Parliamentary Written Answers reveal consultant costs

There have been two sets of written answers published by Patrick McLoughlin on Tuesday and Wednesday this week. On Tuesday, answers show that some consultancy firms (others like Atkins were not included in the question) have netted almost £150m out of the HS2 project so far. On Wednesday, it was confirmed that the recent KPMG report cost a quarter of a million pounds. Given that a new business case is due in a few months, the purpose of a report based on last years business case which included the suspended Heathrow link is unclear, unless it was just produced for PR purposes.

Hansard, 8th October 2013

Mrs Gillan: To ask the Secretary of State for Transport if he will (a) publish his most recent remit letter of HS2 Ltd and (b)the Memorandum of Articles of Association of HS2 Ltd, indicating where amendments have been made to ensure compatibility with that remit letter. [168572]

Mr McLoughlin: The information is as follows:

(a) The most recent remit letter dated 27 June 2013 is available on the HS2 website at:

http://www.hs2.org.uk/about-hs2-ltd/annual-accounts-corporate-plan

(b) The Memorandum and Articles of Association of High Speed 2 (HS2) Ltd are publicly available and filed at Companies House. These documents were reviewed in light of the new remit letter and it was considered that they did not need to be changed.

Mrs Gillan: To ask the Secretary of State for Transport what progress has been made on the recruitment of non-executive directors with specialist expertise in finance and communication to the board of HS2 Ltd. [168541]

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Mr McLoughlin: The Department is in the process of appointing an executive search consultant to manage the recruitment of the two non-executive directors for the HS2 Ltd Board. Once that is concluded, the Department will work with the consultants to get the posts publicly advertised, which we aim to do in the next few weeks.

Mrs Gillan: To ask the Secretary of State for Transport how much has been paid from the public purse to (a) Arup Group, (b)Balfour Beatty, (c) Kier Group, (d) Laing O’Rourke, (e) Mott MacDonald Group, (f) Skanska UK, (g) Dialogue by Design, (h)Capita Symonds Ineco JV, (i) Parsons Brinckerhoff, (j) URS Scott Wilson, (k) the ERM Temple Group Mott MacDonald Consortium, (l) Terra Quest, (m) Mouchell and (n) KPMG for contracts related to High Speed 2 since May 2010; and how much remains to be paid to each company under uncompleted contracts. [168540]

Mr McLoughlin: The information is as follows:

HS2 Ltd
SupplierSpend May 2010 to dateContracted further spend
Arup Group63,361,045.9312,658,471.36
Balfour Beatty00
Kier Group00
Laing O’Rourke00
MOTT MacDonald Group25,543,115.446,720,391.52
Skanska UK00
Dialogue By Design472,589.25974,689.65
Capita Symonds Ineco JV17,555,150.011,360,940.79
Parsons Brinckerhoff11,538,088.82794,264.78
URS Scott Wilson53,304.600
The ERM Temple Group MOTT MacDonald Consortium24,946,423.173,058,093.23
TerraQuest1,654,103.81290,418.37
Mouchel1,236,792.12120,400.88
KPMG2,129,039.46101,786.54
Total148,489,652.6126,079,457.12
DFT
Spend May 2010 to dateContracted further spend
Parsons Brinckerhoff1,400,0000

Mrs Gillan: To ask the Secretary of State for Transport whether his Department will revise construction cost estimates for High Speed 2 to include payment for VAT by HS2 Ltd. [168544]

Mr McLoughlin: Spending round 2013 set a long-term budget for delivery of HS2 of £42.6 billion (2011 prices). This includes contingency provision of £14.4 billion.

As the NAO pointed out in May, VAT

‘is an internal transfer within government rather than an additional cost’.

It would therefore not be right to include VAT within construction cost estimates.

In order to recover VAT incurred on the costs of constructing the railway, HS2 Ltd will have to register for VAT. To do so, it will have to satisfy HMRC that it

8 Oct 2013 : Column 193W

intends to make taxable supplies, as explained in paragraph 3.12 of the May 2013 National Audit Office report.

Mrs Gillan: To ask the Secretary of State for Transport whether his Department plans to issue a revised business case for High Speed 2 before the hybrid Bill for phase one of the scheme is deposited in Parliament. [168560]

Mr McLoughlin: The Department is currently revising the business case to take account of the latest available evidence and understanding of the project. The Government plans to issue the latest case for the scheme to support the deposit of the hybrid Bill for phase one later this year.

Mrs Gillan: To ask the Secretary of State for Transport whether the High Speed 2 community forums will meet after the date of deposit in Parliament of the hybrid Bill for phase one of High Speed 2. [168561]

Mr McLoughlin: Once the hybrid Bill for phase one of High Speed 2 has been deposited in Parliament, the main focus of HS2 Ltd’s work will be on supporting the parliamentary process, including engaging with those who petition Parliament regarding the Bill. In parallel, HS2 Ltd is committed to keeping open lines of communication with communities along the route, and will be discussing with those communities the best means of doing so, both through the round of forums now underway and through other engagement channels.

Mrs Gillan: To ask the Secretary of State for Transport whether HS2 Ltd plans to hold local information events during the consultation on the environmental statement for phase one of the High Speed 2 scheme. [168562]

Mr McLoughlin: The consultation on the environmental statement for HS2 phase one that will follow the deposit of the hybrid Bill, is required by parliamentary standing orders. The purpose of the consultation is to ensure that Parliament is informed of people’s view on the environmental impact of the scheme to allow Parliament to consider this as part of its deliberations on the forthcoming hybrid Bill. Standing orders do not require local information events and as such HS2 Ltd are not planning to hold any.

Mrs Gillan: To ask the Secretary of State for Transport if he will publish the report from the Audit and Risk Management Committee presented at the board meeting of HS2 Ltd on 18 July 2013. [168569]

Mr McLoughlin: The update from the Audit and Risk Management Committee was given verbally at the meeting. HS2 Ltd does not hold a written report.

Mrs Gillan: To ask the Secretary of State for Transport what the cost to the public purse is of holding the September HS2 Ltd board meeting in Liverpool. [168570]

Mr McLoughlin: HS2 Ltd held its September 2013 board meeting in Liverpool and used the opportunity to meet with key stakeholders, avoiding costs that would otherwise have been incurred for separate meetings.

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The cost of holding this meeting was £4,125.50 and spending was within HS2 Ltd expense limits as set out in our policies.

HS2 Ltd does not have access to costs incurred by third parties such as Merseytravel.

Mrs Gillan: To ask the Secretary of State for Transport what the cost to the public purse was of holding the July board meeting of HS2 Ltd hosted by Sir Albert Bore and Birmingham city council. [168571]

Mr McLoughlin: HS2 Ltd held its July 2013 board meeting in Birmingham and used the opportunity to meet with key stakeholders, avoiding costs that would otherwise have been incurred for separate meetings.

The cost of holding this meeting was £3,181.33 and spending was within HS2 Ltd expense limits as set out in HS2 Ltd’s policies.

HS2 Ltd does not have access to costs incurred by third parties such as Birmingham city council.

Mrs Gillan: To ask the Secretary of State for Transport if he will list the panel of experts who peer reviewed the KPMG report into High Speed 2; and what (a) interests they declared and (b) remuneration they received for their work. [169276]

Mr McLoughlin: The panel of experts who peer reviewed the work were:

Bridget Rosewell—Volterra

Chris Nash—ITS Leeds

David Simmonds—David Simmonds Consultancy

David Tuck—GENECON

Paul Buchanan—SKM Colin Buchanan

Rob Colley—Deloitte

Roger Vickerman—University of Kent

Tony Venables—University of Oxford

(a) One of the members of the panel declared a pre-existing contract with a county council to implement and test an extension to a country wide economic model which assesses the effects of changes outside the local area on the local economy and hence on local land uses and transport systems.

(b) The cost of the peer review was £13,858 inclusive of VAT.

Frank Dobson: To ask the Secretary of State for Transport how much was paid to KPMG for the report on the regional economic effects of High Speed 2. [169377]

Mr McLoughlin: The amount paid to KPMG was £242,126 inclusive of VAT.

Frank Dobson: To ask the Secretary of State for Transport how much was paid to those who peer-reviewed KPMG’s work on the regional economic effects of High Speed 2. [169378]

Mr McLoughlin: The total cost of the peer review was £13,858 inclusive of VAT.

Frank Dobson: To ask the Secretary of State for Transport which items were included in the original estimate of £1.2 billion for the full scale works at Euston for High Speed 2; and what changes to this figure contributed to the revised cost of £2 billion for this work. [169379]

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Mr McLoughlin: The £1.2 billion estimate was a pre-feasibility concept estimate that included the assumed works to the station and civil engineering in the throat. The items contributing to the revised cost of £2 billion include additional civil works; additional station and passenger facilities; emergency and safety measures; enhanced Transport for London (London Underground) requirements; increased urban realm works; and allowance for railway systems.

Frank Dobson: To ask the Secretary of State for Transport which items were included in the original estimate of £1.6 billion for the reduced High Speed 2 Scheme at Euston. [169380]

Mr McLoughlin: The items included in the estimate of £1.6 billion for the current, modified High Speed 2 Scheme at Euston include the station works associated with High Speed 2, Network Rail and Transport for London works to the underground station. The estimate is also inclusive of the civil engineering works in the approach to the station.

Frank Dobson: To ask the Secretary of State for Transport if he will publish all communications between his Department and KPMG (a) before and (b) during KPMG’s assessment of the regional economic effects of High Speed 2. [169381]

Mr McLoughlin: The Department did not communicate directly with KPMG during their assessment. The work was commissioned and managed by HS2 Ltd. The Department provided comments on a draft of the document for consideration by the review panel established by HS2 Ltd to provide critical feedback to KPMG.

Mrs Gillan: To ask the Secretary of State for Transport if he will publish the remit and all commissioning documents and instructions given to KPMG in advance of its production of its recent report into High Speed 2; what fee his Department has paid to KPMG for production of that report; and when that report was first commissioned. [169382]

Mr McLoughlin: The recent KPMG report on HS2 was commissioned by HS2 Ltd, not the Department for Transport. In the interest of transparency we have placed the Tender document in the Libraries of the House. The report was commissioned by HS2 Ltd on 22 March 2013 and the contract was awarded on 24 April 2013. The final fee for the report, as invoiced by KPMG, was £242,125.90 including VAT.

Mrs Gillan: To ask the Secretary of State for Transport whether a decision has yet been taken on the distance applied to the property bond option currently being consulted on by his Department; and what consideration he has given to whether such a bond could be applied to affected properties more than 120 metres away from the High Speed 2 line used in the Deloitte report on the property bond design for High Speed 2 affected properties. [169646]

Mr McLoughlin: The Government is currently consulting on proposals for property compensation schemes along the phase one line of route. It would be inappropriate for me to comment further at this stage.

 

Hansard, 9th October 2013

 

Gloria De Piero: To ask the Secretary of State for Transport what steps he is taking to protect Grade I and Grade II listed buildings during the construction of High Speed 2. [169044]

Mr McLoughlin: HS2 Ltd has sought to avoid direct impacts on all heritage assets during the route selection process. No grade I or II* listed buildings are currently directly physically affected by either phase of the proposed HS2 route.

With the current proposed scheme for phase 2, eight grade II listed structures would be directly impacted although, with detailed design, preservation may be possible for some of the structures.

Andrew Bridgen: To ask the Secretary of State for Transport what amount was paid by HS2 Ltd to KPMG for its report, HS2 Regional Economic Impacts, published in September 2013. [169291]

Mr McLoughlin: The amount paid to KPMG was £242,126 inclusive of VAT.

Frank Dobson: To ask the Secretary of State for Transport whether the cost of chassis-compatible High Speed 2 trains is included in the current published estimate for the cost of High Speed 2 rolling stock. [169694]

Mr McLoughlin: The cost of the classic-compatible High Speed 2 trains is included in the current published estimate for the cost of High Speed 2 rolling stock.

 

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9 comments to “Parliamentary Written Answers reveal consultant costs”
  1. Rail use more than doubled since the early 90’s whilst motor vehicle use has been in decline since before the recession, rails overall market share is nearer 10% now not 3, it was 6. However most journeys are under 5 mile in length a market rail is not really in, when you look at rails market share of journeys over 5 mile in length it’s nearer 25%.

    • Passenger growth on the Virgin West Coast has gone down 2009/10 20.5
      2010/11 9.3
      2011/12 4.1
      2012/13 0.9
      So no we don’t need to increase long journey capacity .Lots of people are saying it is short journeys in the north and south.The area HS2
      would cover will not free up the line spaces needed as they are not in the right areas.

      • You quote a household survey that’s done each year whose primary purpose is to track long term changes. Its just what 8,200 households claiming to represent 19,000 people said they did that particular week the survey was done.

        Its not gospel truth to be extrapolated across the whole of the UK population of 60 million. If you look back at previous surveys the change from year to year in the different modes can be quite choppy.

        Compare (from 2010)
        Between 1995/97 and 2010 trips by
        private modes
        of transport fell by 14% while
        public
        transport modes
        increased by 8%.

        with Keys Findings from 2012
        Since 1995/97, trips by private modes of transport fell by 14% while public
        transport modes increased by 2%

  2. Of course they will spend more on repairs, upgrades and improvements on the rest of the network than on HS2. There are, after all, 10,000 miles of it compared to its 341 miles. Some of the work will be upgrade and achieve a significant difference, as Norton Bridge (why was it not done years ago? – because we could not afford it!), while other repairs will just be making up for past neglect. While appearing to be taking a special interest to improve the network in some areas at the moment, when the work starts proper on HS2, govt takes £7.7bn from the crumbling Victorian classic lines to support HS2.
    Of course HS2 is affordable. What’s £43bn out of £1.4tn of national debt? About 3%?? of or a year’s interest on that debt. To some, a drop in the ocean.
    Are you sure they’re not pulling a fast one on you, too!

      • John,
        my comment was actually in response to the other John. I believe that they are being taken in just as much as the rest.
        The Hs2 argument is that they want to increase greatly the use of rail. If HS2 runs at full capacity of 18 trains with 1100 passengers for 14 hours per day, it will increase UK passenger journeys of 1bn per year by 10%. Everyone knows of course that this concept is a joke.
        Take Norton Bridge: this will be improved / transformed at a cost of £250m (in today’s money – it would have been lower cost had it been done along with the original WCML renovation – HS2 is priced also in today’s money but 10-20 years ahead, so is not). Norton Bridge was not done before because ‘they’ needed to save money / cut corners – at a time when we thought we were poor but we were not broke. ‘They’ now want a Rolls Royce as if to make up for past failure to do anything when we are now drowning in an ocean of debt.
        But don’t worry, by the end of this week, our Chancellor will be able to announce that China, for whom £43bn is petty cash, or a drop in the ocean, will come to the rescue.

  3. Surfacing are locations and sections with poor rail services after this HS2. People who find train takes twice as long as car and twice the cost. This is being found on phase 1 and phase 2. The poor arrangements and doubt in London at park royal and camden and suggestions of the need for more tube, rail and road connections at and to old oak common. The donut displacement of people out of London is now being realised as part of the growing problem of working population diaplacement. This is resulting in standing room at peak times over the 20 mile to 60 mile journeys not the 200mile journeys mainly. All this cost and effort for the wrong phase 1 route shows poor executive action. Politicians have failed to produce a convincing plan.
    Rail guards and drivers see the overcrowding sections and time and the need to replace older 25 year old and more trains and remove bottleneck junctions and add some new sections and some short section to help the network across more journey destinations then with HS2.

    • I think I can see what you’re driving at- but could you please slow down- It’s all a bit tangled up!

      With regard to London becoming a doughnut, more living space surely is being created in the centre, sometimes on former industrial sites- for those who can afford it,thus saving the cost of commuting.
      There is also the prospect of a million extra people living in the city forecast for the next decade or so,,,

      ‘…add new sections…,exactly where, I wonder? Could you please be a bit more specific about this?
      ‘Upgrading existing lines…’ is happening all over the network already, and at a total cost-over the years- exceeding that planned for the HS line…even though this work in progress and planned involves considerable disruption and periods of inevitable closure to services while the work proceeds.

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