Introducing his ‘Blank Cheque’ Paving Bill for HS2, Transport Secretary Patrick McLoughlin has announced an amazing £9.9bn increase in the costs of the project, just hours after Chancellor George Osborne outlined £11.5bn of ‘essential’ cuts in his Spending Review. The construction costs for Phase 1 will now cost £21.4bn, whilst Phase 2 will cost £21.2bn. These costs are already out of date as they are based on 2011 figures, with construction not due to start until 2017. Included in the £42.6bn is a £14.4bn contingency, which McLoughlin wrongly announced as being £12.7bn. DfT and HS2 Ltd officials have always said until now that the costs of HS2 would never increase because there was an £11.1bn contingency built into the previous cost.
The cost until today was stated to be £32.7bn, but neither this, or the new £42.6bn figure included the cost of trains. The rolling stock cost was today estimated as £7.5bn by McLoughlin, but the National Audit Office recently reported it to be £8.15bn. Whichever cost of trains is accurate, the total bill for HS2 has now topped £50bn, which campaigners believe will continue to escalate due to the number of things clearly not included in the costs.
MPs voted for the ‘Blank Cheque’ Bill, which will now go to committee stage before coming back to the Commons and on to the Lords at a rate of 10 to 1. Stop HS2 will be giving evidence to the committee on 9th July, but the next focus will be the Public Accounts Committee, who have previously been highly critical of HS2 on Monday (1st July).
Despite the rocketing costs of the project, HS2 Ltd CEO Alison Munro issued an unbelievable statement, saying: “We have managed the scope for Phase One to arrive at a reference design that meets the objectives set by DfT for HS2 and have done so broadly within the cost and contingency envelope of £16.3 bn set out by the previous Secretary of State in Jan 2012. My team will continue to be focused on control of costs”
Stop HS2 Campaign Manager Joe Rukin said:
“The casual way in which a 30% jump in the costs of HS2 has been announced by the Transport Secretary, which almost completely wipes out the cuts made in the spending review is unbelievable. We are now looking at a total cost of over £50bn on a train which will only benefit the richest in society. The DfT have always said the costs wouldn’t go up as there was an ample contingency built in, but now we know, like everything else which has been said about the case for HS2, that this was completely false. As Frank Dobson pointed out, there are still loads of items which have yet to be added into the costs and the costs for this project will only continue to spiral. To push ahead with HS2 blindly because it sounds like it must be a good idea is simply insane and a kick in the teeth to everyone affected by the cuts.”
“The MPs who have voted for the blank cheque have only shown that they are totally out of touch with the common man, and HS2 Ltd have responded to the fact they are ten billion by saying they are ‘broadly within the envelope’. I don’t know what planet they are on, but I wouldn’t want to be picking up their stationery bill.”
Penny Gaines, chair of Stop Hs2 said:
“We’ve been saying for some time that HS2 has gone over budget years before construction was due to start. In the House of Commons today, the Secretary of State was finally forced to admit that by upping the budget by £10bn making the headline cost £42bn. And that still doesn’t buy any rolling stock. it’s clear there are too many unanswered questions about HS2. We’re still waiting for the publication of the Major Projects Authority reports from the last two years, which have given HS2 three consecutive amber/red warnings, the National Audit Office had major criticisms, and just last week the New Economics Foundation said there were far more effective ways of spending £33 billion, but now it’s £43 billion”
“It was an incredibly cynical move to announce this increase in cost without giving MPs time to absorb the implications of this massive price rise, or provide an updated the benefit cost ratio, and with these extra costs it’s going to take some very creative accounting from HS2 Ltd to try and say this project won’t lose money. The Government clearly decided to rush on with a vote before more people have looked at it closely, because when they do they see the many flaws in the HS2 proposal.”