HS2 – what happens when the money starts to run out?

Originally posted on 51M.

Looking back on the latest Public Accounts Committee hearing into HS2 it is reasonable to pose the question – so what have we learned?

Well, the Department for Transport has asked HS2 Ltd to make changes in order to improve confidence in delivering the project to schedule. Any major budget cuts could be focused on phase 2 of the project, connecting the West Midlands and the North, with the priority being to pass legislation this year to enable construction of phase 1 to begin in 2017.

Of course, HS2 might surprise us…it often has, but not in good way.

If such a scenario comes to pass, in the context of rebalancing the economy, this would be the worst possible outcome.

We already know that the city to gain most from HS2 will be London. If phase 2 is to take the brunt of future cuts, achieving any discernible degree of rebalancing of the national economy, in reality, will take decades.

Although both the DfT and HS2 Ltd displayed great confidence at the Committee with regard to their ability to keep within budget, there must be serious doubts as to whether spending on phase 1, will stay on track.

For example, the extraordinarily complex issues relating to accommodating HS2 at Euston may take more of the budget with the knock-on effect impacting further up the line.

Last week the Taxpayers’ Alliance drew attention to the possibility that the regeneration of HS2 stations may add billions more to the project’s overall bill.

In Euston’s case it is already known that the underground services will not be able to cope with the increased passenger numbers generated by HS2 once phase 2 is operational. In 2011 TfL estimated that underground improvements in this respect could cost up to £9bn.

So what will we get after spending £80bn plus of taxpayers’ money? The uncomfortable answer for phase 2 is HS2 lite.