HS2 fast-tracked to put the North first by Sir David Higgins - and to start as soon as possible

Plans to create a high-speed rail link across England should be dramatically accelerated and increased in ambition, the man brought in to sort out the £50bn HS2 project tells the Government today.

In his long-awaited report on the progress of the rail link, Sir David Higgins will tell ministers that their only chance of keeping the costs under control is to be more bold and to get the job done as quickly as possible.

Opponents of HS2 have complained that the initial phase, which will run from London to Birmingham, would bring no benefits to the north of the country.

Sir David’s answer is to make phase one stretch another 43 miles to the old railway town of Crewe, which would become a major transport hub, six years earlier than currently planned.

Speeding up the project will help keep costs under control because it will reduce uncertainty and limit the impact of inflation, he believes.

An Australian who previously ran the Olympic Delivery Authority, Sir David was brought in earlier this year to run HS2 as the escalating costs of the project threatened to become a political issue at the 2015 general election.

The Government is determined to see the project go ahead, but Labour’s shadow Chancellor Ed Balls has warned “there is no blank cheque” for the scheme.

Yesterday, Mr Balls told the BBC’s Andrew Marr Show: “David Cameron and George Osborne, who’d lost a grip on this project, panicked and brought in David Higgins to do a review. I hope he will show he’s got the costs down and got a grip on this project. If he does that, we will support this.”

Sir David also suggests that current plans to expand London’s Euston station, which links the capital and the north west, are not ambitious enough. Last April, a plan to demolish and rebuild Euston was dropped after the estimated cost went up by £500m, and was replaced with a scaled down proposal which the leader of Camden Council, Sarah Hayward, scathingly described as “a shed being bolted on to an existing lean-to”.

Last month, the Chancellor George Osborne hinted at a rethink when he talked of turning Euston into a major development, with a shopping centre. Sir David has backed the Chancellor, though he acknowledged that Euston’s location, close to social housing, makes any planned upgrading “particularly difficult”.

He suggested: “An alternative proposal that the Government could consider is a level deck design, which would enable access from one side of the station to the other, better connecting the station to the local area and the community. It could also create the potential for over-site development, which could combine, housing, retail and commercial development.”

Sir David has effectively ruled out any reduction in the budget for phase one of the project. In his report published in Manchester today he opposes making any cuts in the proposals to reduce noise or environmental damage, and he says it would be “irresponsible to reduce the substantial contingency” included in the London to Birmingham phase.

This contingency has pushed the price of phase one up to £21.4bn with £3bn for the trains, while the cost of the second phase, taking the line in a Y-shape to north west and north east England, is put at £21.2bn with around £4.5bn for the trains.

Phase one, taking the line from London through the Conservative heartlands of the Chilterns to Birmingham, is set to be completed in 2026, while phase two is likely to be finished around 2032/33.

The scheme has provoked fierce opposition from people living along the proposed route, as well as drawing warnings from environmental groups about the potential damage to the countryside and to heritage sites. It has also been suggested that the first phase will aggravate the existing north-south divide by bringing new investment and jobs to the south, when there is urgent need for better rail links in the north, for instance across the Pennines.

Sir David has suggested that instead of ending at Birmingham, phase one should extend to Crewe, which would then provide a link between London, Wales and the north west. His report acknowledges that nearly half of all public expenditure on transport goes to London and the south east, which he said was a reflection of the way well paid jobs are concentrated in London, causing a relentless pressure on commuter traffic in and out of the capital.

He also acknowledged that rail links between northern cities are poor. Fewer than one in 200 of the people who commute into Manchester come from the Leeds area, which is only 40 miles away and is home to 2.2 million people.

The Business Secretary, Vince Cable, yesterday backed calls for the north to feel the benefits of the project sooner. “On every visit I make to the north of England, I have heard businesses and council leaders make a very compelling case for getting to the north more quickly by accelerating parts of the HS2 build,” he told The Observer.

£21.4bn Estimated price of phase one, with £3bn for the trains

£21.2bn Estimated price of phase two, with £4.5bn for the trains

43 miles Extension of phase one, to Crewe, suggested by Sir David Higgins

30% Projected increase in passenger and freight demand over the next decade

45% of total public expenditure on transport in England that was spent in London and the South-East in 2010-11

0.5% of commuters into Manchester come from Leeds, 40 miles away

£500m Increase in estimated cost to rebuild Euston Station, leading to plan being dropped last year