The £33 billion spending decision

When the government proposes to spend more then £33 billion of taxpayer’s money on a single project, such as HS2, that project needs to be examined very carefully.

There are a great many ways of spending £33 billion. So it is vital, before making a commitment to a project that will take decades to complete, that it is assessed against other ways of spending taxpayer’s money.

For instance, it should be compared to other transport projects which could be put in place with £33 billion. That scale of spending could be used for numerous local transport projects, which overall will benefit millions of people in many different areas of the country. (After all, only one witness at last year’s Transport Select Committee inquiry on Transport and the Economy told them that HS2 was a top priority.)

However, £33 billion doesn’t need to be spent on transport. For instance, one way of supporting businesses would be to put in ultra high speed broadband, enabling people across the entire country to grow their businesses and create local jobs. This will cost less overall, and will start benefiting people long before the new railway could be operational.

Or it could be spent on a huge number of smaller projects: if each constituency in the country was given an equal share of that £33 billion, they would have £51 million to spend locally, on the things that benefit local people and local businesses. The priority for the area might be new schools, job creation schemes, improved hospitals or something local to the area.

However Philip Hammond has persistently sidestepped the arguments against HS2. He refuses to address the arguments against the project, criticising instead the people making them.

This shows just how weak his arguments on HS2 really are. If the case for HS2 was as strong as people like Philip Hammond wishes it was, he would focus on the rational arguments. But the case for it is too weak and the case against HS2 too strong.

PS Philip Hammond wrote to MPs saying the route from London to Manchester and Leeds will cost £33 billion.

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36 comments to “The £33 billion spending decision”
  1. If Chiltern Rail gave out a statement that they were to receive a government grant £100 million to update their railway carriages to new state of the art vehicles, would there be any point in seeking volunteers to visit Aylesbury Station to try to persuade the travellers that they didn’t need it? Of course not.
    Then one has to ask why are volunteers being marshalled to go to Birmingham and Manchester?
    Further, this site was set up for the sole purpose of nurturing discussion on how to prevent the £33 billion expenditure on HS2. No other reason. Why is it then that our objectives are being shunted into sidings and the website filled with blogs about Broadband, Maglev, EU comparison costings, etc etc. They are all an irrelevance to achieving our aim.
    It is with regret that I have to say this campaign is very quickly slipping out of our control due to lack of leadership and moderation of the blogs on here to ensure that they be pertinent to the Cause.
    Only 6 weeks left and not even half the required petitioners.
    The only issue for this site is how we are going to get 100,000 signatures in the very near future.
    Time for a change in track? Because I am concerned that many of those who were committed to trying to prevent this gross, obscene even, expenditure at this point in our Country’s financial predicament are fast coming to the conclusion it is a lost cause, and not because of the efforts put in by individuals such as themselves.

    • John it is very easy to be critical, but if you are critical you can’t have it both ways. You knock people for not demonstrating and then you imply it’s a waste of time. I haven’t seen you at any of the many places I’ve been, handing out fliers, getting signatures for the petition etc.

      I’m sure people who visit this site who are anti have already signed the petition and 38 degrees and sent them on to others.

      If you only want one sided comments you can always set up your own one sided blog site. It’s what the opposition have done. Most people blog on here because they are prepared and like open debate.

      I am quite happy to question my opinion and have it questioned. You can learn a lot from listening to other points of view.
      There are many ways we are fighting the battle and there are many aspects to the debate which people are not necessarily familiar with, are investigating and having to learn about. It is very time consuming. Broadband and costings are very relevant in this day and age, particularly in the present economic climate.

      Most of us are going into territory we are totally unfamiliar with and well out of comfort zones. Positive encouragement is far more productive, carrots and sticks.

      I think most of us wish we could do more, but most are doing as much as they can. I’m sure positive suggestions would be welcomed

      • Couldn’t have put it better myself eros. I believe that stop hs2ers are travelling to London tomorrow … I wonder if JW is attending the protest? As the pro hs2ers will also be there, he would have plenty of scope for conversion ……..

          • Westminster was the word I got – but I can’t be more specifice I’m afraid. There’s bound to be someone here who can tell you more … Penny, have you heard anything? To my great regret this is one that I have to miss.

            • What a farce this is turning into?
              “Westminster was the word I got – but I can’t be more specifice I’m afraid. There’s bound to be someone here who can tell you more … Penny, have you heard anything?”
              Penny is the media director for God sake. Is there anything scheduled for tomorrow that you haven’t informed us about Penny?
              Anyone following the Gary saga about his house?
              What’s he doing on here Penny

            • Dave, I’ve lifted this from eros posting .. join us at Westminster tomorrow about 10.30-11.30am, with petition.

              No farce really, just that I didn’t know the timings or details for certain.

      • Sorry eros I’m just very concerned.
        We have to wake up and face the unpalatable fact that the campaign so far is an abysmal failure. 43,000 signatures in 15 months or 60 weeks and we have to find another 57,000 in 6 weeks.
        How do you suggest we do it?
        Do the majority of topics allowed to be brought up on here unmoderated have any relevance to helping us achieve our objective?
        Is there any guidance from our organisers?
        Is a visit to Brum the best they can come up with at this late stage?

        • Buy a t shirt, get a car sticker. Go to the ELF workshop at Coventry. Write letters to papers national local etc, join us at Westminster tomorrow about 10.30-11.30am, with petition. Get friends and relatives to write (especially if they live away from the line) to papers and particularly to answer the consultation. Go to the extended HS2 roadshows. We can only be in one place at any one time.

  2. ‘our jobs are more important than their lawns’

    obviously its a nonsense, we talking about ancient forests and ancient farmland ,that does matter to the heritage of this country and ultra highspeed rail shows no respect for these things, it would sacricfice them on the altar of ‘trains for toffs’ (well if you lot are going to use unhelpful rhetoric so am I). thats why i support the right lines charter – signed up to by friends of the earth, green peace, and many other organisations that care for and respect the things that ourght to be cared for and respected. IF it is advantageous to have more capacity and speed it needs to be done in the RIGHT way and 250mph is not right for THIS country. there are alternatives. Lets RESPECT each other, Lets have TRAINS which respect the environment. Its all about respect at the end of the day. Lets have campaigns based on respect.

  3. A PARADOX
    The ANTI HS2 group is to visit Brum and Manchester to try and persuade the locals they don’t want a new £33billion comfortable uncrowded super fast train and dedicated track to speed them none stop to London. Courageous volunteers are to ask them to sign our petition.
    Yet the group won’t go to London which is closer, and ask the commuters if they need another 40,000 rail users an hour (from Brum alone) descending upon their already overcrowded subways and overburdened tube trains. Many of them will have had to stand on their journey getting into the Capital and even more on their way home because of lack of investment in rolling stock on existing lines.
    What a disappointment we won’t be able to explain that the train bringing the influx of new commuters into the capital is a super fast Eurostar type on a dedicated new line with no stops and comfortable relaxing facilities.
    And what a tragedy at not being able to warn them the cost is over £100,000,000 a mile or £33 billion that they will have to fund out of their income and taxes and, if recent history is anything to go by, further increases in fares.
    By the by, I see no mention in the National Federation of Women’s Institutes (200,000 members) AGM in Liverpool a couple of weeks ago. No leaflets handed out explaining that it will cost every working family in the land over £1,000 just so Birmingham citizens can to London a little quicker. No signatures there then to swell our petition above the half way mark with only a few weeks to go. Nothing at the GMB Union (700,000 members) Conference a few weeks ago either.
    How exciting it would have been to see, in Manchester of all places, delegates reaction at being given pamphlets explaining the cost of HS2 to their wage packet at the UNISON (1,300,000 members) National Conference next week.
    Does one really have to ponder which areas should be visited to get our petition over the 100,000 mark?

    • John Williams –
      “Yet the group won’t go to London which is closer, and ask the commuters if they need another 40,000 rail users an hour (from Brum alone) descending upon their already overcrowded subways and overburdened tube trains. Many of them will have had to stand on their journey getting into the Capital and even more on their way home because of lack of investment in rolling stock on existing lines.”

      sorry to point out the obvious but you are more than welcome to gather a grop together yourself and go to London to do just as you suggest. Your ideas are great – why don’t you put them into action? Noone at Stop HS2 has been “elected” and it isn’t their “job” as such – they just have volunteered to do the best they can. They don’t get any money for giving up their time. Neither do those on all the 70 action groups along the route.

      So you have every right to get up and do something yourself. What do you think then? Whats stopping you? let me see your action plan!!

  4. For instance, one way of supporting businesses would be to put in ultra high speed broadband, enabling people across the entire country to grow their businesses and create local jobs. This will cost less overall, and will start benefiting people long before the new railway could be operational.

    I’ve asked this before the last time this genius alternative was put forward, but I’ll give it another go anyway. Can you please explain to me what the nature of this data is that people all over the country are going to be hurling around on some super-fast network, and more importantly, what will increased internet line speeds allow them to do specifically that they cannot do now? How are they constrained from growing their business until their internet connection speed is improved, given that even a bog-standard home ADSL link is more than adequate for most home-working, including video conferencing?

  5. HS2 Ltd propose to spend £33bn of taxpayers money on a solution that uses out-dated technology.
    The fact that HS2 Ltd has made a technological choice at the outset is unfair as it denies the taxpayer of a much more modern solution which could be better for them and the country.
    If we are talking about 10 years to Birmingham, maybe 30 to Scotland, then the technology is very important,
    HSR is not the latest technology even today, so in 30 years time, it will be even more out-dated, and Britain would look like backward country, having just completed a grand project using last century technology.

    This is the 21st century, we need to move on from the Victorian railways.
    If Britain is to build a new transport network, then let it be a new transport network, not something the French has had for 40 years.
    What can be more modern and fitting of the 21st century than a 300mph network of flying trains?
    Japanese Maglev trains travel at near 400mph, and they are replacing all their old HSR. (Which will get sold to Britain no doubt)

    Japan has always been at the forefront of technology, we should look at what they are doing, not get on the HSR money train with the rest of Europe.

      • @Ian

        You pose perhaps the most germane question of all?

        Let’s just say, on the basis of current technology, which could of course improve, that MAGLEV is perhaps twice the cost of conventional High Speed Rail, so eyewateringly expensive!

        On the topic of overall cost, seems as those in the anti-camp are quite prepared to sit on their hands when it comes to challenging the Secretary of State on overall costs, compared with equivalent projects on the other side of La Manche

        I posted a link to a recently announced High Speed Rail infrastructure project, linking Bordeaux and Tours, via Poitiers, to shorten the travelling time from Paris to Bordeaux to just over 2 hours. Of course the plane will then be extend from Bordeaux south to link up with the new lines being constructed in the Basque Region (just more segments in the burgeoning pan-European network)

        No one seems bothered that the costs of this project are approximately one fifth, pro-rata, of those for HS2. One wonders why – perhaps if too much scrutiny was focussed on the whole procurement process, thus exposing some of the dubious practices commonplace in UK projects of this type, the costs would fall significantly and a major plank in the entire StopHS2 campaign, suddenly the BCR would increase dramatically and the headline cost figures bandied about wouldn’t sound quite so frightening?

        But hey, call me Mr.Cynical but perhaps the anti-HS2 campaign is not the slightest bit concerned with wasting public money – maybe, when push comes to shove, they’re really only interested in one thing – moving HS2 somewhere else so into someone else’s backyard?

        • The amazing differential in costs has been brought up loads of times, but HS2 Ltd haven’t given answers. They just say it’s not their remit, it’s DfT, which is fair enough, but as far as I know the DfT haven’t answered. It (£17.5bn) is construction. Presumably Arup put the price up.

          • I have not seen a breakdown of costs, but I cant deny that its more expensive than the equivalent builds elsewhere in Europe.

            Maybe a request under the ” freedom of information ” act would do the trick?. Of course if the line was built as is for a lower price, it actually makes the BCR more attractive anyway.

            • @Gary: Of course if the line was built as is for a lower price, it actually makes the BCR more attractive anyway.

              Which, pardon my cynicism, might explain why the anti-HS2 brigade aren’t too voluable when it comes to this particular aspect of the debate.

              For me, it’s the only valid criticism of the general principles underpinning the project. The average Jo in the street should be jumping up and down and demanding to know why it costs so much more to build HS2 than it does an equivalent project elsewhere in Europe, just what is so peculiar to the UK that the overall budget is so large. I accept the fact that going into London is going to be expensive pro-rata; a) because London is just damned expensive per se (which explains in part why I avoid it like the plague if I possibly can) and b) tunnelling to avoid built up areas is more expensive than a surface line.

              However this doesn’t explain the disproportionately large mismatch. If the select committee acheives wants to acheive something constructive it should be to highlight this aspect and demand total transparency in the entire procurement process, with particular emphasis on the tendering and contract award elements. I’m firmly of the opinion that HS2, phase 1 should be costing no more than £9bn tops and phase 2 maybe £7bn more – in other words half the headline figure quoted!

              Now it may well be that the £32bn budget is inflated anyway, by the Treasury mandated optimism bias as it’s called and HS2 actually comes in at a lot less than the predicted cost, but why do I keep thinking this excessive figure is there to allow room for some shady dealing?

              I repeat, I’m 110% behind HS2 (I just wish they could build the planned line up to Leeds/Manchester right from the go and in a lot less time than the predicted timescale; the Tours – Bordeaux line [all 302km] has a six year build schedule so it doesn’t seem too much to expect something similar for HS2; start in 2015, finish in 2021, all the way to Manchester/Leeds) but the overall cost should be robustly challenged?

            • In Madrid,in Spain, a country supposedly in financial difficulties, a tunnel has just been completed which links the main railway stations to the north and south, the equivilent say, St. Pancras and Victoria, which will enable High Speed trains from France to run through to the South coast of Spain.

              This is in addition to both the existing shuttle trains and suburban local trains linking these two main stations and the Metro.

              The two Stations themselves have been enlarged and modernised so that the elegent 19th century trainshed at Atocha station is now connected to a huge modern extension, doubling its size, with the facilities similar to a large airport terminal.

              As with so many other infrastructure projects, large signs celebrating these developments refer to help from the E. U. Regional Development Fund.

        • There’s an infrastructure cost benchmarking section starting on page 12 of the HS2 Cost and Risk document -http://www.railwaysarchive.co.uk/documents/HS2_HS2CostAndRiskModel2010.pdf

          I’ve copied this section from the conclusions

          Potential causes of the variation which have been considered are :

          1. The extent to which HS1 and HS2 have been considered as discreet projects as distinct from being part of a rolling programme of construction which has given European railways and their contractors continuity of work and hence the opportunity to developed stable skilled teams and managements with efficient repeat work techniques using capital-intensive equipment

          2. A more prescriptive approach for transposition of EU legislation into UK law compared with a more enabling approach adopted in the countries studied. This appeared to have led to the creation of a number of overhead technical, safety and commercial checking and acceptance roles considered necessary in the UK environment which are not considered necessary elsewhere

          3. The extent of additional supervision seen as necessary given the one-off nature of work without the same developed skills of construction staff than on continuous work in Europe.

          4. Multiple layers of technical and commercial supervision, due to more of a trend in the UK towards multiple sub-contracting, each commercial layer adding overheads and profit

          5. Through the complexity of contractual relationships, the dependency which has emerged in the UK on large external Programme Management teams to achieve confidence in overall integration and management of delivery risks

          6. The potential, through the addition of optimism bias in the UK, to create self-fulfilling project price inflation whilst allowing “still on budget” completion – and therefore the belief that the optimism bias was justified.

      • Well a study by a group called UK Ultraspeed conducted a £1m study (using private money) into the application of Maglev in the UK.
        They found Maglev to cost £30m per km, about half that of HS2.
        but sadly, the govt disagreed with the scientists and the engineers and refused to give any credence to the idea declaring Maglev “too expensive”, and so funding for further more detailed studies where never awarded.
        Costs of Maglev in Japan and Shanghai have been more expensive than this however, but due to mountainous terrain, artificial land used as base, and earthquake protection, which do no apply for Britain.

        But the most important cost is not the initial build, but rather the long-term maintenance and running costs.
        Maglev has no wheels, no engine, it is pulled along by electromagnets, so is has very low maintenance cost indeed.
        The Japanese HSR trains go through several hours of maintenance every night, where as Maglev only undergoes a few days of maintenance per year.

        To cite my sources, the PDF’s of the study are available on my website

  6. Misinformation…DfT have said HS2 London to Birmingham will cost £17.5 billion
    HS2 Ltd have said the £17.5 billion London Birmingham is only the construction of the line. It does not include rolling stock, mitigation, compensation etc etc.
    Although their construction figures apparently haven’t been affected by inflation, it seems they don’t think they will be affected in the future.
    However they can’t put a price on rolling stock because they don’t know how much it will cost on the day.
    They can’t put a price on mitigation because they simply haven’t done the work.
    But HS2 will only cost £17.5 billion… By their own admission that’s blatant misinformation.
    So far we the £17.5 billion railway line with no train.
    Rather like the aircraft carrier without aircraft.

  7. At the Comprehensive Spending Review last Autumn, it was announced that DfT would be spending just under £60bn on transport in the current five year period.

    Let me repeat that – £60 bn on ALL transport – in a period until 2015. Of that, just £750 m on HSR .

    Now lets compare and contrast with the OP raised above. ‘We could spend on lots of smaller transport projects’.

    Well by my maths, 750 m from 70 bn is a bit over 1%. So that makes, lets say about 99% on other smaller transport projects.

    But lets look longer term.

    Lets take a fifteen year term, which is how long it will take to get the first part under way – you know the £17bn bit. Which already has a 60% optimism bias in it. Optimism? Not really, I would prefer we called it pessimism bias – but hey ho.

    So if the Govt are spending just under £70bn in the first five years, and lets for arguments sake say they will do a similar amount over the following two five year periods, then 3 x 70 = 210bn

    Lets say £200bn rounding down

    And the first bit of HSR is biased to £17bn, but lets be more gloomy and say it will be £20bn, seeing as all the engineering experts on here think it will cost significantly more – so lets chuck in another £3bn cost for good measure

    So where are we?

    Fifteen years transport spend on ALL transport = ca. £200bn

    One HS link between Birmingham and London = ca. £20bn

    Looks like about 10% to me, so we are spending 90% on ALL other transport modes – looks like lots of much smaller projects to me

    Seems like a pretty reasonable balance.

    So when we are looking at the total cost over the long term, lets try to put it into context.

    BTW, the taxpayer (i.e. us) are still putting £5bn p.a. subsidy into the rail system of the UK. Anyone think the business case stacks up for that?

  8. Yet another large slice of cynical divide and conquer tactics, trying to sew seeds of discontent – now the campaign seems quite willing to set all Parliamentary constituencies (via respective MPs, reacting to angry constituents letters?) at each others throats, scrambling for a fair share of the alleged £33 billion bonanza – just think what your constituency could do with the money?

    Of course this simplistic approach is errant nonsense and anyone with a modicum of common sense will instantly perceive its shallow origins?

    More to the point and far more constructive would be questioning the overall size of the budget involved, rather than where the investment funding is targetted.

    For example, in the last few days contractual arrangements have been formally established and signed, between RFF (French equivalent of Network Rail) and private companies to construct a new high speed line between Tours and Bordeaux – see URL link
    http://www.railwaygazette.com/nc/news/single-view/view/tours-bordeaux-concession-signed.html

    This 302 km high speed line links Tours, Poitiers and Bordeaux is expected to reduce Paris – Bordeaux journey times to just 2 h 5 min.

    The Capital cost of the work is put at €6·2bn, with the total financing package valued at €7·8bn !!!

    Contrast that with the headline projected budget for phases 1 & 2 of HS2, which at £32bn, dwarfs this figure for a comparable major infrastructure project.

    This is where public scrutiny should be properly focussed – just why does it cost so damn much to build a high speed line here compared with an equivalent counterpart on the other side of La Manche!

    The case for High Speed rail is already proven so let’s stop arguing over the principle and concentrate on the process of getting value for money?

    Somehow I think Phillip Hammond would be more open to challenge on this front?

    • What evidence do you have that high speed broadband will reduce travel demand? Past experience shows that improvements in communications have exactly the opposite effect.

      Essentially, the process is as follows: reduced cost – more efficient operations – increased economic activity – increased travel demand.

      Why didn’t travel demand reduce when the telephone was invented, or when email took off?

  9. There are indeed a great many ways of spending £33 billion of government funds , which is over a timescale of 20 or so years. As I keep stating however a cold hard fact of that spend is that it equates to just 20p of every £100 of total government spend.

    Penny mentions it could be used for building new schools. Back in 2004 , Tony Blair announced a £55 bn scheme called ” Building Schools for the Future “. This was the biggest school building scheme since Victorian times. Hard evidence of the results of that can be seen at the bottom of my back garden. which backs onto a brand new modern school ( with an eco roof ). The programme continues today.

    Penny mentions improved hospitals. You only have to look at Manchester to see the vast number of improved or new hospitals including the Royal Manchester Childrens Hospital. a state of the art building which replaced 2 that were life expired. Until last year, I worked there, its a stunning result from many years of hard work.

    Penny mentions job creation schemes. You only have to look at Manchester to see a major transport project in the form of Metrolink which is creating jobs over the next 3 years.

    Penny mentions broadband. We have had net access for years now, yet our appetite to travel shows no signs of diminishing. You only have to look at schemes like Crossrail and Thameslink which are using vast amounts of taxpayers money, money which stopHS2 do not seem to be protesting against being spent.

    The actual decision to go ahead with HS2 does not rest with Phillip Hammond. A vote on a bill by all MPs ( who we voted for in a democratic way ) will decide this.

    • Hang on Gary, last week your garden overlooked a hospital.
      Isn’t it about time you lived in the real world.
      I would remind everyone THIS SITE IS ABOUT A RAILWAY LINE NOT A TELEPHONE ONE
      and not to be distracted by facetious arguments.

      • I thought it was a railway line … ‘cos he said he’d got compensation and bought a second property? Or is that a different Gary? Apologies if I’m wrong, finding it difficult on this site to go back to verify. But somebody did!

        • Lel…..my property has a school at the back of it ( newly built ), I overlook the playing fields. I also have a disused rail line running at the side which forms the boundary of the school fields. This is now a bridleway, at one end of which are stables. The compensation i got related to noise nuisance when the M60 extension was built some years ago just about 1 km away. To be fair, I cant hear M way noise due to the fact it is in a cutting. which is what you find when rail lines are in cuttings.

        • No,Lel,that was the M25 ,with £2G compensation some years ago.Hospital has been mentioned(as somewhere he worked)and school nearby.Why two houses?Don’t keep us in suspense,Gary…

          • 2 houses…one is where I live, the other is inherited. In common with a lot of people, I cannot sell the inherited one as market is poor. I m renting that out for now, so of course the need to sell is not pressing. To make a comparison to the EHS scheme, I would assume I wouldnt qualify if that house was near HS2 route. This actually raises the question ( and i m sure it would have occured to some Chiltern residents ) of whether the government intends to use the purchased properties ( 34 so far ? ) as social housing?

            • Quite possibly.There have been cases of people who meet the criteria for EHS being turned down by the panel.On the point of what the Government will do with purchased properties,it remains to be seen,but leasing to buy-to-let landlords would be more their style.By the way,have just mown the front lawn.Unlike the back it’s unthreatened by land-take.This will have no effect whatever on jobs in the Midlands or North.Or on what hat I wear. Corrigendum:(previous post) M60,of course. P.S. Editor of Rail News joins the chorus of calumny against protesters.I do wish we weren’t all tarred with the same brush.Not all anti’s are anti-rail,or indeed ,anti-hsr.HS2 is the issue,especially the “preferred” route.

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