Once upon a time, the HS2 high-speed railway was meant to cost £34bn in its entirety. In 2012, that became £42bn. Then £56bn was the magic number in 2015. Now we’re up to £88bn and a review panel says further increases are likely. So what does the same panel recommend? Astonishingly, it says HS2 should be built anyway. Yet more money must be thrown at this over-indulged project, it seems.
The report’s conclusion, revealed by the Times, is even more remarkable when you consider how the claimed economic case has crumbled. Back in 2017, the benefit to taxpayers was put at £2.30 for every £1 spent. Now the figure is £1.30 to £1.50 and, presumably, will deteriorate further as cost estimates go higher.
It is hard to believe a hard-headed board of a commercial company would proceed in the same circumstances with a mega-project offering only marginally advantageous returns. It would ask if any cost estimate could be trusted given that eventual completion is now not due until 2040. It would look in horror at the procurement mistakes and wonder if contractors’ negotiating clout is ingrained. And it would ask if better returns could be generated by alternative schemes.
Douglas Oakervee’s committee does at least seem to have acknowledged the last point. It judged there are no “shovel ready” alternatives that could provide additional capacity and that passengers would face steep fare rises if HS2 is scrapped. That, at least, is a practical argument.
But, if the analysis is correct, what has the department of transport been doing? Has it been so dazzled by HS2 lobbyists that it hasn’t bothered to explore other ways to add capacity? The idea that HS2 must proceed, at almost any cost, because there is no plan B is desperate stuff.
One can, perhaps, raise half a cheer at the panel’s finding that, if HS2 is to be built, the full Y-shaped design is the only one worth backing. That conclusion gives the next government no scope to conjure a fudged policy that satisfies almost nobody, such as building only the line between London and Birmingham or scrapping the leg up to Leeds. Yes, we can all agree that it would be absurd to build only the southern half of HS2 if the chief beneficiary is supposed to be the north of England.
Yet, as always with this infuriating project, one wonders what other rail projects could be built with the same generous budget. Would northern mayors really be so keen on HS2 if they were offered the chance first to upgrade links between their cities? The danger with HS2’s ever-rising budget is that it sucks resources from the proposed Northern Powerhouse Rail project, for which the economic case is surely far more compelling.
Oakervee is a former chairman of HS2 so we should not be surprised that his conclusion is to keep digging and tunnelling. But he hasn’t been able to command unanimity on the committee.
Labour peer Lord Berkeley, the deputy chair, is a dissenter. He may prepare his own report to government and thinks even the reduced cost-benefit estimates are over-cooked. One can still dream, then, that we might get a proper debate about HS2 after the election.
It is needed. Nobody seriously doubts the need for more capacity but the cost-benefit case for HS2 gets worse every time the numbers are redone. If “shovel ready” alternatives are not currently available, can we at least be told how long they would take to prepare and how much cheaper they would be?
