HS2: Predicted benefits lowered in new government report

 

Transport Secretary Patrick McLoughlin: "I hope very much it comes below budget"

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The government's latest business case for the HS2 high-speed rail link has slightly lowered the amount of benefit it predicts relative to the cost.

The expected benefit-cost ratio (BRC) has fallen from £2.50 to £2.30 in benefits for every pound spent.

That fall is mainly due to a £10bn rise in the scheme's projected £42.6bn cost, which was added earlier this year.

The report is the latest update on questions such as who benefits and by how much.

It also has revised an earlier assumption that business people do not get much work done on trains, a view that was widely criticised at the time.

The new study has cut by one-third the value put on saving an hour's worth of time getting between meetings or workplaces on a quicker train, to reflect that productive work is also done while travelling.

Closures

Analysis

When I spoke to the people who wrote this latest business case, they said things like, "We've listened" and "We haven't over-egged it".

For example, in the last four business cases, the government's been ridiculed for assuming people don't get much work done on trains. Plainly unrealistic in the world of mobile phones and laptops.

So to tackle that, they've now cut by a third the value of business time lost on a train (from £47.18 an hour to £31.96 an hour, if you're interested).

They were also heavily criticised for using a 12-year-old survey for some of their data. They've updated that.

But the reality is, the last four cases have failed to convince enough influential people, people like shadow chancellor Ed Balls for example, that HS2 is worth the money.

And no Ed Balls, no HS2.

BBC transport correspondent Richard Westcott says the new report is an attempt to shift the focus away from a controversial assumption of people not working on trains, and towards the benefits of providing lots of extra capacity on the rail network.

One part of the report, which came out a day earlier, argued that the alternative to HS2 would mean 14 years of route closures and longer journeys.

A study, prepared by Network Rail and the management consultancy Atkins for the government, said that without the project, there would have to be 2,770 weekend closures on the East Coast, West Coast and Midland main lines for the same intended capacity of HS2.

This could lead to travel times between London and Leeds doubling.

'Play politics'

Transport Secretary Patrick McLoughlin said without the new line, the West Coast, East Coast and Midland Main Lines were likely to be overwhelmed.

He said it would also bring benefits for regional and commuter services, as well as increasing the amount of freight that could be carried by rail.

But he warned it needed broad political consensus or it would end in nothing: "You can't play politics with our prosperity. The new North-South line is a multi-billion, multi-year investment in the future of Britain."

Shadow transport secretary Mary Creagh said: "We must address the capacity problems that mean thousands of commuters face cramped, miserable journeys into cities like Birmingham, Manchester, Leeds and London. But there can be no blank cheque and ministers must get a grip on costs."

Map showing the route of phases 1 & 2 of the proposed HS2 rail service

Penny Gaines from the Stop HS2 organisation said: "The big flaw in the government's argument is that phase one of HS2 won't open to the travelling public until about 2027, meaning there would be no change for passengers until the middle of the next decade.

"But building HS2 would cause years of disruption at [London] Euston, and other places on the rail network as well as chaos along the route of HS2, with roads being diverted during the build and in some places permanently shut."

Graphic showing how HS2 will reduce journey times: London-Birmingham 32 minute saving; London-Nottingham 35 minute saving; London-Sheffield 46 minute saving; London-Leeds 49 minute saving; London-Manchester 60 minute saving.
 

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  • rate this
    +15

    Comment number 43.

    Why can't we move away from very inefficient Victorian technology and...

    LEAP FORWARDS to the time when our manic obsession with excessive work travel is a thing of the past.

    Besides, there are much better ways of using this money to get better things and returns for the benefit of all.

  • rate this
    +5

    Comment number 42.

    So the government believes it will generate nearly £100bn of net benefit from this? Looks like the Ministry of Propaganda is going to have its work cut out trying to keep that lie going over the next 20 years.

  • rate this
    -16

    Comment number 41.

    Interesting the amount of ignorance around. The project is viable, set up by the previous government and will be far less of a problem in the construction than trying to restructure current lines which will have to be closed for months and cost millions to the economy, because people will not be able to travel by train in many areas. The focus is on the growth of the N E and N.W, not the S.W.

  • rate this
    -89

    Comment number 40.

    If this doesn't happen, we'll look back in 10 or 20 years time and think damn, I wish we had built a decent rail network spanning the country. This project isn't for now, it's for the future. Of course it's a lot of money, but think of the big picture. If you look at other countries with fast rail networks they are considered superior when it comes to their infrastructure.

  • rate this
    +151

    Comment number 39.

    HS2 is not needed. Spend the £42bn on making the areas that it would have reached enterprise zones so as to encourage large businesses to move there and create more jobs. Getting to Birmingham, Manchester etc. faster is not the answer. Currently Liverpool / Manchester are just over 2 hrs on the train, York 2hrs, Birmingham just over an hour. Not at all bad.

  • rate this
    +8

    Comment number 38.

    Maybe we need to focus on making the country less London centric rather than obsessing about more and more people being able to travel to London in ever quicker times.

  • rate this
    +4

    Comment number 37.

    @Sue Doughcoup How naive of you! You're correct in that we do all use transport, but we each pay our own way. Only those who use the HS2 should be paying for it and not people in place such as Gwent or Lerwick who will not benefit at all from this overpriced Tory project.

  • rate this
    +3

    Comment number 36.

    Instead of just repeatedly telling us how good this will be for the North and Midlands, please tell us in some detail EXACTLY HOW it will be good.

    At the moment I see no evidence.

  • rate this
    +5

    Comment number 35.

    Stage 1) Government chooses single massive vanity project HS2 over many smaller (and better value) projects because they think it'll generate bigger and better headlines in the press.

    Stage 2) HS2 generates terrible headlines and is criticised by almost everyone, but government doesn't want to back down and "lose face".

  • rate this
    +2

    Comment number 34.

    I think it is short-sighted not to invest in infrastructure.

  • rate this
    +4

    Comment number 33.

    Surely the best way to address the North/South divide more acutely would be to spend billions on a High Speed link for Northern England instead of focusing immediate attention on London. Wouldn't that make the north more competitive - having something London doesn't?

  • rate this
    +1

    Comment number 32.

    High time BBC explained to the nation just how these numbers are crunched , i.e. by accountant for the whim of ministers- neither of whom will be around to answer questions when the time comes on why they wer so grossly incorrect

  • rate this
    +3

    Comment number 31.

    1. KM0606
    JUST NOW
    Scotland has not even got a dual carriageway linking the north.
    Transport in Scotland is an issue devolved to the Scottish government.! Re HS2
    I don't know if it's the right move or not, we'll only know when we've done it, but at some stage we really will have to replace our Victorian infrastructure.

  • rate this
    +5

    Comment number 30.

    £40bn in patronage to hand out - thats a lot of directorships and consultancies for the boys and a lovely nest for when I leave office

    Shame privatisation destroyed the UK rail engineering industry. Still - who cares - never went to school with any engineers, all my chums are in the City!

    Oh well - trebles all round!

  • rate this
    +2

    Comment number 29.

    Oh dear. Was there a U-bend in the track design?

  • rate this
    +4

    Comment number 28.

    As a government backed project it is doomed to going way over budget, being finalised years past its original deadline and failing to deliver on any promises made with regard to economic or social benefit.
    All that and we will be fed a diet of propaganda to suggest that it was a roaring success.

  • rate this
    +169

    Comment number 27.

    You know a policy is in trouble when you have to revert to scare stories -

    14 years of rail weekend closures / disruption if HS2 isn't built !!

    Name me a time when there weren't weekend "engineering works".

  • rate this
    +2

    Comment number 26.

    It's just another vanity project which won't have enough lasting sustainable benefit to anybody - but the Government likes it so it'll go ahead.

    They've revised the benefit-cost ration down and the cost up. Well, there's a surprise. Watch the costs rise again before a turf has been turned.

    I am so sick of politicians.

  • rate this
    +5

    Comment number 25.

    Seriously, how can you be £10bn out on an initial cost projection??

  • rate this
    -91

    Comment number 24.

    HS2 may be expensive but there is a need at peak times for greater capacity between the major UK towns/cities and London (especially as demand is likely to increase in future).

    It is not possible to simply run more trains on the existing lines so the only real solution is to build new lines. This is an expensive project but will ultimately provide fast green travel and many jobs.

 

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