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.


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