A view of the HS2 appraisal

Today Justine Greening is meeting MPs about HS2.

She is probably aware that many people – and the MPs who represent them – are very angry about HS2. This anger is caused by the way they have been treated by the Government and HS2 Ltd since the original annoucement of the HS2 proposal in March 2011.

Independent groups have highlighted this recently.

For instance, in one document released by the Freshfield Foundation, as a briefing paper for MPs in October, they say

“Good process is important. If the government makes decisions in a disciplined and transparent way the public will in general support them and money will be find its way to the best projects. The HS2 decision‐making process has not been disciplined and transparent.”

The New Economics Foundation(nef) response to the HS2 consultation gives a detailed look at the HS2 appraisal process

The nef consultation response says (p3):

“Despite these challenges there is a robust pathway for making convincing decisions. This begins with situating a project, particularly a large, impactful one, within national and sectoral strategies. Its direct contribution and inter-linkages with other policies and investments can then be openly assessed….

“The appraisal of HS2 misses fundamental aspects of good practice, despite that good practice being laid out in HM Treasury’s guidance, The Green Book. The DfT’s cost-benefit analysis excludes all environmental and social outcomes although HM Treasury stresses their importance. By not evaluating wider impacts the DfT has in effect put their values at zero in cost-benefit terms, even though people do think these impacts are important and have value. Thus, the benefit-cost ratio, a number which carries weight with decision-makers, is based on a very narrow selection of impacts. The overall result is to over-claim benefits and understate costs, creating a strongly positive bias towards the scheme.”

Nef identify 10 limitations of the HS2 appraisal (p4):

1. Important material impacts of HS2 are excluded from the analysis
2. By separating rhetoric on objectives from the appraisal, it is not possible to test the claims that are
being made for HS2 which has implications for accountability
3. Appraisal is not rooted in stakeholder engagement
4. Evaluation of potential alternatives is incomplete
5. Time savings are over-valued and over-emphasised
6. There are significant inconsistencies with existing rail capacity and future demand figures
7. The economic case is dependent on potentially optimistic economic growth
8. The opportunity cost of HS2 investment is poorly evaluated
9. Sensitivity testing is incomplete
10. The carbon case for HS2 has not been made.

Their conclusion is (p20)

“The case for HS2 put forward by the Government is incomplete. This means there is an insufficient basis on which to take a decision on whether to proceed or not. We recommend:

• Immediate and indefinite postponement of the timetable for a decision on HS2
• Establishment of a transparent process for rethinking the case for HS2
•  Appointment of independent consultants to conduct a whole-society appraisal of the scheme alongside a plausible suite of alternatives. The appraisal should conform to HM Treasury’s Green Book, enhanced by stakeholder engagement and a clear exposition of the theory of change for each alternative scheme.

This sounds remarkedly similar to some of the questions which the Transport Select Committee say need to be answered before HS2 goes ahead:

“We have pointed to a number of areas that we believe need to be addressed by the Government in the course of progressing HS2. These include the provision of greater clarity on the policy context, the assessment of alternatives, the financial and economic case, the environmental impacts, connections to Heathrow and the justification for the particular route being proposed.”