Critical report casts doubt on HS2

Latest News Tue, Mar 22, 2016 5:16 PM

Critical report casts doubt on HS2

The benefits of the HS2 high speed rail project on the economy are unclear, the National Audit Office (NAO) has warned.

The NAO said in a report that it had "reservations" about how the London-to-Birmingham link would deliver growth, adding that the project had an estimated £3.3bn funding gap.

But Transport Secretary Patrick McLoughlin said the NAO's conclusions were based on old data.

The NAO said it had "reservations about the business case" and said the timetable for the planning phase of the project - with work due to start in 2016-17 - was "challenging".

The report said: "In particular, in presenting its case for investment in the project, the Department of Transport (DfT) has poorly articulated the strategic need for a transformation in rail capacity and how High Speed 2 will help generate regional economic growth."

The department's methodology for appraising the project puts a high emphasis on journey-time savings, from faster and more reliable journeys, but the relationship between these savings and the strategic reasons for doing the project, such as rebalancing regional economies, is unclear, it also claimed.

The NAO also estimates a £3.3bn funding gap for the controversial project which "the government has yet to decide how to fill".

A new estimate based on a clearer route and more information was likely to be higher than an earlier cost estimate of £15.4bn-£17.3bn, it said.

Commenting on the report, House of Commons Public Accounts Committee chairwoman Margaret Hodge said: "The DfT has produced a business case that is clearly not up to scratch. Some of their (the DfT's) assumptions are just ludicrous.

"There is virtually no evidence in this business case to support claims that HS2 will deliver regional economic growth, one of the key aims and justifications for this project.

"We have been told that it will deliver around 100,000 new jobs but there is no evidence that all these jobs would not have been created anyway. The department has also set an extremely ambitious timetable for the project, with no room for mistakes. Past experience does not fill us with confidence in this optimism," she said.
'Strong and prosperous'

But Transport Secretary Patrick McLoughlin does not accept the NAO's core conclusion as it relies too much on "out of date" analysis and fails to acknowledge the progress made since 2012.

"The case for HS2 is clear. Without it the key rail routes connecting London, the Midlands and the North will be overwhelmed," he said. "We are not building HS2 simply because the computer says 'yes'. We are building it because it is the right thing to do to make Britain a stronger and more prosperous place."

HS2, which runs through Tory heartlands, has faced bitter opposition. But last week new legislation paving the way for development of the HS2 was announced in the Queen's Speech.

The High Speed Rail (Preparation) Bill would allow expenditure on construction and design on the HS2 project "quicker than otherwise possible". It aims to provide the Parliamentary authority for ecological surveys and other preparatory work to take place and to pay compensation to property owners along the route.

It is hoped the first trains will run on the HS2 line around 2026 and the Department for Transport says phase one will cut London to Birmingham travel to 49 minutes, from the current one hour and 24 minutes.

The HS2 phase two would virtually halve journey times between Birmingham and Manchester - to 41 minutes - and between London and Manchester from two hours and eight minutes to one hour and eight minutes.

Speeds of up to 250mph on HS2 would reduce a Birmingham to Leeds journey from two hours to 57 minutes.

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