Behind the Brexit Firewall, HS2 has been Trundling on at Panic Stations with Increased Costs, Incompetence, Spin and Fraud.

With the Brexit Firewall incinerating almost everything else that has the audacity to try and become news, you might be forgiven for not having noticed the much-maligned HS2 continuing to lurch from one disaster to another this year. Whilst there have been a few column inches about HS2 from stalwart journalists and the trade press, it’s only now that the level of ineptitude, deceit and subsequent the buck-passing at Crossrail has come to the fore, that HS2 is once again getting the chance to shine like the polished turd that it is.

In truly hilarious fashion, the Crossrail farce started when the Financial Times told Sir Terry Morgan that he was about to be sacked as chair of both HS2 Ltd and Crossrail. The government had reportedly been waiting for the ‘right moment’ to sack him, just like the ‘right moment’ to admit HS2 is running at over two and a half times the international benchmark was the day the Brexit deal was published.

Morgan decided that neither he nor the bad news would be buried so easily this time. Starting pantomime season early, he went onto Radio 4 to respond to the speculation he was about to be sacked with “Oh yes, I will!”, prompting retorts of “Oh no, I couldn’t possibly comment!” and eventually, “Oh yes, he has!”.

For Chris Grayling, it was an important distinction that when Morgan did go he ‘resigned’, because having to sack someone who he’d hailed as ‘world class’ when he gave him the job just five months earlier, would only reaffirm everything everyone already knew about the total incompetence of the Transport Secretary.  The reason for this ‘sacking by mutual consent’ is simple; Morgan said he would keep HS2 on time and on budget, just before he was made to carry the can for the last-minute admission that Crossrail is very late and quite a bit over budget, something which must have been clear for a very long while beforehand.

Crossrail is expected to need another massive bailout, with it being suggested it could end up £3bn – or 20% – over budget. It is also facing legal action over unpaid bills, contractors to it -and HS2- have admitted to running an illegal cartel, it was due to be open by now but is looking at least a year late, and the cost over-runs – coupled with the fact TfL had budgeted for it generating fare income in 2019 – mean pretty much every other bit of work on the Underground along with freezing fares will have to be cancelled. These are the real world binary spending choices which politicians who live in the fantasy fiction fairyland of “it’s not a case of either or” refuse to face when it comes to HS2.

Replacing Morgan at HS2 is Allan Cook, who formerly sat in the boardroom of HS2 contractors Marshalls and WS Atkins, whilst Andrew Wolstenholme, the Crossrail CEO who clearly saw none of this mess coming got a £160,000 bonus this year as well as a £97,734 pay off for ‘loss of employment’ when he moved to the obligatory job at HS2 Ltd, all on top of over half a million in basic wages. All of this is typical of the revolving-door-jobs-for-the-boys practice at HS2 Ltd that has seen an army of overpaid staff and consultants running their own gravy train for almost a decade, which previously saw Sir David Higgins become Chair of HS2 Ltd just before anyone noticed the mess he’d left at Network Rail.

It should be patently obvious to any politician with half an ounce of sense that Terry Morgan is not the problem, he’s not even a convincing scapegoat. Having these sorts of vested interest at the core of HS2, coupled with politicians showing a casual disinterest in providing genuine scrutiny is the reason why HS2 is a mess that never should have got this far.

Unfortunately the Transport Secretary is Chris Grayling, a man who when HS2 was under the cosh in September, decided to play dress up with West Midlands Mayor Andy Street, so they could pretend construction of HS2 had already started. His intention at the time was to tell increasingly emboldened Conservatives such as Leadsom, Gove, Johnson, McVey, and according to Bill Cash half the Cabinet, along with the 85% of people who think the £56bn HS2 budget would be better spent on the rest of the rail network, that it is too late to cancel HS2 because they’ve started building it. Street took just a week to destroy the concept that construction was taking place, when he launched the consultation for the design of the station they’d apparently started building.

When it was pointed out that HS2 is clearly at least three years behind the timescales presented to Parliament, the categorical response from HS2 Ltd was that it was; “wrong and misleading” to claim the HS2 Phase 1 Construction Timetable specified on the HS2 Ltd website is, or was ever, the Phase 1 construction timetable. Undeterred, HS2 Ltd doubled down claiming the project “remains on track with construction works well underway on 60 sites across the route from London to Birmingham”, before launching a national PR drive to demonstrate those 60 sites are actually archaeological digs.

This is symptomatic of how random and inconsistent the increasingly desperate messaging concerning HS2 has become. In the past HS2 Ltd have displayed a composed serenity as they’ve banged out standard rebuttals to any criticism, but the mandarins are getting increasingly jumpy and their responses decidedly techy as they are dragged out from behind the Brexit Firewall, back into the spotlight they should never have left.

When Grayling put his foot in it and said Phase 2b of HS2 might never be built, that it “still needs support if it is to definitely go to Leeds”, HS2 Ltd went nuclear. Not only did they say the story was “absolute nonsense” and that “it takes statements out of context”, but they went as to threaten a complaint to IPSO. The problem with such righteous indignation was that they’d not cared when New Civil Engineer first ran the story, as safe in their echo-chamber they hadn’t expected the predictable reaction.

That reaction included Vince Cable testing the water by tweeting with the hashtag #StopHS2, as he seemed to join an ever growing list of former Ministers in regretting previous support for HS2. This came a week after reports of growing rumblings from Northern Labour MPs, including co-chair of the Northern Powerhouse group of MPs Caroline Flint stating that HS3 should be prioritised ahead of HS2.

By the time another ‘behind schedule and over-budget’ story came along, HS2 Ltd responded with a veritably grumpy “We don’t keep a running commentary on what is the country’s biggest and most demanding infrastructure project”, demonstrating a siege mentality, the opposite of what you’d hope for from ‘the country’s biggest and most demanding infrastructure project’. That story was that £6.6bn of contracts, which were already known to be over-budget  and late because HS2 Ltd hadn’t done ground surveys, were now around £10bn and a year behind.  One survey HS2 Ltd were due to commence just last week involves drilling through an area contaminated by landfill into Londons’ water supply, without having undertaken any risk assessment of the potential environmental consequences.

The response from HS2 Ltd CEO Mark Thurston to the overspend was classic HS2 Ltd, claiming everyone knew the £6.6bn was always a guess, saying: “we always maintained that until we put contractors into play, we would not understand the true cost”, ramping up the spin with “I don’t subscribe to the idea that it is over budget”, preferring the phrase “cost gap” but insisting it “would not be appropriate” to confirm what that “gap” is. The expectation seems to be that contactors should absorb this ‘cost gap’, a dangerous strategy given they can walk partway through these two-part design and build contracts. For crisis-hit Crossrail contractor Kier, who originally won their HS2 bid in a joint venture with Carillion, this may well become their only viable option. One firm has rejected approaches to work as a subcontractor on HS2, with boss John Homer saying the business model is being “squeezed really hard” and “does not appear to work”.

It is maybe worth mentioning at this point that when Grayling first announced that £6.6bn package of contracts, he dismissed suggestions that HS2 could be late or over budget by citing Crossrail as the paragon of procurement probity, stating: “We have a good recent track record in delivering major projects on time and on budget—people have only to look at Crossrail to see that.”

What the cost of HS2 is running at now is anyone’s guess. Michael Byng, who wrote the book on estimating rail projects says HS2 would be double the £56bn official cost and four years late. Despite the fact Network Rail used his costing model on Phase One of East-West Rail, meaning it consequently became the first rail project in seemingly forever to come in on budget, Chris Grayling actually had the gall to dismiss him as “Someone who is not entirely well respected in his part of the rail industry”.  Chris Grayling. Chris Grayling said that. Chris Grayling said that about someone who is not Chris Grayling. Chris ‘Failing’ Grayling.

In face of the need to dismiss any suggestion that the costs of HS2 are out of control, the actual budgets and timescales HS2 are now working to have been classified on grounds of ‘commercial confidentiality’, which is now the go-to excuse for suppressing inconvenient truths. When the National Audit Office confirmed a  ‘petrifying overspend’ which saw Phase 1 property costs going from £1.1bn to £3.3bn, the updated estimate suddenly became ‘commercially sensitive’ against a background of more and more businesses claiming HS2 Ltd have seized their properties without payment.

Bizarrely, the NAO effectively concluded that HS2 Ltd didn’t mislead Parliament, because there wasn’t actually any requirement for their estimate of costs to be based on fact. Doug Thornton, the whistle-blower who blew the lid on this overspend was obviously sacked for having the audacity to let the truth out, and since then he has started to ask what can only be considered to be ‘the right questions’ in public via Freedom of Information request. However, despite his record of whistle-blowing and his participation in Panorama, HS2 Ltd have as yet refused to respond, insisting the requests must have been made by someone else using a false name.

Going back to compensation; with farms, it has become standard practice for HS2 Ltd to “push the limits of its powers” so it can “postpone having to shell out money for the land it will permanently acquire” according to compensation expert Sarah Beer. With businesses the modus operandi of HS2 Ltd is akin to state-ordained theft, simply to not paying out anything at all for as long as they can get away with it. Whilst the practice of delaying compensation payments is illegal, breaking the compensation code as defined by various laws, there is no specified punishment for doing this, hence the changes to the law that came into effect in April. The problem is that the HS2 Phase 1 Act predates these law changes and is therefore exempt from them. However, what HS2 Ltd and individuals within the organisation are not exempt from is the 2006 Fraud Act, Section 4 of which makes it clear that ‘Fraud by abuse of position’ can consist of simply causing someone else to endure a loss by act or omission, especially when your legal duty under the compensation code is specifically to not leave people worse off.

With that in the background, it was the announcement of the Phase 2b Environmental Statement that truly set HS2 advocates at panic stations. Meant to galvanise support, it did the opposite: The Independent came out against a ‘flawed project’; New Civil Engineer called for a ‘pause’; with a Yorkshire Post columnist concluding “You would have to be a fantasist or a politician, or possibly both, to conclude that the benefits are even close to really outweighing the consequences”. Anger in Yorkshire ballooned when it became clear a large chunk of the 19,590 jobs HS2 will displace are in Leeds, with the proposed roadworks and demolitions beyond what anyone expected. Even serial HS2 cheerleaders Manchester City Council bemoaned HS2 Ltd have not listened to them.

The brazen response strategy was to hold a parliamentary reception to “celebrate the success” of the National High Speed Rail College, after it ‘succeeded’ in defaulting on a loan due to only 96 students enrolling. Though the ‘willing-to-say-absolutely-anything-no-matter-how-clearly-made-up-it-is’ prize goes to Morgan, who once more or less claimed HS2 would end unemployment, by stating “500,000 jobs is just the beginning”.

This is the sort That’s the sort of detachment from reality that meant infrastructure czar John Armitt never guessed people might take “HS2 will need another £43bn to make it work” as a bad thing. Back in the real world, the ‘either/or’ nature of spending choices was illustrated by Leicestershire County Council; forced to spend £400,000 on HS2, they cut £400,000 worth of buses.

Unlike the recent Construction News review of “10 years of HS2” that recaps a decade of failure, pretty much everything you’ve just read has happened in the last few months, and so much had to be left out, such as HS2 Ltd mistaking Aberdeen for Buckinghamshire, or them leaving freshly planted trees to die in the heatwave. Worst is not that HS2 has been rated as in danger of failing for the sixth consecutive year, but that a leaked IPA report stated that is “poor value for money”, “fundamentally flawed”, and would already “be classified as ‘failed’ by any internationally recognised definition of project success”.

With all this in mind, it seems incomprehensible that HS2 is still being pursued: all the international evidence shows HS2 would reinforce the economic dominance of London and require a massive ongoing subsidy; HS2 Ltd themselves now admit that the temporary jobs building the line would create only just outweigh the permanent jobs it would displace; if you believe it’s a green solution, you’ve really not been paying attention; and when proponents say it is essential for capacity reasons, they simply dismiss the delayed, downgraded and cancelled projects such as the long-promised, oft-postponed, less-sexy run out of the rebranded ‘digital railway’ which Network Rail say would increase capacity across the entire rail network by 40%.

To ignore such warnings, and think that disaster can be avoided by dispensing with a chair who never warmed up his seat, is to display a psychotic level of denial. The endemic incompetence, unchecked profligacy and continual failure at HS2 Ltd can no longer be dismissed, rebranded or ignored, and hoping the truth about HS2 can be obscured forever behind the Brexit Firewall is simply delusional. With this track record, it can’t be that politicians don’t realise it’s only going to get worse, it can only be that they simply don’t care.