NAO report raises all the right issues

On the scale of damning, the NAO report into HS2 is around 9 out of 10. Remember this is an organisation that pulls its punches, showing draft reports to ministers and generally avoids rocking the boat too hard, though it has improved since the disgraceful reign of Sir John Bourn who was keener on eating fat dinners with subjects of the report rather than investigating them. The report published today, however, raises all the concerns that I have been worrying about since the announcement of the scheme.

The big one is the terrible business case, which has being getting worse and worse. Now I am deeply sceptical of the methodology, but if you live by fire, you die by it. And it is the Department which chooses the methodology which has been used widely for more than a generation.

The report also picks up on the fact that there is no strategic case for the line. It was not chosen out of a variety of potential schemes that would benefit Britain, but rather hastily conceived, with no context, to deal with the perceived problem of overcrowding on the West Coast Main Line. There was no wider assessment of Britain’s transport needs, nor a proper look at the alternatives, whether rail or otherwise.

Nor does the report back up the arguments about the north south divide: ‘It is not clear how High Speed 2 will deliver the Department’s strategic objectiveof delivering and rebalancing economic growth.’ I am less concerned with the funding gap highlighted in press reports. Its such a big scheme so far in the future that detailed calculations about payments are just daft at this stage.

The NAO has focused on the key weakness of the business case, the idea that time savings are valuable to those making them and to the wider economy. That methodology has been made totally redundant by the use of laptops and mobile devices, and really needs to be completely reassessed. On Radio4 Stephanie Flanders, the BBC Economics Correspondent, made a key point. There are countless schemes which might well have a better case and ministers need to explain why these are not getting priority.

Overall, the wording makes grim reading for ministers – and indeed supporters on the other side of the political spectrum. In the measured language  of the NAO, it says ‘the Department’s strategic reasons for developing High Speed 2 are not presented well in the business case’. In other words, they are crap.

This is all far more powerful stuff than the protests in the Chilterns or indeed those that are mounting in Camden and particularly Euston, which I will be visiting next week to speak to local residents. The NAO has exposed the fact that this is, as I have written previously in The Guardian, one big punt, and the risk that it is a terrible mistake is looking ever greater.

 

  • RapidAssistant

    Despite these findings, it won’t stop the barrage of protest from people that just want a shiny new railway built for the sheer hell of it.

  • Dan

    But we all know full well that a) this is how we always do things in this country and b) Business cases for anything are usually just made up for no clear reason and with dodgy methodology

    Why stop now? What is the Business case for Trident replacement for example

    I honestly don’t think it matters that much really

    Because – if it is not spent on this it won’t be spent on anything else you or anyone else might want more. So we might as well just have this. I actually think this.

  • This whole “laptops and messaging reduces the need to business people to travel” thing is, whilst not totally a myth, rather over-exaggerated.

    I know because I’m currently typing this from the USA on a business trip to meet colleagues. Because despite all this technology, sometimes it’s still easier to travel somewhere and actually talk to people. we could talk on the phone or by HD video conferencing, or by Skype, but nothing beats actually talking face to face.

    As an aspiring politician, you know the benefits of meeting the people who may vote for you. With business it’s the same.

    Believe me, time savings are valuable. Me flying out to the West Coast of the USA means two business days lost. Whilst London to Birmingham doesn’t have the same impact, the time lost on London to Edinburgh or Glasgow does. And many of us simply can’t work on trains that tilt and turn every five seconds. Hey, on the Pendelino it’s all I can do not to have travel sickness.

  • dan

    Point well made Andrew – and after all – is it really that easy to work on a business journey (esp when many businesses now in fact get people to travel second class – not least MPs now post expenses scandal – when you have youths listening to ipods rather too loudly, other travellers bellowing into mobiles about inane (personal or business) discussions etc etc, groups of ladies who lunch going up to town for a long weekend, and a lot of chat on the way….

    How many people have you heard say ‘it’s great it takes nearly 5 hours to get to Edinburgh – I’ll be able to do a whole days work uninterrupted’ or ‘what, you really mean it’s going to take 90 minutes to get to Hastings from the City of London, excellent, I’ll get so much done’

    Doesn’t happen does it

  • Rich

    “The NAO has exposed the fact that this is, as I have written previously in The Guardian, one big punt, and the risk that it is a terrible mistake is looking ever greater.”

    And what you’ve written on your blog previously is that you think the way forward for the railways is to “muddle though”. In other words, do nothing. This is the extent of your ambitions for the railways. This is your proposal for dealing with the pressing transport issues of the day. Fantastic. An aspiring mayor whose ambition is to keep “muddling though”. Allow our competitors to carry on building far superior transport systems and scoop up all the business from the future global power-wielding economies, whilst good old Blighty shambles on, caving in to Barbour-clad nimbys who don’t give a sod about anything except the view from their back garden.

    You’re just what the country needs. A bold, fearless man of vision. A modern day Isambard Kingdom Brunel almost, powering the country forward with his innovative thinking and relentless drive. Maybe you could start your own political party called the “Let’s Just Muddle Through Until We All Die” party.

    Fret ye not about HS2. It’s still very much needed, and still very much happening. Hooray!

  • Anoop

    When the economy is in recession you must spend money wisely on things that are going to give a good return on the investment. £33 billion over 10 years would be enough to build a comprehensive cycle network in England, metro systems in all major cities and reopen much-needed local railways, all of which are known to have a high benefit:cost ratio.

  • Paul Bigland

    Christian, are you sure you’re reading the same report as the rest of us? because I’ll be damned if I can see anywhere that the report “picks up on the fact that there is no strategic case for the line”. Frankly, to claim that the report is 9 out of 10 on the damning scale is more wishful thinking than anything else.

  • Chris

    Don’t you mean the barrage of protest from people worried about their house price faling?

  • Paul Holt

    Supplemental from Stephanie Flanders: http://www.bbc.co.uk/news/business-22554668

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