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The Financial Times reports that there is ‘entrenched and escalating concern’ within the Treasury and officials are privately warning that the cost of the controversial High Speed 2 rail line will hit £73bn.

The official projected cost is £42.6bn, but senior Treasury officials are including the effects of inflation and VAT over the project’s lifespan to arrive at this figure.

The FT adds that there is a widely held view in the Treasury’s senior echelons that the scheme whose proposed budget recently rose by £8bn will drain investment from other projects.

However John McDermott’s message, in the same paper, is that “Treasury mandarins risk being accused of conducting their own dodgy analysis”.

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Transferred from 21.8.13 posting.