Subcontractors will lay off staff due to HS2 delays, says Mace CEO

Subcontractors working on the HS2 Euston station will be forced to make redundancies after the government decided to delay its construction, according to Mace chief executive Mark Reynolds.

Mace and Spanish engineering giant Dragados were appointed as construction partners for HS2’s only central London station in 2019. The joint venture has procured subcontractors for up to £500m of packages, while preliminary work started on site earlier this year.

However, earlier this month the government announced it would delay the construction of HS2 Euston station so it coincides with phase 2b of the mega-project – meaning the station will not open until at least 2032.

The government said the delays were to save money amid “significant inflationary pressure” – although HS2 minister Huw Merriman admitted on Friday (17 March) that the government was “continuing to work through the implications of the [new] funding settlement”.

Speaking on Radio 5 Live’s Wake Up to Money programme on Thursday (16 March), Reynolds hinted that Mace would not have to make job losses as a result of the delay – but added that smaller businesses working on HS2 Euston will.

“Fortunately for us as a business, we have the resilience – as a large organisation employing over 7,500 people – to move people onto other projects either in the UK or internationally,” he said.

“But there are smaller organisations which don’t have that resilience. [The government delay] is not helping the smaller organisations. The construction sector is made up of many, many small organisations – SMEs – which really do need consistency and pipeline of work.

“The reality is that some of our supply chains are going to have to lay off people, and that’s not good for the industry, particularly when we have a gap in skills. There is a short-term need […for] certainty and stability which gives employers – large and small – confidence to invest.”

Grimshaw, the architect behind HS2 Euston station, which is employed directly by HS2, has already confirmed it will make redundancies due to the newly announced delays, according to Construction News sister publication Architects’ Journal.

Reynolds, who is co-chair of the Construction Leadership Council alongside construction minister Nusrat Ghani, added that there were “things he can and can’t say” about the HS2 Euston delays due to Mace’s work on the project.

However, he did add that the project needed to deliver value for money and therefore “taking a step back and making sure it’s the right scheme for all of us going forward is very important”.

The HS2 Euston station delay will mean that passengers travelling to London after HS2 opens will have to alight at Old Oak Common in west London. It also means the planned multistorey mixed-use development over HS2 Euston station – which is being led by Lendlease – will also be delayed.

Separately, in an opinion piece published by CN, Mace chief of staff Hannah Vickers has warned that chancellor Jeremy Hunt’s Budget “risks tipping construction into recession” due to uncertainty around the future pipeline of construction and infrastructure.