HS2 back at the Public Accounts Committee

Yesterday, HS2 Ltd were back in front of the Public Accounts Committee, who wanted to see them following a recent report by the National Audit Office.

Veteran Labour MP Austin Mitchell kicked off the inquisition, asking “How far do you evaluate grandiose projects like HS2 and HS3 against real needs now?” When he didn’t get a real answer, from Philip Rutnam, chair of the committee Margaret Hodge MP tried asking the question in a different way, asking what HS2 had taken priority over. As Rutnam, the Permanent Secretary to the DfT, just didn’t get the point, she tried again, pointing out that the DLR extension for her constituency was shelved when the Olympics came along as transport links for that project were prioritised. Rutnam then finally conceded that the decision to invest the £50bn in HS2 happened at a level ‘above him’.

When Richard Bacon MP asked why east-west links across the Pennines wasn’t looked at earlier, Rutnam said that the West Coast Mainline was clearly the greatest priority, despite the fact over 70% of all rail journeys are in London and the South East. In a subsequent answer to David Burrowes MP, Rutnam said of HS2 that there was an ‘impatience’ to get on with HS2, to undermine the rationale for that, he then admitted that deferring Crossrail by a year saved £1.1 billion, but then David Prout the Director General at HS2 Ltd said speeding ahead with spending more money more quickly, by already employing construction chiefs now with HS2 would somehow save money. However, Margaret Hodge quickly managed to establish that HS2 Ltd are already spending their contingency, which Prout blamed on petitioners against the Hybrid Bill, and said the contingency fund which stands at £14.2bn is not ‘generous’. Hodge was so convinced when Prout said the whole thing would be built for less than £50bn was “I don’t believe it”.

Nick Smith MP asked how the supposed regeneration benefits of HS2 would be delivered, given that the plan was that HS1 was meant to bring regeneration at Ebbsfleet, which it hasn’t done. Rutnam said that the Growth Taskforce came up with a ‘bundle of recommendations’ and an ‘active approach’ would be taken, but ‘announcements have not been made’. Prout had to help him out, saying the most important was ‘thorough preparation’ where stations would be built, but said that the DfT was only coughing up £2.5 million for planning around the two Birmingham stations, of which Smith said: “It feels a bit thin”.

Prout went on to proudly say that in the case of Ebbsfleet, that a bridge had been built over HS1, but it is still waiting for the roads to be built to connect with it.

There was then what seemed to be a very contentious question from Austin Mitchell, who asked how much of the HS2 rolling stock would be built in the UK. Rutnam said that this couldn’t happen due to EU rules, but when Hodge said this could be stipulated in the tender documents, Rutman said the legal advice they had had said they couldn’t, to which Bacon responded “Get another lawyer!”. This intervention saw Rutnam explain the small ways in which the DfT intends to stack the tendering process.

Mitchell then went on to say he had been disappointment that pressure from Labour members in Manchester and Leeds had seen the party support HS2, but asked if their support would hold up if it were clear that these cities would have to contribute toward the cost of HS2. This happened with Crossrail, where less than half of the funding was due to come direct from the DfT, but is now not set to happen at all with HS2, despite as the Chair pointed out, so much of the argument for HS2 is tied in with the idea it would bring economic regeneration.

Rutnam then tried to justify this by saying that there would be ‘widespread benefits’, including even Cambridge and Peterborough, to which an exasperated Hodge commented “Oh Gawd!”. The idea that Cambridge and Peterborough would benefit from HS2 is directly undermined by one of the flagship reports from HS2 Ltd, the KPMG study they were touting last year. This study was completely flawed, but did (after the data was released following an FOI request) go so far as to admit that some parts of the UK could lose economic activity as result of HS2, including:

Cambridge City & South £126.89m, Cambridgeshire East £28.84m, Cambridgeshire North & West £79.32m and Peterborough £65.63m.

Prout then claimed that HS2 would benefit 100 towns and cities with ‘released capacity’, despite the fact it has been shown that that report included many instances of double and even triple counting.

The full session can be viewed here.