Britain’s HS2 project is the subject of damning report from parliament

source: HS2 source: HS2

HS2 is now very poor value for money, says an all-party report. The Public Accounts Committee has been examining the economic viability of the high-speed railway, now that it has been reduced to a shuttle between west London and central Birmingham. The report, published on 7 February, says that the cancellation of the Northern leg between Birmingham and Manchester has left the project unable to justify its cost.

The Committee has called on the UK Government to answer the questions its report has raised. The PAC wants to understand how the Government proposes to make HS2 pay its way in the light of the cancelled routes to Manchester, and the eastern leg to Nottingham, Sheffield and Leeds. Those answers from the Government are required, by law, within two months.

A decade of scrutiny raising concerns

The High Speed 2 (HS2) programme will run only from London Old Oak Common to the West Midlands, with a stop at Solihull Interchange and a terminus at Birmingham Curzon Street – originally designated Phase 1 of the project. However, after the cancellation of its latter stages to Leeds, Manchester, and a direct connection to the West Coast Main Line at Crewe, it will offer very poor value for money for the taxpayer. In a report published today, the Public Accounts Committee (PAC) offers its verdict on both the high-speed rail programme and Euston station – the ‘paused’ project to bring the railway to central London.

A visualisation over the sculpted wetlands outside the HS2 Old Oak Common station in West London
A visualisation over the sculpted wetlands outside the HS2 Old Oak Common station in West London – which is set to be the interim terminus of the line from Birmingham

The PAC’s report is the latest addition to over a decade of scrutiny raising concerns around the management of HS2. The report calls for answers from the Government to questions raised by the decision to cancel HS2 Phase 2 – which would have seen the route to Manchester completed. The committee has expressed concern over failures of governance and oversight over spiralling costs following years of warnings. The report comes only days after work began on the Birmingham Curzon Street terminus for the project.

Phase 1 will not be value for money

“This Committee has been reporting its concerns on how High Speed 2 (HS2) has been managed for over a decade, but recent events have left us more concerned about the HS2 programme than ever before”, says a statement from the committee. “Operating just Phase 1, from London to the West Midlands, will achieve poor value for money for the taxpayer. The Department for Transport acknowledged [this] to us. The Department told us it was still better to complete Phase 1, given the approximately eleven billion pounds (12.5 billion euro) of remediation costs (in 2019 prices) that would be incurred if they cancelled the whole programme.”

Bodies like the Public Accounts Committee exist to question the Government on the delivery of policy and projects. There are currently sixteen members – all of them elected members of the parliament – sitting. In answer to earlier examinations, the UK Government has accepted that delivering only Phase 1 will not be value for money. They agree that its total costs significantly outweigh its benefits. However, the Government’s Department for Transport (DfT) told the Committee it was still better to complete Phase 1.

Taxpayers and property owners short-changed

Despite the defence mounted by the DfT, the Committee says their calculations are made by excluding the 23 billion pounds (27 billion euro) spent to date on HS2, and including as a benefit of the project avoiding approximately eleven billion pounds (12.5 billion euro) of remediation costs from cancelling entirely. The PAC has been left with little assurance over the calculations, and calls for a clear summation of the benefits of Phase 1 between London and Birmingham.

HS2 Curzon 3 viaduct in Birmingham
HS2 building work is underway. The first pier of the Curzon 3 viaduct with the Birmingham skyline in the background.

The report raises questions as to the many as-yet-unknown ramifications of the decision to cancel HS2’s Northern leg, says the Committee. “These range from how land and property now no longer needed will be disposed of, taking into account the needs of the taxpayer, local interests and fairness to those who have had their properties compulsorily purchased”, they say. There are also questions over the impacts on other rail projects dependent on the cancelled phases. The Committee remains unclear as to what will be delivered with redirected spending – which the Government claims will be 36 billion pounds (42 billion euros).

Concerns over costs, speeds and Euston

There is now significant concern over the way the high-speed trains will interface with the existing network. The Committee has queried how trains designed for the brand-new network will cope with the twists and turns and clearance of lines upon which they were not originally intended to traverse. “Crucially, the Department does not yet understand how HS2 will operate as a functioning railway following recent changes”, says their report. “[Trains] which will likely run slower than existing trains on tracks not designed for their speed. As repeatedly highlighted by the PAC, cost overruns and delays have been a constant problem throughout the whole HS2 project.”

Poor cost management indicates a failure of governance and oversight at both HS2 Ltd and DfT, and the report calls for answers within six months as to how these issues will now be brought under acceptable and properly accountable control. The report warns there are also urgent decisions to be made on funding the development of HS2 Euston, which is dependent on attracting private finance to pay for it. The Government has no plan yet on how to make this happen, and the PAC is highly sceptical that investment can be attracted of the scale and speed required to make Euston a success.

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Author: Simon Walton

Simon Walton is UK correspondent for RailTech.com and Railfreight.com

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