Public Accounts Committee said Franchising Civil Servant’s HS2 thinking was ‘Bonkers’ & ‘Shocking’.

According to the DfT business plan, Steve Gooding the civil servant in charge of HS2 for the Department, is also jointly in charge of franchising with colleague Peter Strachan. This week all future franchises are on hold following the decision to cancel the outcome of the West Coast Mainline bidding process, after ‘serious technical errors’ were only found due to work being carried out in preparation for the legal challenge being brought by Virgin.

Warning signs over the Departments approach were there for all to see back in April, when Gooding was trying to justify the DfT’s methodology and assumptions regarding HS2, and Chair of the Public Accounts Committee Margaret Hodge was highly critical of their approach. So poor was the performance from Gooding and DfT Permanent Secretary, Philip Rutnam that the Stop HS2 campaign made it into a music video.

When Gooding said the DfT had not thought there would be a premium price on HS2, Hodge said;
“Well, that’s wrong. That’s crazy. If you haven’t assumed a premium price and you know it’ll cost more, that is bonkers…… Your modelling is really quite shocking. It seems to me that you are biasing the modelling assumptions, because you’re putting in a modelling assumption that there will not be a premium price, to demonstrate your additional passenger numbers.”

There were other gaffes, including Gooding being particularly evasive in answering some questions, including simply confirming the fact that the greatest growth in rail has been in regional, not long-distance travel.

On Wednesday, Transport Minister Simon Burns on Newsnight dismissed the idea that civil servants could have made the same errors on HS2 that have been made on the WCML because “It has been looked at time and time again, not only by the DfT but also HS2 itself.”

Joe Rukin campaign coordinator for Stop HS2 said;
“Back in April the Public Accounts Committee were massively critical repeated failures of the DfT, both in their forecasting and the assumptions they make, but no-one was listening. You just have to look at how civil servants performed that day at the PAC to see why the DfT is such a mess, there is a culture of ineptitude which seems to have seen people promoted above their level of incompetency. We’ve got a situation with HS2 that they have revealed they have lost consultation responses not just once, but twice, so why on Earth does anyone think they can get anything right?”

“Simon Burns said on Newsnight that he was confident that there would be no problem with HS2 because both the DfT and their wholly owned subsidiary HS2 Ltd have checked the figures. He is clearly new in the job and has no idea what they are like. He seems not to know that when they did look at the figures again, they ended up downgrading the business case three times. They only got it part of the way back up in August by cutting the cost of the countryside by over £4bn to under £1bn, despite agricultural land values almost doubling since HS2 was announced. Every part of the case for HS2 is fiction, and like with the WCML, it will only be because of the upcoming legal challenges that they check the figures properly.”

Click here for a playlist of parts of the evidence session at PAC or here for minutes of the evidence from Steve Gooding to the PAC

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Selected parts of the PAC minutes;

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Steve Gooding: We haven’t actually put a premium price into the modelling for the high-speed rail service.

Q43 Chair: Well, that’s wrong. That’s crazy. If you haven’t assumed a premium price and you know it’ll cost more, that is bonkers.

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Steve Gooding: We can undoubtedly build in a sense of a higher price-a premium-for getting the time saved and the higher-speed service from the high-speed line. There would then, as I think the Chair is getting at, be a trade-off between the willingness to pay the higher price and the volume of traffic that the line is to carry.

Q49 Chair: Your modelling is really quite shocking. It seems to me that you are biasing the modelling assumptions, because you’re putting in a modelling assumption that there will not be a premium price, to demonstrate your additional passenger numbers, then you say, “Actually, there might be a premium price, because people will want to get there faster”. You’ve got to build that assumption about there being a premium price into your modelling of passenger numbers, because that’s what went wrong, going back to what we hear about. That’s one of the things that went so badly wrong with HS1.

Philip Rutnam: I really don’t think it was one of the things that went wrong with HS1, if I may say so. In relation to-

Q50 Chair: The Report says it is.

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Q58 Chair: In your own thing, you talk about a rough doubling of long-distance demand of 2008 levels. That is what you believe. I am gobsmacked by that.

Steve Gooding: As Philip has said, we have seen significantly higher annual rates of growth in the long-distance market over the past 10, 15 and 20 years. We have set in a lower rate, and then we have sought to cap it. Some of the consultees to the exercise that we ran last year think that was cautious on our part. I accept that others thought it was-

Q59 Chair: As I understand it, if you look at ORR and its work during the past decade, the greater growth comes in regional traffic.

Steve Gooding: No, the ORR figures that I have still show a significant growth in the long-distance traffic.

Q60 Chair: But the greater growth is in regional traffic.

Steve Gooding: There has been significant growth in all of our markets.

Q61 Chair: But the greater growth is regional. When you are making capital investment decisions and you want to deal with congestion, the greater growth is in regional traffic.

Philip Rutnam: The greatest growth may have been in regional traffic.

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Q93 Meg Hillier: You count the £70,000 a year as an average cost to businesses?

Steve Gooding: It is the cost to the business, so it is not a salary cost.

Q94 Meg Hillier: Well, take a salary at a third of costs. That is still quite a generous salary for my constituents.

Steve Gooding: That is the number that we got from the survey work that we have done.

Q95 Chair: When did you do that survey work?

Steve Gooding: The survey work was done in 2002-03.

Q96 Chair: Should you not update it? It seems a potty figure to all of us. You are in the top decile of earnings.

 

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3 comments on “Public Accounts Committee said Franchising Civil Servant’s HS2 thinking was ‘Bonkers’ & ‘Shocking’.
  1. We are now told there could be significant elecricity cuts in 3 years.The government should get that sorted before having a train that uses huge amounts.It is not something that future generations will remember them kindly for if they don’t.

  2. Radio 4 news item said there are energy shortages forecast this winter. HS2 uses about four times the energy compared to conventional rail, What are HMGs priorities?

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