Official figures show HS2 is a dead duck

This is a guest post by Jerry Marshall, originally published on HS2 Questions.

David Cameron said he leads a government that doesn’t keep ploughing into a brick wall, it has the common sense to change its mind.

HS2 has reached a brick wall. Three killer facts have emerged from the government itself. No government with common sense could possibly continue. It’s only a matter of time, though every week of delay means more good money thrown after bad and less time to implement the better and more affordable alternatives.

Official killer fact #1: the business case has collapsed

The official business case has fallen apart. The benefit cost ratio (BCR) for phase 1 has fallen from 2.4 in March 2010 to just 1.2 today and 1.4 for the whole Y. A fifth downgrade is expected to be released in the summer incorporating the new, lower GDP figures.

Even the official BCR of 1.2 (and falling) massively overstates that case. Using the latest Passenger Demand Forecast Handbook (v5.0) cuts the BCR by 0.4. Using the correct figure for business passengers’ earnings cuts it by a further 0.3. And assuming time is not wasted on trains cuts the figure further still. The true figure is likely to be under 0.3, i.e. 30p of benefit for every £1 invested.

Even 1.2 is well below acceptable limits for government funding and well below the alternative proposed by 51m, which has a BCR of over 5.

Official killer fact #2: “successful delivery in doubt”

The BCR above relies on successful delivery of the project. However, the Major Projects Authority has given the HS2 project an Amber / Red rating, meaning: “the successful delivery of the project is in doubt, with major risks or issues apparent in a number of key areas.”

Official killer fact #3: the capacity crunch is a myth

The July 2011 Rail Utilisation Strategy shows that long distance services in to Euston are at just 60% of capacity for the three hours of peak morning demand, and just 64% in the busiest hour. This makes Euston the least busy long distance service; Paddington and Waterloo are both over 100% in the peak hour. Furthermore, Euston utilisation will fall as new carriages are added this year. And as the 51m alternative delivers more capacity than the DfT forecast, there is no capacity crunch on the West Coast Mainline for many decades, if at all.

So HS2 is not needed and makes no economic sense. The Government should abandon the project now before more money is wasted. Instead, David Cameron should have the common sense to take a fresh look at the more affordable alternatives, which will increase capacity and cut journey times for more people, and more quickly, than HS2, as well as creating the jobs and growth we urgently need.

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4 comments to “Official figures show HS2 is a dead duck”
  1. of course if you include wider economic benefits as we should do then the business case is improved greatly, estimates for these benefits for hs1 for example based on actual data is in the area of £20 billion so not a trivial amount. and of course the figures used to calculate the expected passenger numbers for hs2 and hence the business case are estimates which are very much lower then what is being experienced now.

    the environmental benefits arealso likely underestimated – again using the example of hs1 6% of journeys were previously made by car. About 7% previously used other presumably slower railway services thus freeing up space for more passengers on those trains which is what will occur with hs2,

      • i dont know how much they are exactlyfor hs2 although hs1’s wider economic benefits have been estimated at £20 billion. This would improve the business case for hs2 considerably.

  2. On today’s daily politics Grant Shapps seemed unconcerned that the business case has collapsed and said that hs2 must be built as we haven’t built infrastructure north/south for many years and it was time to do something about it
    May I remind him that he is employed by us to get maximum value for our money and that he should be ensuring that sufficient houses are built so that people can live closer to their place of work

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