HS2 Ltd blow £302m on contractors, splurging £170m in just 10 months.

A study, undertaken by the Tax Payers Alliance, of payments from HS2 Ltd made to external agencies has shown a total of £302m was paid out between January 2011 and October 2013. The data shows a recent splurge in spending, with £170m being spent in the first ten months of last year. The data also calls into question the accuracy of what MPs have been told about HS2 spending.

On 7th July 2013, then Rail Minister Simon Burns said into a response to a question from Andrew Bridgen MP about expenditure from HS2 Ltd on ‘outside bodies, promoting HS2’, that Tomboy Films had been paid £86,043 by HS2 Ltd for promotional videos, whilst Westbourne Communications had been paid £164,784. By October 2013, these firms had been paid £128,000 and £262,141 respectively. However, Mr Burns neglected to mention payments to other companies such as CH2M Hill, who have been paid £378,640 for ‘External and Parliamentary Relations.’, which for some reason he did not think counted as a payment to an ‘outside body, promoting HS2’.

In fact, the total external bill on PR and external relations for just ten months of 2013 was £1,083,662, including an eye-watering £104,891 being paid to Precedent Communications, just to run the HS2 Ltd website during that period.

The lions’ share of the £302 million spent from January 2011 to October 2013, £192 million, has gone to just five companies:

  • Arup –                                   £ 68,567,229.32
  • Atkins –                                 £ 35,747,165.83
  • ERM –                                    £ 30,754,670.50
  • CM2M Hill –                           £ 29,240,628.94
  • Mott Macdonald –                  £ 27,709,804.67

A total of £9,893,072 has gone to agencies, with the vast majority of these being employment agencies, despite the fact that by the end of October 2013 HS2 Ltd only employed 557 staff.

The data also shows that it pays to support HS2. KPMG, who were paid almost quarter pf a million to produce a report which relied on untested methodologies, and was described by independent assessors as ‘essentially made up’ with even DfT analysts saying the claimed benefits were ‘implausibly high’, trousered £2,283,451 in total. Birmingham Chamber of Commerce, who have provided support for the project since 2010 have been paid a £14,400 ‘patronage fee’ to cover September 2013 to August 2014. Steer Davies Gleave, whose Jim Steer set up pro-HS2 lobbyists Greengauge 21 were paid £65,800 in 2013.

One piece of spending which was almost certainly wasted was £36,000 paid to Booz & Co for ‘Advice on HS1 passenger forecasts’. Any such advice would surely have shown that the HS2 passenger forecasts are like those of HS1, grossly optimistic and in need of a downward revision.

Stop HS2 Campaign Manager Joe Rukin said:

“The amount of money which HS2 Ltd spent is staggering and clearly represents tax-payers money being poured down the drain in an uncontrollable fashion, and it is no surprise now that Government needed the blank cheque for development work which their Paving Act gave them last year. We have always known that HS2 is being driven by those with vested interests, and every line of expenditure stinks of jobs for the boys with an ever increasing number of snouts in an ever expanding trough.”

“Just to show how useless HS2 Ltd really are, they are paying over £100,000 per month on PR, yet the project gets more unpopular by the day. It doesn’t matter how much cash is thrown at promoting HS2, it will always be a vanity project no matter how hard people making a fast buck try and spin it. It is clear that MPs have been deceived by the answers they have received in Parliament about HS2 spending, but this is just another in a long list of examples of incompetence and deceit from those advocating the project.”

Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance said:

“It’s clear that bureaucrats in charge of delivering HS2 have embarked on a wasteful spending binge at taxpayers’ expense. Such lax spending controls are symptomatic of a rail project that is terrible value for money and being driven by vested interests, not those of taxpayers.”

“It’s disgusting that so much taxpayers’ cash has been wasted on spinning and lobbying for the flawed scheme. Not even a million-pound PR bill will change the fact that HS2 is a white elephant that will cost every family in the UK a fortune and fail to deliver on its grandiose and unrealistic promises.”

“It’s particularly troubling to see HS2 Ltd throwing money at its cheerleaders. Despite numerous attempts to make its numbers add up, hard-pressed families haven’t been duped into backing the line. It’s time to scrap this costly project before any more taxpayers’ money is poured down the drain.”

One comment to “HS2 Ltd blow £302m on contractors, splurging £170m in just 10 months.”
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