Autumn statement will see cost of HS2 go up, against a backdrop of cuts.

On Wednesday in the Autumn Statement, against a backdrop of cuts to services across the board, the cost of HS2 is expected to expand. Updated costs of Phase 1 of the project are expected to be submitted as part of the Comprehensive Spending Review. Up until now the official estimate for Phase 1 stands at £21.4bn in 2011 costs, but this is expected to approach the £30bn mark.

It is also expected that the cost of Phase 2, which currently stands at £21.2bn, will rise due to both overspends and the official announcement of a station at Crewe. Whilst the idea of HS2 having a station at Crewe has been trailed for over a year, it has never as yet been officially confirmed, and the cost of such a station has never been incorporated into the overall budget.  However, it has been speculated that the proposed Manchester Airport station could be cut to pay for one at Crewe.

The current overall budget for HS2 stands at £50.1bn when the £7.5bn cost of trains is included. Sources close to Government told the Independent of Sunday last week that the cost is “Likely to be £70bn to £80bn”, over double the £30bn the network was meant to cost when announced in 2010.

Last week it was admitted the cost of Great Western Electrification stands over three times the £874m it was expected to cost in January 2013. With a host of other rail projects going over budget, along with the fact the Department for Transport budget not being ring-fenced, it is now clearer than ever that further increases in the cost of HS2 will lead to cuts elsewhere.

Against a backdrop of rising costs, it is expected that Government will officially announce that a Hybrid Bill, not for all of Phase 2, but just for the section from Handsacre (near Lichfield) to Crewe would be deposited as soon as the Phase 1 bill receives Royal Assent. It is expected that the Government will say that fast-tracking of the Crewe section shows an overall commitment to the HS2 project, but this will surely lead many observers to question whether HS2 would ever get beyond Crewe, due to both rising costs and significant geological difficulties with building other proposed sections of the Phase 2 route.

What is completely unknown at this point is whether any finalised maps of the Phase 2 route, either for just the Handsacre to Crewe section, or the whole the route to Manchester and Leeds will be published, and whether any such maps would include significant route changes. The public consultation on Phase 2 of HS2 concluded in January 2014, and it was stated at the time that the final plans would be published in Autumn last year.

Stop HS2 Campaign Manager Joe Rukin responded:

“HS2 is abysmal value for money, and against a backdrop of further cuts to public services, the increasingly dogmatic support for this white elephant and its’ spiralling costs is completely unfathomable. There are very many people who rely on things which Mr Osborne is willing to cut who will find a ballooning HS2 budget very hard to stomach.”

“With trains not due to run for over another decade, who knows where the cost of this vanity project will end up and what else will have to be cut to pay for it? A responsible chancellor would be asking serious questions about whether HS2 is really worth it, not chucking more money at a boondoggle which would only benefit the richest in society.”

“The proposed fast-tracking of the route to Crewe, coupled with the rising costs, will surely lead many to conclude HS2 would only ever get that far. Far from showing a commitment to the North of England, going ahead with this proposal will punt the links to Manchester, Yorkshire and the East Midlands firmly into the long grass.”

Penny Gaines Chair of Stop HS2 added:

“HS2 is clearly a white elephant.  Transport in the North does need improvement, but it isn’t the links to London which are holding back the economies of the North.  It’s the ability to cross the Pennines, it’s getting into city centres from local towns.  This is where the money needs spending on transport, not on one big showy railway line.”

“The government should make the decision to cancel HS2.  There are far better uses for the money, which will have far better long and short term results.”

On the specifics of the route, she continued:

“The government were originally going to announce the whole of the Phase 2 route to Leeds and Manchester, in Autumn 2014. They were not only widely overoptimistic with their timescales, but they also made huge, incorrect assumptions about the ground conditions in the areas they wanted to railway to pass through, and now they can’t make the pieces fit.”

“The people in charge of Network Rail when the now-delayed electrification programme was being developed are now in charge of HS2.  They made a mess of that, and now they are making a mess of HS2.”

On costs, she concluded:

“Time and again, the government and HS2 Ltd have been overly optimistic about the cost of building HS2.  It’s almost as if they picked a figure for the costs which was just about politically bearable, and then they hope no-one will notice when they increase it.  Meanwhile important parts of the project drop off, with the link to HS1 gone, the link to Heathrow gone, and now the links to Leeds and Manchester may go the same way.”

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