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
    -1

    Comment number 63.

    Another expensive, depressing and pointless mess our governments have got us into

  • rate this
    +2

    Comment number 62.

    short-sighted not to invest in infrastructure. Yes but which infrastructure. You cannot continue to build over green fields.

  • rate this
    -40

    Comment number 61.

    As previously stated - let's get on with it. All those who do not want it, may I suggest you stop using the M25, HS1 and the channel tunnel, the current railway systems, the tube, motorways etc. All these strategic and grand projects had extremely large opposition, but they went ahead to the benefit of all. It's not just about the money, its about the future & prosperity for us and our children

  • rate this
    +32

    Comment number 60.

    If this is a comprehensive transport strategy then it seems to be lacking a few things, like a strategy for a start. Vanity white Elephant.

  • rate this
    +1

    Comment number 59.

    Perhaps UK energy and housing investment would have a more positive effect on household budgets?

  • rate this
    -3

    Comment number 58.

    "The Coalition has announced that “this Government is committed to the establishment of a high speed rail network as part of its programme of measures to create a low carbon economy"

    Awful project and they've already started announcing losses!

  • rate this
    +73

    Comment number 57.

    Total vanity project. Another future white elephant like HS1 and M6Toll (currently going bust).
    30 mins saved on jounrey to Brum, but station will be across city from New Street (major hub station) so all benefit lost walking across for connections.
    And yes, resorting to scare stories, changing benefits & costs every five minutes does smack of desperation.
    HS B'band instead please!

  • rate this
    -3

    Comment number 56.

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

    =

    We now realise we've screwed up on this one so lets begin an exit strategy by releasing negative information on HS2

  • rate this
    -2

    Comment number 55.

    The disadvantages of not doing this haven't been highlighted all that well by the bbc, if this doesn't happen then the money would go to capital investment in existing rail lines - and that would mean mass closures of those lines on the weekends - does that sound like a better alternative? I don't think so.

  • rate this
    +2

    Comment number 54.

    @1 KM0606

    "Scotland has not even got a dual carriageway linking the north with the south, how can they justify this amount of money on something that does not involve the country as a whole??.."

    Can you ask me again in Oct/Nov next year when we'll know what the "country as a whole" means and who'll be paying for any roads in Scotland?

    TIA

  • rate this
    +269

    Comment number 53.

    £43 billion to get from Birmingham - London 30 minutes faster.
    Is it really worth it ?

    I strongly resent using my taxes on this when the rail service that the majority of us use needs major investment.

    This just goes to show the politicians like to spend our money, but not on what We need.

    No to HS2 !

  • rate this
    -1

    Comment number 52.

    I’m completely against this idea unless is meant to be a giant job creation scheme. The midlands and the north is on its backside and needs the jobs now not in 10 years time. Can anyone give me one good reason why the construction couldn’t start in all 4 cities simultaneously rather than building it from London upwards.

  • rate this
    -1

    Comment number 51.

    We need to move the express passenger service from the Victorian mainlines to create spare capacity on them for the increasing frieght burden (which may move some LGV's off the motorways).

    What was the outcome of the Chunnel Cost Benefit Analysis in the 1980s?

  • rate this
    +1

    Comment number 50.

    The cost reduction is due to the budget increase.

    What about the environmental impact, and the impact to the local economies rather than the national economy?

    The proposed HS2 route takes it right through a popular national park in Derbyshire. The impact on the park will be very detrimental.

    Once again, Westminster don't think about the locals, they just want to leave a legacy.

  • rate this
    +1

    Comment number 49.

    Cost benefit analyses can only be meaningful when applied to an economic unit, the performance of which is so small and distinct in relation to the economy as a whole that important factors can be assumed to be constant.

    The whiff of preudo-science is rather strong here, as in much used to sway public opinion.

  • rate this
    +1

    Comment number 48.

    Cancel this and the Trident replacement, increase top end income tax, pay off the deficit.

  • rate this
    +1

    Comment number 47.

    So the benefit cost ratio has gone down because the cost has raised by £10bn? How many more £bn's will the final price actually be, because you can be certain it won't come in on budget.

  • rate this
    +2

    Comment number 46.

    It's not about speed, it's about capacity, in 15 years the WCML will have no more train paths, something has to be done to increase capacity, building a new railway is cheeper than upgrading the existing 150 year old infrastructure

  • rate this
    +2

    Comment number 45.

    Why do we not have £16b for for nuclear generation but will spend £42b to benefit fewer people of the country?

  • rate this
    +2

    Comment number 44.

    Never before was so much spent, on a project that will benefit so few.

    Our politicians will not tire of this. They will insist on ramming this project down our throats until we submit, despite the costs far exceeding the benefits.

 

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