Public Accounts Committee say HS1 failure could be repeated with HS2

Today (Weds 20th Jan 2016) the Public Accounts Committee have published a report into the sell-off of HS1. They state it was ‘unacceptable’ that the Department for Transport buried a report that would have undermined the case for HS2, which shows that the costs of HS1 significantly outweighed the economic benefits.

The DfT report states that even though HS1 was privatised for more than was expected, it will still represent a loss to the taxpayer of £5.9bn over 60 years. In October, the National Audit Office said the HS1 project had produced a benefit cost ratio of just 0.53, meaning for every pound spent on the project, 47p had been thrown away. The taxpayer subsidy was needed because passenger numbers through the Channel Tunnel were significantly lower than forecasts which were used to justify the construction of the project.

The report also highlights a rather concerning mentality at the Department for Transport, that the DfT refused to accept that the evaluation of HS1 conducted by the DfT using DfT methodology showed that the project, which unlike HS2 was a railway with a genuinely new route, had been poor value for money.

Chair of the committee Meg Hillier MP said:

“It is deeply concerning that work towards HS2 should have progressed without full and detailed consideration of HS1. The Government’s evaluation of HS1, produced at the urging of this Committee, could and arguably should have been a key piece of evidence in scrutinising plans for HS2. Instead it arrived two years late, since when the Government has claimed benefits arising from HS1 that cannot be measured by its own methodology. It is simply not good enough.”

Stop HS2 Campaign Manager Joe Rukin responded:

“From the start we have seen nothing but prevarication, obfuscation and delay from the Department for Transport when it comes to publishing reports on which tell the truth about projects like HS1 and HS2. Exactly the same voodoo economics methodologies which were used to invent economic benefits to justify building HS1 that have since not transpired, were used to justify building HS2, and again these benefits will simply ever appear.”

“It is simply unacceptable that MPs will be asked again to vote on HS2 whilst two years of reports from the Major Projects Authority which have rated the project as being in significant danger of failing are kept from them. We fully agree with the findings of the Public Accounts Committee and call on Government to publish all the reports relating to HS2 before the Hybrid Bill comes back to be voted on by MPs in a couple of months’ time.”

Penny Gaines Chair of Stop HS2 added:

“The report into the economics of HS1 came out in October, two years late. Meanwhile HS1 has been cited to encourage MPs and others to support HS2, at the same time as the Department for Transport were failing to find any economic benefits from building it.  At an estimated official cost to the taxpayer of £55 billion to build HS2, it is an unjustifiable project that should be scrapped as soon as possible.”

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