HS2 rail benefits to economy 'unclear', says National Audit Office

 

Geraldine Barker, NAO: "There needs to be more clarity about how the project will create jobs"

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The economic benefits of the HS2 high-speed rail project are unclear, the National Audit Office (NAO) has warned.

In a report, the NAO said it had "reservations" about how the planned high-speed rail link would deliver growth and jobs.

It added that the project had an estimated £3.3bn funding gap.

Labour described the report as "worrying", but Transport Secretary Patrick McLoughlin rejected the report, saying the case for HS2 was "clear".

The NAO said the Department of Transport (DfT) had "poorly articulated" its case that the rail network needed transformation and that the High Speed 2 project would generate regional economic growth.

It said the department had emphasised that HS2 would provide faster and more reliable journeys, but said the link between this and the strategic reasons for doing the project in first place, such as rebalancing regional economies, was not clear.

The NAO also estimates a £3.3bn funding gap for the controversial project which "the government has yet to decide how to fill".

'Needs more work'

Analysis

This report has certainly riled the government.

Critics are lining up to claim it as proof that there's little or no business case for spending £33bn of taxpayers' cash on a very fast train line.

And I'm not just talking about people whose homes will be affected. There are plenty of business people, economists and politicians who are against this scheme.

But ministers have come out fighting following the report's publication. They feel they've made a great deal of progress recently, announcing the full route up to Leeds and Manchester, seeing off a number of legal challenges against the project, and putting two bills into the Queen's Speech.

They keep reminding me of other schemes that had a weak business case - bits of the M25 and the Jubilee line extension, for example - schemes that the UK couldn't now live without.

There's a lot of money at stake here, and people's homes and lives too. No-one is going to catch one of these trains for another 13 years. There will be many, many more arguments before then.

A new estimate based on a clearer route and more information was likely to be higher than an earlier cost estimate of £15.4bn-£17.3bn, it said.

Meanwhile, it also warned that the government's timetable to start phase one of the project was "over-ambitious".

Speaking on the BBC's Today programme, one of the report's authors, Geraldine Barker, said the government needed to be upfront about uncertainty surrounding the costs and benefits of project.

"We think they need to do more work. [The objectives] they've stated is quite broad - we couldn't find the detail backing it."

Start Quote

If ministers had only been concerned with the economics, we would not have had the Channel Tunnel. And we probably wouldn't have the Jubilee line extension or Crossrail either”

End Quote

Margaret Hodge, chairwoman of the Public Accounts Committee, said the business case for HS2 was "clearly not up to scratch".

She said there was "virtually no evidence" to support the claims that HS2 would deliver regional economic growth, describing some of the DfT's assumptions as "just ludicrous".

"We have been told that it will deliver around 100,000 new jobs, but there is no evidence that all these jobs would not have been created anyway. The department has also set an extremely ambitious timetable for the project, with no room for mistakes."

'Strong and prosperous'

But Transport Secretary Patrick McLoughlin said he "did not accept the NAO's core conclusion".

The report depended "too much on out-of-date analysis and does not give due weight to the good progress that has been made since last year", he said.

"The case for HS2 is clear. Without it, the key rail routes connecting London, the Midlands and the North will be overwhelmed."

The Chancellor, George Osborne, insisted the benefit of HS2 to the UK "will be enormous".

But shadow transport secretary Maria Eagle said the report was a "worrying wake-up call" for the government.

"A new high-speed line between north and south is vital to tackle the rapidly advancing capacity crunch on Britain's railways, yet the NAO is damning about the Department for Transport's ability to deliver it," she said.

Rail Minister Simon Burns: "They are reaching conclusions... based a business case from 18 months ago"

Cut in journey times

HS2, which runs through Tory heartlands, has faced bitter opposition.

Stop HS2 campaign manager Joe Rukin said: "The project is out of control because the politicians involved have been seduced by the words 'high-speed rail' and have been complicit in fabricating a case for their vanity project."

He said: "The NAO say everything the Stop HS2 campaign has been saying for three years."

Last week, new legislation paving the way for development of the HS2 was announced in the Queen's Speech.

The High Speed Rail (Preparation) Bill would allow expenditure on construction and design on the HS2 project "quicker than otherwise possible".

Graphic showing the route for the new highs-peed rail network

It aims to provide Parliamentary authority for ecological surveys and other preparatory work to take place and to pay compensation to property owners along the route.

It is hoped the first trains will run on the HS2 line around 2026.

The Department for Transport says phase one will cut London to Birmingham travel to 49 minutes, from the current one hour and 24 minutes.

The HS2 phase two would virtually halve journey times between Birmingham and Manchester - to 41 minutes - and between London and Manchester from two hours and eight minutes to one hour and eight minutes.

Speeds of up to 250mph on HS2 would reduce a Birmingham to Leeds journey from two hours to 57 minutes.

 

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  • Comment number 1005.

    All this user's posts have been removed.Why?

  • rate this
    0

    Comment number 1004.

    Without doubt super highways promote expansion. They do not, however, promote prosperity between hubs. All they do is connect the affluent to each other, bypassing the have-nots. If one wants a more equal, concord society, it would be better to spend the dosh upgrading existing local hubs.

  • rate this
    +1

    Comment number 1003.

    Ironically, the benefits of HS2 are very clear but the benefits of the national audit office certainly aren't.

    You'd have to be pretty gullible to believe Palio was telling the truth, its either entirely made up or they went to the world's worst university. HS2 would benefit every taxpayer in the UK, you couldn't find a project with greater benefits to the UK and the sooner it's built the better

  • rate this
    +2

    Comment number 1002.

    It will not be a white elephant.
    Just look at the popularity of the channel tunnel rail link.
    I don't know whether it provides value for money but in principle it is surely a good thing.

  • rate this
    +1

    Comment number 1001.

    @997.CURTAINS 2012

    With the downwards tilting of the South East, that London will be washed away before Bristol.

    ++++

    Oh dear you thought I was English!!!

    I am Welsh, yet that does not mean I wish for any part of England to be washed away, perhaps when food prices become ridiculous in London because S. East Wales, Bristol etc... Get washed away you will pay attention.

  • rate this
    0

    Comment number 1000.

    998 John

    'whilst road usage has declined to the point where 25% less petrol is now sold than 5 yrs ago.'

    Taxing us off the roads is working then.

  • rate this
    0

    Comment number 999.

    995.John Jefkins
    7 Minutes ago
    CURTAINS 2012
    Whilst a faster train does use more energy, the energy PER PASSENGER is halved if the train is twice as long

    +++

    No, it isn't. Most of the weight is in the vehicles, not in the self-loading cargo. How much more power does travelling at the speed of HS2 need?

  • rate this
    +2

    Comment number 998.

    Those talking of HS2 as a white elephant need to check how many extra rail passengers there are these days. They DOUBLED in the past 15 yrs - whilst road usage has declined to the point where 25% less petrol is now sold than 5 yrs ago.

    New lines recently opened have exceeded usage expectations.

    The real white elephants may be road schemes like a 2nd Forth bridge.

  • rate this
    0

    Comment number 997.

    990.Matthew
    5 Minutes ago

    Can those of us 8+ million living in the Severn / Bristol channel area, get a few quid to protect out homes and Livelihoods from flooding due to sea level rise???




    +++

    With the downwards tilting of the South East, that London will be washed away before Bristol.

  • Comment number 996.

    All this user's posts have been removed.Why?

  • rate this
    +3

    Comment number 995.

    CURTAINS 2012
    Whilst a faster train does use more energy, the energy PER PASSENGER is halved if the train is twice as long and halved again if (by being faster) it it sells twice the seats as current trains do to Scotland. Right now 85% of people fly to Scotland. HS2 to Preston is almost enough to reduce London-Scotlnd to just over 3hrs and thus win most of that air market.

  • rate this
    -3

    Comment number 994.

    990.Matthew
    The bankers given millions in consultancy money by the Westminster spivs have in wales got lots of people to do lots of work on the subject of the barrage that would supply as much energy twice a day as a nuclear power station just up the coast for half the cost long term with out giving a french gov company guaranteed cash for 40 years and they havent paid lots of people the bankers

  • rate this
    +2

    Comment number 993.

    Make it happen, all the double checking and red tape holds this country back.

  • rate this
    0

    Comment number 992.

    989.JIMMYORSTUART
    8 Minutes ago
    988. CURTAINS 2012
    +++
    Why are you so jealous of London's Success?

    +++

    When that happens, I'll be sure to let you know.

  • rate this
    -1

    Comment number 991.

    I haven't the time to look back at all the comments but there seem to be lots about HS2 commuting. Surely the aim is to provide long distance speedy travel without being hampered by the differing requirements of commuters!

  • rate this
    +1

    Comment number 990.

    @988.CURTAINS 2012

    Can those of us 8+ million living in the Severn / Bristol channel area, get a few quid to protect out homes and Livelihoods from flooding due to sea level rise??? After all global warming is going to destroy our area??? which is a far more pressing issue that "HS2".

    We need a barrage, which by the way could produce 10% of the UK national electricity need,

    HS2 HAHA...

  • Comment number 989.

    All this user's posts have been removed.Why?

  • rate this
    +1

    Comment number 988.

    983.Matthew
    6 Minutes ago
    @976.CURTAINS 2012




    At the end of the day this whole issue demon straights that so long as the south east gets something

    +++

    Those "demon straights" represent the shortest, most economical distance.

    Instead of an aiport, London could always build more counting houses on the site of the filled-in Thames.

  • rate this
    +2

    Comment number 987.

    More public money into the banker's pockets by proxy. Take from the worker and do everything to improve the lives of the filthy rich. The Tories really are scum, they make me sick. When they are destroyed at the next election whatever government takes their place must reverse all of the ideologically driven policies of class hatred and corruption they have unleashed on our nation.

  • rate this
    +3

    Comment number 986.

    981 - I do see the bigger, it is a con. A large scale deception, which promises job opportunity but simply delivers more fun for the rich, paid for by the poor.
    We pay enough to subsidise the luxury of others, such as MPs who will no doubt be keen to enjoy this high speed elitist travel, away from the plebs.

 

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