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'


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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  • rate this

    Comment number 625.

    I'll increase mainline capacity at a stroke. Get your old, knackered, slow-speed carriages and convert them to sleepers.

    Then get sleeper trains from Birmingham to London. Get on at 9pm, pootle down at 40mph, park up in some siding outside London, wake up at 7 am, breakfast and pull into Clapham Junction/Euston at 8am.

    Same in the reverse direction.

  • rate this

    Comment number 624.

    Well, at least they are not wasting a large chunk of our money on silly vanity projects....

  • rate this

    Comment number 623.

    The link to Southern Spain was political to get EU money that was going free. I would examine MAD-BCN or the French or German or Japanese examples for a more accurate comparison. The Japanese have found it so beneficial they are even building a maglev between Osaka and Tokyo to completely close out domestic air travel on this sector. That in my view is what we should be doing.

  • rate this

    Comment number 622.

    Will we ever learn that privatisation=higher cost to the taxpayer
    Except for BG, BP, BL, BaE, British Coal, British Shipbuilding BT
    BL, British Coal, Shipbulding & Rail were all initally nationalised when private industry failed = taxpayer bailout. BG = higher energy prices, BP/Shell fixing prices for last 10 years, BT= private monopoly.

  • rate this

    Comment number 621.

    608. ferrariman15
    As per usual ppl in this country are so short sighted. If we don't build HS2 the WCML will be overwhelmed within a decade.

    If HS2 is built then WCML will get ten times worse as it will be completely starved of investment. So the super-rich will be travelling at 250mph whist everyone else trundles through endless 5mph "track works", where three men lean on shovels.

  • rate this

    Comment number 620.

    604 "HS2 will create jobs? So will paying billions to the unemployed to dig holes in the ground" - One will create a really fast railway, whereas the latter would just leave us with loads of holes. What's your point?

    569 "all government spending is for the benefit of a select few not most of us plebs" - How paranoid do you have to be to believe this? Need some more tin foil for your hat?

  • rate this

    Comment number 619.

    Vote UKIP to stop this ridiculous vanity project.

  • rate this

    Comment number 618.

    HS2 travels from London to Birmingham non-stop. There will be no ability to get on the train at any other place, such as Watford, Coventry etc. Therefore, it will only mean more people travelling into London to get on this train, adding to the congestion in London and removing all time savings. Just update the current line. I travel from Euston to Brum every week, always get a seat.

  • rate this

    Comment number 617.

    "Transport Secretary Patrick McLoughlin rejected the report, saying the case for HS2 was "clear"."

    leading me to conclude that he must be entirely familiar with evidence made out of mud.

    Take a look at 10 years worth of evidence for the regional benefits of HS rail in Spain for starters, more anon. . .

  • rate this

    Comment number 616.

    Decrease lost working time on trains, by far more than going faster, by a business class carriage with full computing, phone and Internet access. Then these businessmen so important they need us to fork out billions to save them a few mins to spend having a coffee before a meeting can spend the whole journey working! Cost us a tiny fraction as much. Meanwhile put in universal broadband for all.

  • rate this

    Comment number 615.

    Apart from being able to get AWAY from London quicker, I really can't see good reason for HS2. Surely modern businesses use e-mail, Wi-Fi and the like to such an extent, that HS2 as a business server is really a non-starter?

  • rate this

    Comment number 614.

    Call me cynical we vote politicians to run the country and then they just do as they want take the Scottish parliment £45 million to build total cost £450 million Edinburgh trams exactly the same dont get me wrong yes progress but at a fair cost

  • rate this

    Comment number 613.

    Never understood how this is meant to make money for anyone other than train companies

    We should be moving more freight by rail, putting hubs near population centres and bringing more through the channel tunnel. At present there is DIRFT near Daventry and the M1. Put them by the M4/M5 junction, M6 near Manchester and Birmingham, M1 near Leeds etc.

  • rate this

    Comment number 612.

    The problem with cost/benefit analysis is the measurement of opportunity created by the project. It is possible to make a credible cost/benefit appraisal of the benefit gained in terms of man hours saved etc. compared with the present situation but that analysis rarely produces a positive result; that problem is remedied by including optimistic projections of the benefit derived from opportunity.

  • rate this

    Comment number 611.

    No doubt the new trains be white with elephants painted on them?

  • rate this

    Comment number 610.

    HS1 & 2 are joined just north of Euston and St Pancras via the North London Line so it will be possible to run from Scotland to mainland European destinations without changing trains.

    601.Nonie Westbourne
    It's not possible to turn the WCML in to a true HS line, too many curves and other infrastructure restrictions.

  • rate this

    Comment number 609.

    Reading an article about Grantown,Scotland being joined to Inverness by the Highland Line 100 years ago it clearly states that all the Grantown , and Aviemore, business has been diverted to Inverness with disastrous results. Surely HS2 will allow the larger London enterprises to compete even more in the Regions and win ever more business.
    Can anyone show where a Region won over the capital?

  • rate this

    Comment number 608.

    As per usual ppl in this country are so short sighted. If we don't build HS2 the WCML will be overwhelmed within a decade. Ppl already moan like crazy when there are delays, well wake up the network is so congested even a slight delay has massive knock on effects. The capacity HS2 will bring is badly needed so just build it!!

  • rate this

    Comment number 607.

    3 Hours ago
    This link is vital for bringing the north in contact with civilisation.

    If anything, more money should be invested, and the line completed much sooner


    That made me giggle.

  • rate this

    Comment number 606.

    A totally pointless waste of time and money. It will just mean that people will be able to commute into London from further away.
    The route ignores such things as areas of outstanding natural beauty, SSSI's, historic areas etc.
    But politician's egos must be fed so we will be stuck with this monstrosity.
    Any bets on how much subsidy it will require run it?


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