The Treasury Select Committee have delivered yet another blow to HS2, with the economic case for HS2 being slated in their report on the 2013 Spending Round. The committee call for a examination of the case for HS2 by the Treasury. They say this should happen before the HS2 Hybrid Bill, and that the new case should address the concerns of a National Audit Office report published earlier this year. In addition they ask that there is a formal re-assesment of the HS2 before the Government decides to continue with the Hybrid Bill. Along side a long list of non-governmental organisations criticising HS2, Parliamentary bodies criticising HS2 include the Public Accounts Committee, National Audit Office and now the Treasury Select Committee.
Andrew Tyrie MP, chairman of the committee, said:
“There appear to be serious shortcomings in the current cost-benefit analysis for HS2. The economic case must be looked at again. The Bill should not proceed until this work has been done and the project has been formally reassessed by the Government. At £42.6bn, excluding a large contingency reserve, the construction cost of the project has increased by 17 percent even before it has started. It is a huge infrastructure project. A more convincing economic case for the project is needed. We need reassurance that it can deliver the benefits intended and that these benefits are greater than those of other transport schemes – whether in the department’s project pipeline or not – which may be foregone.”
In the section on the economic case for HS2, they report:
On 11 September 2013, HS2 Ltd published additional material on HS2. We will wish to examine whether the material published by HS2 Ltd, and any further material published by the Government, meets the following requirements:
i. The National Audit Office has highlighted a number of problems with the existing cost-benefit study that, combined with the increased cost of the project, could have a large impact on its value for money. The Treasury should not allow HS2 to proceed until it is sure the cost-benefit analysis for HS2 has been updated to address fully the concerns raised by the National Audit Office.
ii. The Treasury has based the need for HS2 upon the existence of benefits that are not captured by the existing economic appraisal. The Treasury should publicly quantify these benefits.
iii. Prior to any decision by the Treasury to proceed with HS2, it should publish its own comprehensive economic case supporting its decision.
– Once these requirements have been met, the Government should formally reassess the project before deciding whether to proceed. In the event that it does proceed, Parliament can then consider the hybrid Bill in the light of that reassessment.
In response, Stop HS2 Campaign Manager, Joe Rukin said:
“Yet again, an independent assessment of HS2 gives it the red light. The Treasury Select Committee think the case for HS2 doesn’t hold water and they are right. They are just another body in a very long list of bodies who are right, who have come at this from no other point than making sure taxpayers money isn’t wasted, and they have seen that the case for HS2 has been cooked. How many do there have to be before the Government listen? There is a reason that HS2 is so controversial, and that’s because it is a crap idea with justifications that have been bolted on afterwards to try and make this boondoggle seem like a good idea.”
“What we will have following this report is a load of proponents, who know nothing except that they have to defend HS2, saying that the West Coast Mainline is full and HS2 will heal the North-South divide, despite the fact that those arguments, and every argument for HS2 can be knocked down with a feather. The only thing keeping this whitehall elephant alive is political pride and vanity, it really should be put out of its misery before it suffers too much.”
Penny Gaines, chair of Stop HS2, said
“From the start, the economic case for HS2 has been cobbled together with back-of-the-envelop calculations by people who naturally favour rail over any other project. Before we spend £50 billion on a single project, it is vital that the reasoning behind spending such large sums of money is sound, but in the case of HS2 that reasoning is not merely unsound, but unbalanced.
As the Treasury Select Committee say, the government should re-examie the case for HS2 with a critical eye, especially given the budget has gone up by such a huge amount earlier this summer. We hope the new minister for HS2, whoever they are, approaches this project with a questioning attitude and looks at criticism from independent bodies like this with an open mind. We think that if he does he will recognise this white elephant for the vanity project that it is and say it is time to cancel HS2.”