The National Audit Office has produced their long-awaited report into HS1, which has highlighted;
- Passenger numbers have fallen far short of original forecasts.
- Project costs exceed the value of journey time saving benefits.
- Construction costs were 18% higher than target costs.
- Passenger numbers were two-thirds of their forecast level.
- The Department for Transport has no value to attribute to the project’s benefits as they have not yet developed a method to evaluate project costs and benefits (despite High Speed 2 being based on similar project benefits).
- These costs and benefits have not been assessed for over a decade, despite promises made to the House of Commons Public Accounts Committee.
In addition to the under estimated cost of contruction, the NAO believe the final cost to the taxpayer will be in excess of £10bn. Their report goes onto say that “In such cases, departments should ensure that demand forecasts are subject to rigorous scrutiny and scepticism. Departments should assess the benefits under a range of different scenarios, perform a sensitivity analysis of key assumptions and a sense check to understand the reality of meeting forecast demand.”
It has been clear from the start that this has not been done with HS2. The HS2 “challenge panels” were criticised by the Transport Select Report last year for being made up of too many people who were already publicly supportive of high speed rail, and the passenger forecasts have already changed twice in the space of two years. As with HS1, the BCR, which represents the supposed benefits to the taxpayer keeps hovering around 1.5, below which Government rules say the project should not proceed. As was the case with HS1, these benefits of HS2 are completely intangible and there is no method yet devised of measuring them.
Margaret Hodge MP, chairman of the House of Commons Public Accounts Committee, said: “I am yet to be convinced that HS1 will prove to be value for money. Yet again we hear that value for money will depend on uncertain benefits which have not been quantified. We will want the department to do all it can to realise the benefits and turn this sorry story round.”
Stop HS2 Campaign Coordinator Joe Rukin said;
“HS1 shows just what we have always suspect will be the case about HS2, it will be an absolute disaster. Today we have seen absolute hypocrisy from those supporting HS2. For two years they have been citing HS1 as the perfect example of why HS2 will be a success, whilst completely ignoring the facts. Now it has been proven that HS1 has been a disaster for taxpayers, they have done a complete u-turn and are saying comparing the two is ‘disingenuous’ or like ‘comparing apples with pears’. But in some ways they are right, because what the NAO report shows is that the disaster of HS1 will be dwarfed by HS2. Besides there being even more cost and more intangible benefits used to justify that cost involved, HS1 was something new, there were no rail alternatives. With HS1, the DfT failed to see the competition to get across the channel from low-cost airlines, but with HS2 there are other lines people can use, they can drive and most importantly, with the growth of IT over the next 15 years, they might decide there is no need to travel at all.”
Stop HS2 Chair, Penny Gaines said;
“On top of a massive growth in demand for travel which HS2 Ltd are predicted, the business case for the proposed railway relies on a quarter of the passengers only travelling because the railway has been built. This is already in clear conflict with other Department for Transport policies on reducing demand for travel, such as the Anywhere Working initiative.”