This was first published on HS2 and the Environment by Peter Delow.
“Edward Miliband (Doncaster North) (Lab): In the light of his U-turn on alcohol pricing, is there anything the Prime Minister could organise in a brewery?”
Hansard 13th March 2013, Column 297.
Whilst it was not, it would seem, a genuine request for information, the opening question to the Prime Minister from the The Leader of Her Majesty’s Most Loyal Opposition certainly appeared to have the, presumably, desired effect of throwing Mr Cameron off guard.
Now Mr Miliband is, of course, a supporter of HS2, but if he had a more open mind on that subject he might well wish to ask a similar question about HS2 and the organisational abilities of the company set up by the Government to implement this “white elephant” project.
Such a question might be prompted if Mr Miliband were to read an article that appeared recently in the Independent on Sunday. This article claims that the HS2 project is, “in crisis over its £33bn budget four years before construction even starts”. Specifically, we are told that:
“HS2 is plagued by flawed IT systems, rising construction costs and huge design rethinks”.
And that:
“The cost is expected to soar beyond its existing budget, forcing a Department for Transport-backed team in charge of preparatory work – HS2 Ltd and its private sector partner, London Olympics programme manager CH2M Hill – to set up a committee to slash costs as they scramble to keep the project under control.”
One of the areas of overspend identified by the Independent on Sunday is “professional service contracts”. The article reports “industry insiders” as estimating a fifteen per cent overspend in this budget item, and it is easy to see how this could have happened, bearing in mind the daily costs that employing some consultants can entail and the large number of individual consultants that appear to be working on a wide range of activities. Put bluntly, HS2 Ltd appears to be throwing money at getting the job done within the timescales dictated by its political masters.
The newspaper article also singles out HS2 Ltd’s IT system as an example of an expensive purchase that seems to have been somewhat disappointing. From consulting “documents in the House of Commons Library” the Independent on Sunday has been able to identify the cost of this system as £16.8m. The Chief Executive of HS2 Ltd, Alison Munro, is quoted as admitting to “teething problems” with the system. The Independent on Sunday reminds us that the supplier of this system, Fujitsu, was fired by the Department of Health for “non-performance” in an £896m contract to upgrade NHS systems. The newspaper also advises that:
“Industry sources claimed that the problems are much more severe and Ms Munro said she was keeping the IT programme ‘under review’. The Cabinet Office is also looking into the spending, though HS2 argued that this was ‘standard practice’”.
The worry that I have is that, in view of the need to trim costs back, “non-essential” elements of the budget, such as mitigation, will be slashed.
It appears that an early casualty of the “scramble to keep the project under control” is Euston Station. The Independent on Sunday reports:
“Last week, the Labour MP Frank Dobson revealed that HS2′s plans for the revamp of Euston station, which is in his constituency of Holborn and St Pancras, have been massively scaled down after officials discovered they had underbudgeted by 30 to 40 per cent.”
This rethink has since been confirmed by HS2 Ltd. I will look at this truly remarkable development further in my next couple of blogs.
The railway industry appears to find it difficult to bring in projects on time and within budget. The relatively recent West Coast Main Line (WCML) upgrade is a case in point; it went so far over budget that the scope of the work had to be scaled back, leaving us with an incomplete job that did not achieve the project brief. The Department for Transport has also shown to be wanting in the recent “WCML franchise fiasco”, as it has become known.
Railway projects personnel must, of necessity, be drawn from a very small pool of experienced staff. It is likely therefore that an appreciable number of the people working on the HS2 project will have at least one epic failure on their CV. This likelihood is yet another reason to doubt, in Mr Miliband’s terms, that the entertainments programme in the HS2 brewery will be effectively managed.
However, it appears that we can rest assured that at least one of the parties working on the HS2 project is up to scratch, based upon the view of none other than the Transport Minister, Simon Burns MP. He was asked recently in a Commons written question (Hansard 22nd March 2013, column 761W),“what compensation he plans to seek from Dialogue for Design following the adverse judgement against the running of the first consultation compensation process for High Speed 2”. The minister’s reply was categorical:
“The flaws identified by Mr Justice Ouseley in the Government’s 2011 consultation on compensation were not related to Dialogue by Design’s analysis, nor were they caused by any fault of Dialogue by Design. Therefore there is no need for the Government to take any action against them.”
So whose fault was it, then?