chambers of Commerce, said: “Business communities up and down the country will be disappointed at the prospect of having to wait longer to see the benefits of this vital project.
“Yet we remain confident the long-term benefits will be felt for generations, and will far outweigh the upfront costs.”
What is HS2?
HS2 is a new railway line which, once completed, would run from London to the West Midlands, Manchester and Leeds.
Trains on the London to Birmingham route would be 400m-long (1,300ft) with up to 1,100 seats and would be capable of reaching speeds of up to 250mph. They would run as many as 14 times per hour in each direction.
The Department for Transport says the project will cut Birmingham to London journey times from one hour 21 minutes to 52 minutes.
Once the second phase is complete, Manchester to London journeys would take one hour seven minutes (down from two hours seven minutes), and Birmingham to Leeds 49 minutes (down from two hours).
This would effectively reduce journey times between London and Edinburgh and Glasgow by an hour to three-and-a-half hours.
The government hopes its creation will free up capacity on overcrowded commuter routes.
