HS2 struggling to justify £50billion bill

For the past four years, the project to build a North-South high-speed line has looked as solid a bet as Andy Murray eventually winning Wimbledon. Despite the high cost and the protests of well-organised objectors in the Chilterns, HS2 seemed to have everything going for it.

First proposed by the Tories in opposition, the project was picked up by Lord Adonis when he was Transport Secretary and given impetus with the creation of a government company to design the line and push a Bill through Parliament. For the incoming Coalition, the project was a unifying force, since the Lib-Dems were even more enthusiastic. Even in these austere times, a cool £1 billion was allocated to work up the project.

However, while 1,500 planners are fleshing out the crude lines drawn on the map, suddenly the tide is beginning to turn. Lord Mandelson and former Chancellor Alistair Darling have both expressed doubts and while, so far, the opposition has largely been confined to time-expired politicians, there is a distinct feeling of unease about the viability of the project on both sides of the House. Even MPs who are publicly supportive often express doubts in private about the cost and nature of the scheme.

The trigger was the announcement, slipped out in a classic attempt to “bury bad news”, that the cost of the Y-shaped 330-mile line linking London with Leeds and Manchester via Birmingham had soared from £32.4 billion to £42.6 billion. With rolling stock, that means a total bill of £50 billion, all met by the public purse, since no private money has been forthcoming.

Forget the excuse that this extra money is down to contingency, as this was already included. It represents what will undoubtedly be the first of many cost rises. And the scheme faces the test of the parliamentary process, with objectors likely to force concessions on both the route and the compensation scheme.

The National Audit Office, which reported before this latest rise in projected costs, also weighed in, saying the case for the line had been “poorly articulated” (code for extremely tenuous) and that there was no clear explanation of where the promised new jobs would come from.

The fundamental problem with HS2 is that the scheme was drawn up without any detailed assessment of the need for it. Yes, trains heading north out of Euston are sometimes full but there is plenty of space left on most of them, as anyone travelling on expensive peak services can testify. Much of the overcrowding is a result of Virgin Trains’ policy of not allowing Milton Keynes commuters to use their services and of allowing off-peak travellers on cheaper tickets to travel only after 7pm. There is also far too high a proportion of first-class accommodation, making up four out of nine carriages (now 11 on some trains).

So supporters of the scheme have constantly changed their rationale. At first they stressed the environmental case — but then HS2 Ltd’s own report came up with the result that it would be, at best, carbon neutral. Moreover, there is the damage to the environment caused by construction. While the Chiltern residents have attracted most publicity, there is now a growing realisation that the damage done to a swathe of north London is being carried out with the same haughty disregard for local residents exhibited by the mid-19th century railway builders.

Despite my long-term support for investment in the railways, I have been against HS2 from the start. My opposition was strengthened by hearing from the residents of some of the 600 homes that will be destroyed in Camden. Many are in flats bought under right-to-buy and the compensation they will receive will never be enough for them to buy elsewhere.

There would, in fact, be a way of rebuilding Euston station on several levels that would enable most of these homes to be saved. However, in order to keep costs down, the most crude option has been chosen. This is typical of the hamfisted way that the scheme has been put forward.

Even more seriously for the scheme’s dwindling band of supporters, the business case has also weakened because of a huge hole in the methodology. Most of the supposed benefits come from the notion that people will save time by reaching their destination quicker. However, nowadays, people work with their laptops and mobile phones very efficiently on trains: saving half an hour on a long distance is not necessarily a real economic benefit,

In a last stand, supporters are now stressing the regenerative effects of the line and its impact on the North-South divide. Again, the argument is shaky. Academic analysis by Professor John Tomaney of University College, who looked at high-speed rail schemes in France, suggests that it has been the bigger cities, rather than the regions, which have benefited most from their construction.

The consensus over HS2 needs to be broken. It is unhealthy in a democracy that all three parties support a project that appears to offer so little for so much expenditure. There has been no proper discussion of the alternatives. For instance, the rapid roll-out of fast broadband may well lessen demand for travel.

And while the railways are a great success story and many trains are full, as Alistair Darling pointed out, it is actually commuter routes into our major cities that need the extra capacity. Yet the old Eurostar platforms at Waterloo, the country’s busiest station, still stand empty nearly four years after services transferred to St Pancras, for want of a few million in investment and a coherent plan on how to use them. Lots of other commuter lines could do with money to boost capacity.

There are many alternative ways to spend £50 billion that would prove better value for money, such as trams and more frequent bus services, than a scheme which, even on the Government’s own assessment, is at best marginal.

  • ricp

    It is becoming a bit expensive! In an ideal world the principle is right, but we could build, and in part actually rebuild the old Great Central route, for much less money, and fill a few of the gaps in the network caused by the demon butcher, Dr Beeching, and various incompetent transport Ministers. Time to think again before too much money is spent on a scheme that could end up a very large white elephant. And I’m pro-rail.

  • Fonant

    Meanwhile we have “the biggest road building programme ever” which will make long-distance driving, the biggest competition to rail travel, easier again (if you ignore the local congestion caused by the newly-created journeys).

    And cycling, a sustainable and popular (were it not for all the cars and lorries you have to deal with) mode of transport for local trips, and an ideal way to get to and from railway stations, is getting pretty-much zero investment.

    The government are their own worst enemy: if they really want rail and HS2 to be useful and used, they must stop investing in its main competition and start investing in complementary modes of transport!

  • Paul Holt

    As ricp suggests below, better to make/remake the links broken by Beeching, thus progressing towards a real rail network. One hopes that this is part of CW’s vision for transport, covering road, rail and air, that CW has yet to enunciate.

  • Dan

    “Even in these austere times, a cool £1 billion was allocated to work up the project.”

    Why was the £1bn ‘cool’ – and not, say ‘hot’. Is it like Bob Crow being a ‘baron’?

  • HarryTrainspotter

    Your wrote: “Much of the overcrowding is a result of Virgin Trains’ policy of not allowing Milton Keynes commuters to use their services and of allowing off-peak travellers on cheaper tickets to travel only after 7pm. There is also far too high a proportion of first-class accommodation, making up four out of nine carriages (now 11 on some trains).”

    Why overcrowd a train of commuters for MK for the sake of 30 mins while pax travelling further and paying far more stand?

    What’s wrong with cheaper tickets after 7pm? It’s fairly standard over most train operators. What time would you like the cheap seats to be available?

    And you overlook the fact coach K on a Pendolino only has 24 seats, so it’s a half carriage.

    The only other point I’d make is that while the rail industry is giving plenty of warning of capacity problems on the southern end of the WCML, as more houses are built around Milton Keynes etc, so more travel, no one from the aniti-HS2 lobby has put forward a credible alternative plan on how to increase capacity without building HS2.

  • Greg Tingey

    HS2 is costed as higher per unit length than an alpine base tunnel.
    Which has to be wrong.
    In other words, something AGAIN is ridiculously expensive to build here, which would be much cheaper elsewhere.
    Something is wrong, but it isn’t the HS2 idea … it’s the politicians and the “accountants” ….

  • Paul Holt