Rail 723: HS2 slammed by National Audit Office

I am writing this as dozens of Tory MPs are preparing to vote against the gay marriage bill put forward by their own government. Already Downing Street has been visited by a delegation of grassroots Conservative party activists who were prepared to go on national TV to criticise their own prime minister.

The bill, fortunately, will go through thanks to opposition MPs. Although clearly this piece of legislation has no relevance to the rail industry, I mention it because it demonstrates the power of the backbench MPs who have similar feelings about HS2 as they do about the prospect of Elton John going down the aisle. And they have just been given enough ammunition by the National Audit Office to fire at politicians for years.

The report by the NAO is one of the most damning I have read in years of paging through their documents. The NAO is known for mincing its words, taking a measured line and having gentle pops at those it is criticising. It has improved since the days of Sir John Bourn who featured regularly in Private Eye for the regularity with which he lunched with potential targets of his popgun but nevertheless it tends to moderate its findings which are shown in advance to the government department concerned.

Therefore for the NAO to use such strong language in exposing what it sees as the inadequacies of the preparation for HS2 shows that it is convinced that this is not a well-grounded scheme. The NAO was most critical of the business case which it reckons should have been far more well-developed by now. It also questioned the very need for the line, saying ‘the strategic case contains evidence of general growth in rail travel but has limited evidence on where, and by how much, increases in capacity are needed on the West Coast Main Line’.

In terms of regeneration and breaching the north south divide, the report says that ‘the Department needs to define and, if possible, quantify how High Speed 2 will meet its strategic objective to transform regional economies by delivering growth and jobs’. Indeed. That has always seemed a very vague aim, and there is considerable evidence that the effect will work the other way round, strengthening the  already booming London economy. The NAO summed up its critique by saying: ‘Our concern at this point is the lack of clarity around the Department’s objectives’.

Overall, the NAO report shows that the project has suffered throughout from the fact that it was developed in the wrong way round. Instead of a proper examination of the options to improve the rail – and indeed transport – network, HS2 was dreamt up as a solution to perceived overcrowding on the West Coast Main Line and then the project team has tried to develop good reasons to build the line. That is clearly exposed by the NAO report as is the nonsense of time savings for passengers being the key benefit delivered by the line. This supposes that every hour that is saved by travelling faster has a value (the average is £26.73 per hour) and it presupposes that time on trains is all wasted. As the Newsnight report showed, even David Cameron works on trains; that suggests the whole methodology of benefit cost analysis has to be changed.

The weakest part of the NAO criticisms is over the reported shortfall of £3bn in the period 2017/8 to 2020/21. To be so precise at this early stage is a nonsense. Of course costings and the provenance of money are tentative given that construction will not start for a further five years.  Nevertheless, there is a lot of work for the supporters of HS2 to convince MPs and the public that the project is worthwhile. The supporters of HS2 would not, if given the choice, have selected Simon Burns to defend their cause. The rail minister is clearly an accident waiting to happen which makes it odd that Patrick McLoughlin, his affable and highly competent boss, did not step forward to defend the project.

Burns has already been forced to take the train rather than the ministerial car to his office from his home in Essex after being exposed by the tabloid press and indeed first came to fame precisely because of an accident when he ran over a cyclist, injuring him badly, while driving out of the House of Commons into Parliament Square without paying sufficient attention.

Clearly more mishaps await Mr Burns. His performance on Newsnight had all the polish of a locomotive in the Barry scrapyard and he always gives the impression of being as semi-detached as the homes of most of his constituents in Chelmsford. His knowledge of the industry is tenuous as best and therefore his defence of HS2 was feeble in the extreme. He suggested that the NAO report was based on an old analysis and yet, as followers of the scheme’s progress well know, the business case has being getting worse, not better, over time. He merely said that ‘we do not accept the figures banded about or their conclusions’ because the NAO was using data that was out of date. Then, when he was questioned about the methodology used to justify the business case, he merely said it was used around the world to back up schemes. He was clearly parroting words put in front of him by civil servants – and even then not doing it properly.

It was a performance befitting of those of my football team this season (QPR for non regular readers!). As Nigel Harris keeps pointing out, the HS2 promoters need to improve on their PR and putting up Mr Burns for interview is not the answer.

But, of course, more than good PR is needed to ensure the scheme goes through. To counter the fundamental criticisms in the report, the NAO says that a much more detailed business case is needed, encapsulating the whole Y shape rather than merely the first section. Moreover, it needs to be updated and include a wide range of options, rather than the very limited one so far presented. The big question overhanging this, however, is what if even after all this work is carried out, the case still does not stack up? The case for HS2 has been fundamentally undermined by an official body. It will need a very coherent and detailed response to restore confidence in the project.

 

 

More on gates

 

I spent much of a day at Kings Cross at various meetings recently and the gates were permanently during the whole time I was there. It is clear that this is East Coast policy despite the huge cost of installing the system. Apart from the reluctance to commit the staff, there is little incentive for East Coast, which is responsible for the barriers in the main part of Kings Cross, to operate them since most of the revenue it is protecting goes to First Capital Connect. It is clear that the system is not working, which is actually a great relief to travellers loaded with luggage who can swan through the gates without delay.

Yet, despite the evidence that gates cause major inconvenience and do very little to increase revenue for Intercity operators, the Department is still insisting that it is a good idea to install further gatelines at stations serving long distance trains. In fact, the current dispute at Northern Rail over the casualisation of staff suggests that there is another agenda here, too, the deskilling and casualisation of the workforce. Northern Rail has long contracted out its ‘revenue protection’ to two private companies and the RMT is trying to prevent further casualisation.

The union is right to do so. Casual staff are less skilled, and much less committed to the railway. The train operator is breaking what should be a golden rule in business – never contract out your core function. Railtrack did that and we are still paying for the mess it created.

Ticket gates are a way that labour can be deskilled. The people staffing the gates clearly do not have the experience to deal with any problematic ticketing issues and tend to just wave such people through. The gate saga is yet another example of how the industry at times manages to make travelling on trains a less pleasant experience to go with like excessive announcements, outsourcing timetable queries to India and ticket office closures, just to name a few.

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