Everybody, supporters and opponents alike, used to agree on one point about HS2: it would be a colossal waste of money to build a fast railway that would run only between Birmingham and London.
Even in the rose-tinted world of 2012, before the project’s projected costs exploded from £33bn, the government’s economic appraisal said the whole Y-shaped design, to Manchester in the west and to Leeds on the eastern leg, would be needed to make the cost-benefit ratios work. The logic was obvious: if the chief beneficiary is supposed to be the north of England, you don’t build only the southern half.
The critical review for government by Sir Douglas Oakervee in 2020 laboured the point. It was a make-your-mind-up moment for Boris Johnson’s administration because a notice to proceed (NtP) authorising HS2 to sign construction contracts for phase one alone either had to be signed or ripped up. “In essence, NtP is a go/no go for the entire HS2 project as the review has concluded that it only makes sense to do phase one if continuing with the northern phases,” said Oakervee. The government signed and work began.
Then the cuts started, reversing the supposedly agreed thinking. Ministers amputated most of HS2’s eastern arm to Leeds in 2021. The 13-mile Golborne spur, allowing connections to the west coast mainline just south of Wigan, was axed last year. Now, as chancellor Jeremy Hunt talks about HS2’s costs “getting totally out of control”, ministers are contemplating scrapping the western Manchester limb. The grand high-speed project could, in effect, become a fast shuttle between Birmingham and London, an idea that would never have achieved standalone lift-off.
In fact, the position could be more absurd if the London Euston terminus (where construction is already paused) is also for the chop and the line would permanently end six miles away at Old Oak Common. We’d be looking at the “Acton to Aston” scheme, as the transport writer and guru Christian Wolmar has called it.
The maddening aspect, as he has also argued, is that the outside world has no real sense of how badly the numbers have deteriorated. The six-monthly reports to parliament still use 2019 base prices as if a serious bout of inflation hadn’t happened. The FT calculated this week that the official estimate of £53bn-£72bn would become £67bn-£91bn in today’s prices if one simply adjusts for the officially measured rise in construction costs over the period.
It’s not hard to imagine how the top end of the projected bill could go beyond £100bn. HS2’s ability to hammer down costs and keep contractors in line has been appalling even when it wasn’t having to manage inflation. The planning system, as we are discovering in so many other areas, is shockingly slow. And the government has veered between fiddling and taking a hands-off approach to oversight, which has been a recipe for delay and overruns.
One fears the worst because the Infrastructure and Projects Authority in July slapped a “red” rating on phase one, meaning “successful delivery of the project appears to be unachievable”. Again, though, there were no supporting numbers.
This column was always in the sceptical camp on HS2. If capacity on the railways was the problem, as HS2’s backers belatedly argued, the case for cracking on with the Northern Powerhouse Rail project was more compelling. Whatever assurances were given about ringfenced budgets, the danger was that HS2 would suck money from more urgently needed rail schemes, which seems to have happened.
What to do now? Cancellation of the Manchester leg is obviously one solution to Hunt’s “getting totally out of control” analysis. But, with the boring machines three-quarters of the way through the Chilterns, the scaling-back on specs option deserves a hearing.
A persuasive school of thought always maintained that the deep problem with HS2 was its gold-plated design. A line capable of carrying trains at 400 km/h has to be as straight as possible and requires lots of tunnels, cuttings and a track capable of taking the strain. What would be the savings from, say, a curvier 300 km/h-design?
That is an engineering question but the answer feels critical. The government’s last published cost-benefit ratio for the whole of HS2 (minus Golborne) is more than a year old and was a miserable 1.1, meaning £1 of expenditure equals £1.10 of benefits. Something, inevitably, has to give if inflation has further undermined the calculations.
Gold-plated HS2 looks dead, then, but stopping at Birmingham would be shocking for all the original reasons – plus parts of HS2 around Manchester and Crewe are critical for the Northern Powerhouse scheme. How much, even at this late stage, could be saved by switching to a bronze-plated design, as it were? If the government had been even vaguely committed to accountability on HS2 over the years, we would know already.
