HS2 expenditure is only in the low foothills…

This was originally published as welcome to another fun-packed year in HS2 Land, part 6 on 22th January. For the rest of Peter’s series, please see his blog, HS2 and the environment.

(… continued from Welcome to another fun-packed year in HS2 Land, part 5, posted on 18 Jan 2015).

At the very end of part 5 of this series of blogs I promised some speculation on why we are still waiting for an announcement about HS2 Phase 2.

It could be as simple a matter as the reluctance of the current incumbent politicians to unnecessarily risk stirring up a hornets’ nest so close to having to beg our leave to have them continue in post by the inconvenient, to them, mechanism of a general election.

However, I have come around recently to thinking that it may be more profound than that. You see, I think that 2015 may well be the year when the costs of HS2 really come under scrutiny by the press and the public and, yes, even by some politicians.

Even in the first month of 2015 this process has been kicked off by the fairly-influential House of Commons Public Accounts Committee. On the morning that I am writing this the Committee has published a report Lessons from major rail infrastructure programmes in which it makes the fairly damming assessment that its Members are “sceptical about whether the [DfT] can deliver value for money for the taxpayer on High Speed 2” – wow!

There is also a fairly inconvenient obligation for the DfT lurking in the wings. The High Speed Rail (Preparation) Act 2013 requires the Transport Secretary to lay a financial report before Parliament every year, “as soon as is reasonably practicable after the end of the financial year to which it relates”. This report is required to include statements of expenditure on HS2, identified separately for capital and resource spending for the three distinct activities pre-construction work, acquiring property and providing compensation, and to compare these with the budgets for these activities.

I guess that the first of these reports can be expected sometime in the middle of 2015. Whilst expenditure is currently only in the low foothills of the looming HS2 money mountain, there is a strong suspicion that it is outstripping budgets and, if the report was to show this, it would surely ring alarm bells about the financial situation of the project as a whole.

A recent blog by Dr Richard Wellings, Head of Transport at the Institute of Economic Affairs, speculates on how cost overruns on HS2, which the author appears to take for granted will happen, might be “managed” by the next government. Dr Wellings is, of course, a long-time opponent of the HS2 project and confirmed that status by appearing before the House of Lords Economic Affairs Committee in November last year as a witness in a session dedicated to “leading campaigners opposed to HS2”.

So you might be right to conclude that Dr Wellings is likely to concentrate on the negatives, rather than the positives, when it comes to any analysis of the HS2 project. However, even making that allowance, what he has to say is interesting speculation and has a certain ring of truth about it.

The thrust of his argument is that we should probably expect HS2 to be “descoped” as time goes on, a process that he describes as “delivering less for the same budget”. He claims that there is some “tentative evidence” that this approach has already been adopted for HS2. Since he cites the removal of the HS1-HS2 direct link from the project scope – surgery that was, of course, carried out without any corresponding reduction in the quoted Phase 1 project budget – I would think that his evidence is somewhat more substantial than “tentative”.

Dr Wellings identifies three example areas where descoping might be exercised:

  • reducing the length of the route;
  • making greater use of existing infrastructure; and,
  • lowering the quality of the interconnections at stations.

The relevance of his blog to the delay in the Phase 2 announcement lies in his discussion of how the first of these three examples might come into play. He speculates that if plans are brought forward to extend HS2 to Crewe “it could be argued by politicians that the line more or less reached the North of England”. This he sees as a way out for the Government to cancel the extensions to Manchester and Leeds. He suggests that “northern cities could be bought off with (much cheaper) better links across the Pennines, together with improvements on the ECML”.

If he is right, that might explain why there is an inordinate delay in announcing Phase 2; the Government is still trying to keep all the options open.

As someone who lives on the HS2 Phase 1 route, I would not like to see the project descoped in this way. Phase 1 would be the last part of the project to be dropped, and the least likely to be cancelled. Removing facilities from HS2 just devalues its worth to the UK; we have already seen that with the loss of the prospect of catching direct trains from the North and the Midlands to the Continent. If my part of the country is to suffer the damage that HS2 is going to inflict, I want it to be for something worthwhile. A high-speed service that only reached Crewe, or worse still Birmingham, would deliver very little benefit and would hardly seem worth the considerable pain. It would be best, surely, just to pull the plug on the whole thing now, if there is any likelihood of Dr Wellings’ predictions coming to pass.

It’s going to be fascinating to see how all this pans out as 2015 progresses.

PS: I mentioned in part 5 of this series of blogs that when the Transport Secretary spoke in the Second Reading debate of the HS2 Phase 1 hybrid Bill he confirmed that he had commissioned HS2 Ltd to investigate ways of bringing forward the extension to Crewe. He also said at that time that this “must be an acceleration of phase 2 and not an alternative”, so I think that he was ruling out descoping the Manchester and Leeds from the HS2 project. However, things being what they are, I wouldn’t suggest that we rely on this being sufficient grounds to dismiss Dr Wellings’ speculation.

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2 comments to “HS2 expenditure is only in the low foothills…”
  1. They dropped the Wigan link only recently “because it makes no sense, now”. How can the boss get away with that sort of ‘argument’? If it makes no sense now, it never made sense.
    Going direct to Crew in Phase 1 means they can drop the Handsacre link also, a link which is known to be problematic as will be the Leeds route connection at Tamworth. They descoped their flagship Euston long ago down to rust-bucket standard. Why stop when it’s all downhill from here?

  2. Signs of dissent emerge before and during wars and after MPs have the issue of Chilcott and similar. The damage exceeds the benefits and the issues may have multiplied and mutated. Hence the Bush Blair dilema resulting in the further deterioration in the Middle East. So with HS2 the policy decision was flawed and led to rejection. The money is not the most evident reason for a growth in toxicity to MPs.

    The decision making and planning for infrastructure does not produce the political backlash of wars with injuries and deaths.

    The UK democratic process has become demoncratic and dictated by a Presidential approach of the few. The Parliamentary process has become morbund on the really important strategic areas and HS2 is being used as a lead beacon instead. Therefore the recent Parliaments have failed in three ways. To not undertake more needed projects. To continue the HS2 project with reducing support. To not have the executive powers to stop this dual failing process further holding back the development needs across the nation.

    The recent Parliament insider programmes in select committees and in the main chamber project weak controls over policy. The nation has lost its way and noneof the three parties has the calibre of management to reverse the declining ability and capacity to reverse matters beyond the tipping points. You can name national and regional and local matters not being addressed. The three party leaders lack the change leadership commitment to wake up and smell the coffee in time to address the decade of wallowing whilst the UK could not separate the most important from the interesting but not the answer. Where is tomorrow’s Prime Minister in waiting. Maybe not within the choice on offer in May 2015. Three men in a boat and not three wise men, The choice is yours to vote for a better UK. This HS2 is not the dream project for the UK. Another Select Committee bleats whilst time passes for improving this nation.

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