Osborne wants to spend more on ‘white elephant’ HS2 station, but who will pay for it?

The Conservative Transport Group has today warned that HS2 terminal stations could become white elephants, and parkway stations would also not justify their construction. This has been completely missed by Chancellor George Osborne who has said he wants to go back to the original plan of a complete rebuild for London Euston, which was dropped last year because it was too expensive, reigniting the unanswered question of whether or not places which get HS2 stations will have to pay towards their construction.

Back in April 2013, HS2 Ltd stated that consultants ARUP had underestimated the cost of the Euston rebuild by £500 million, and in a press release referred to the “the potential disruption caused by redevelopment that would have taken more than a decade”, but signalling a return to a proposal which will cause travel chaos, Osborne told the London Evening Standard “I’m thinking that maybe we should go for a really big re-development of Euston. Let’s face it, Euston is not one of the prettiest of the London stations. It was last redeveloped in the middle part of the last century.” Such a proposal is not included in the current Phase 1 Environmental Statement consultation, due to finish on 27th February.

Osborne was speaking at the future site of a high speed rail station in Kowloon, and despite the fact that Sir David Higgins was recently appointed to HS2 Ltd with a brief of reducing costs, he continued:

“With HS2 coming in I think there’s a real opportunity to rethink our plans. That’s something that David Higgins will have to look at. I think we should have the same level of ambition in London. There’s no reason why we can’t be taking on these great big infrastructure ideas.”

While Osborne was saying he wanted a more ambitious and expensive plan for Euston, the plan for this and other stations was being slated by the Conservative Transport Group. In a statement, the CTG said“The very ambitious scale of rebuilding Euston station, necessary to accommodate 400-metre trains, poses greater risk than building a through station”, and that other terminal stations such as those proposed for Leeds and Birmingham will run the risk of becoming white elephants due to their lack of interconnectivity, and that parkway stations such as those proposed for Toton and Meadowhall cannot be justified and should be replaced with city-centre stations. The CTG went on to state: “There are very few cases of professional railway people building parkway stations on high-speed lines and even fewer have justified being built.”, citing the Ebbsfleet high-speed rail station in Kent as an example of one that has largely failed to kick-start development of surrounding land.

The comments from the Chancellor have reignited the unanswered question of who will pay for the building of HS2 stations. Former Transport Secretary Philip Hammond was clear when he was in office that he expected places which ‘benefit’ from HS2 to help pay for stations, a year ago it was reported that Sheffield would have to pay £500m toward the Meadowhall station, and in the case of Crossrail, the majority of funding has not come from Central Government, but for a combination of the Local Authority, a levy on business rates and contributions from Transport for London. Section 7.2.12 of the latest HS2 strategic case clearly states:

There will be an uplift in land value resulting from the new line. We are considering the implications of this. Where there is a case for a contribution to the project – whether it is core project support, land, or aligned investment – we would expect those parties to contribute. Such contributions will help emphasise the importance of the project to the regional economies that will benefit from the capacity and connectivity improvements that HS2 will deliver.”

Penny Gaines, chair of Stop HS2 said

“This looks like a backdoor way of upping the budget for HS2.  When HS2 Ltd dropped the rebuild plans last Spring, they told locals that they had underestimated the cost of rebuilding Euston by £500 million, and that the rebuild would take over a decade.  Obviously George Osbourne didn’t get that memo. Or else he is laying the groundwork for more delays in the HS2 plan and another major budget increase.”

“The Euston rebuild was in the HS2 plans until they realised it would cost too much.  If it goes back in will this be another budget increase?  Or will the people of Camden be expected to cough up billions of pounds for a railway they don’t want, which will mean losses to businesses for a decade?”

“We are in the last week of the Environmental Statement consultation, which gave people a chance to look at the details of the HS2 plans so that the information could be fed into the Hybrid Bill second reading and committee stage.  A change like this to the plans at Euston could make the consultation invalid and delay the hybrid bill even further.” 

Stop HS2 Campaign Manager Joe Rukin said:

“George Osborne has gone to Kowloon and got toy envy. Once again the HS2 proposals are being changed on the back of a fag packet, and like his Chinese counterparts, the Chancellor is only interested in delivering something shiny without caring how much it will cost, if anyone will use it, or who will pay for it. The Government and local authorities really need to come clean on who will pay for these HS2 stations, as if local passenger transport executives who are already cutting back will have to cough up, along with the potential for local tax increases, Government will find the measly level of support for HS2 completely drying up.”

“HS2 is now getting attacked again from within the Conservative party because it won’t live up to its promises. They have looked at the plans and have realised very quickly that HS2 is not an integrated transport solution, it will fail to deliver on its promises, and the costs will have to go up to overcome those problems. It is time politicians wake up to the fact that HS2 is a daft idea, there are more urgent priorities facing the country, and bite the bullet and cancel this white elephant.”


4 comments to “Osborne wants to spend more on ‘white elephant’ HS2 station, but who will pay for it?”
  1. The Conservative Transport Group should be careful what they wish for. They are calling on the Government to appoint people “with commercial expertise” to sort out HS2. So let’s look at some recent appointments to bring in ‘commercial expertise’:
    • Taking the lead in the Cabinet Office on the Major Projects Authority (that will ‘drive’ HS2) is Lord Browne of Madingley who was at the top level of BP during the Texas oil refinery accident, blamed on bad management of safety and cost cutting. However he is said to have left BP because a British Court found he had lied to it.
    • Under him, Mr Cameron has appointed John Manzoni as head of the MPA who was also in a senior management post at the time of the Texas oil refinery disaster and who was “lashed in an internal BP study” and so decided to leave BP. Actually he was also ‘not encouraged to stay’ in his next post as well – Talisman Energy Inc. You can look up the ‘golden goodbye’ payment.
    • HS2 Ltd has just appointed Dr Patrick O’Connell as their Programme and Strategy boss. What commercial experience does he bring? He was Vice President and General Manager of Raytheon, and was called to answer to USA Congressional hearings about the serious problems with the IT system that Raytheon were designing for NASA at that time. He was President, Major Programmes in BT at the time it was developing what has turned out to be the NHS patient records IT fiasco described by Richard Bacon MP as ‘one of the worst scandals in terms of wasting public money of my ten years on the Committee’. O’Connell was called to answer UK Parliamentary hearings on that one. Next he worked in a senior role for CH2M Hill ‘responsible for securing major government programs worldwide’. Yes you are right – CH2M HILL now seems to have been paid £29,240,628.94 by HS2 Ltd in the period up to October 2013. Next post Dr O’Connell was President, Major Programmes at SERCO – at the time of a series of scandals including the ‘we-want-payment-for-tagging-criminals-even-when-they-have-died’.

    Perhaps the Conservative Transport Group would be wise to mull over the political ‘wash’ from these appointments before calling for more of the same?

  2. A word version can be produced from the HS2 Adobe version for use to form the approach to your EASC response. You can also use Adobe snapshot to extract a table or image from the HS2 pdf version. You have until 7th March and must use the portal upload on the EASC site.

    Not as difficult as it seems just needs a little time to work out what the issues vivid in your minds are and then apply to the section in the word document. You can also use word search to find the reference. A mini version of what you have done for the ES response but this time to the EASC remit.
    The Environmental Audit Committee inquiry will examine:
    The extent to which specific route-wide environmental impacts are adequately reflected and addressed in the Environmental Statement. Where are they not adequately reflected or addressed

    — specifically including: agriculture, forestry and soils; air quality; climate; ecology; and water resources and flood risk; and excluding Chilterns-specific matters; community and cultural heritage; landscape and visual aspect; noise/vibration; traffic and transport; and waste and material resources.

    The overarching systems and processes which will guide how environmental considerations are taken into account in the detailed routing of the track and the use of local environmental protection measures (but not examining the route itself). Where did the systems and processes fail on your community and route wide for example how did Route 3 get selected with so little knowledge and regard for the shape and geology of England.

    The arrangements for funding measures to protect biodiversity or to limit environmental impacts, and any constraints on such funding.
    How and where biodiversity offsetting will operate, and any limits that will be put on such offsetting.
    The EAC’s inquiry will not examine the overall economic case for HS2, nor decisions about the route or local environmental concerns about particular sections of the line (areas which the HS2 Hybrid Bill Committee will examine).
    The Committee will take oral evidence later, and is now inviting evidence on these specific issues by Friday 7 March, although later submissions may also be accepted.
    Evidence should be submitted through the Written Evidence portal on the inquiry page of this website.

    HS2 and the environment Inquiry announced 07 February 2014
    The Environmental Audit Committee is launching an inquiry on environmental protection in Phase-I of HS2

    Environmental Audit Committee – UK Parliament
    The Environmental Audit Committee considers how well government policies and programmes contribute to environmental protection and sustainable …
    Environmental Audit Committee – membership. Joan Walley MP … Inquiries
    Environmental Audit Committee – inquiries. Filter options …
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  3. The prospect raised by paragraph 7.2.12 of the Strategic Case, which the blog quotes in full, is intriguing. If an increase in land values due to HS2 could conceivably be seen as a reason why those benefiting should contribute to the cost of the project, then surely this would strengthen the case for full compensation to be paid to all those who suffer a loss in property value due to HS2.

  4. Perhaps now Mr Osbourne as all this money burning in his back pocket ,he can come up with a descent package for all the homes and bussenes along the route or is it just more spin .It dose seem when it suits we have no money and we all have a long way to go before we can say we are out of the mess the last government left us with .As far as the recent floods it’s nearly summer and it will go away and we can have our holidays in sunny Birmingham and we all no they have more canals than Venice

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