Last week saw another low point in the sorry tale of High Speed 2. Its beleaguered chief executive made the latest in a long line of announcements that will have depressed anyone hoping the project will be completed any time soon. This time the bogeyman is construction price inflation – materials and equipment costs are ballooning in a post-Brexit, post-Covid world. As a result, the company is looking again at its procurement strategy and the prospect of extending yet further the timelines for completion.
The contrast between HS2’s status today and when it was given the green light in 2010 couldn’t be greater. With Britain basking in the afterglow of winning a thrilling race to secure the 2012 Olympics and the completion of the 186 mile per hour High Speed 1 rail link between St Pancras and Paris, the Labour government announced HS2 to much applause and fanfare: it would be a motor of regeneration and the bringing-together of Britain; it would link mainland Europe to the North of England and beyond; and a station at Heathrow would reduce the need for shorter flights, freeing up scarce slots for long-haul operations.
The transport secretary of that time, Andrew Adonis, proclaimed that the first 120 miles between London and Birmingham would cost no more than £17.4 billion (£24.6 billion in today’s money). The overall cost of the entire 335 mile “Y” shaped system linking in both Manchester and Leeds as well as Birmingham was said to be about £30 billion (£42 billion today).
Being a railway rather than a road or airport, the project managed to win backing from all sides. Conservative shadow transport minister Theresa Villiers vowed to start building it two years earlier than Labour (subject to a review of the route). The late Bob Crow, general secretary of the RMT transport union, supported it too as long as it was (of course) publicly owned and operated.
And while a few on the green side of politics were critical, rail passenger champions and the rail lobby were dead keen. Anthony Smith, chief of what was then called Passenger Focus (now Transport Focus), said it could revolutionise intercity travel as long as it was not “a bolt-on rich man’s railway.” Michael Roberts, chief of the Association of Train Operating Companies, noted that “the commitment that all three parties have shown to HSR [High Speed Rail] is a vote of confidence in the industry and will help place train travel at the heart of a successful low-carbon economy”.
Thirteen years later and a project we were promised would transform the economic geography of Britain is in deep trouble. It is a sorry tale, perhaps worthy of inclusion in both Peter Hall’s Great Planning Disasters and Anthony King and Ivor Crewe’s The Blunders of our Governments. It may well end up ranking alongside Concorde, NHS computers, nuclear power and major London road building schemes as an exemplar of how not to deliver major public infrastructure projects. Somehow, despite all the modern project management techniques, transport planning analysis and earlier political support at the government’s disposal, HS2 has been undermined by fundamental and familiar problems.
Firstly, costs have exploded. The cost of the route from London to Birmingham is now estimated to be £47.3 billion (in today’s money) and counting – more than double the original estimate in real terms. The branch to Manchester – the others have been axed or reduced – brings the latest projected overall cost up to between £62 billion and £83 billion – again as much as double the original estimates. And these prices are calculated from before much of the double-digit construction inflation that has been coursing through the industry over the last few years. Former HS2 chairman Sir Terry Morgan told a House of Lords committee “nobody knows” what the final costs will be.
Secondly, HS2’s performance is being “descoped” and, as already noted, the route cut back. Very high speed rail has major cost and engineering impacts on the track alignment, technical specifications for the bridges, tunnels and track, and for power and signalling equipment, as well as the trains themselves. Originally specified to run at 248 mph – arguably an absurd speed for an island that is 600 miles from top to toe – this has been brought down to 224 mph.
Further downgrades are being floated. Frequencies too are under review. Originally specified to run with 18 trains an hour, few would be surprised if the government reduced this to ten. And a scheme that by some estimates might end up costing the taxpayer £100 billion no longer includes the righthand branch of the “Y” to Leeds, which was lopped off last summer. No longer does it buy a connection to HS1 or Heathrow airport. The solution for Euston, which involves adding something alongside the existing station, threatens to be an architectural disappointment.
Thirdly, there is a big question over how much demand there will be for the railway. Some might (rightly) say the death of commuting and office-based work has been exaggerated, but the truth is that the economic case for HS2 was not great even before Brexit and Covid. And since then, much of the demand projected has evaporated. Professor Stephen Glaister, a leading transport expert and former chair of the Office of Rail and Road, damned the line with faint praise, saying the case for HS2 was “at best weak”. Many thought improvements to the West Coast mainline would make more sense (although previous attempts to upgrade it ran years late and over budget too).
Like it or loathe it, one thing everyone can probably agree about today is that HS2 is now in the worst possible place. Relentless downgrading means that the long term benefits – modest as they were – are diminished further. There is no sign that costs are anywhere near certain or under control. And the project is casting an ever-greater shadow over public expenditure. HS2’s “burn rate” means it is slated to consume more cash per annum than the Department for Transport’s renewals programme for the national road network or Network Rail’s entire capital programme on an annualised basis. It is at risk of dominating national transport budgets for years to come, taking down dozens of better value, more modest projects in the process.
As politicians and civil servants fret over what to do, swathes of Camden, Birmingham and leafier areas have been razed to the ground and turned into unending construction sites. (We are promised seven years of disruption to the Euston Road for utility works alone). Had demolition and environmental damage on this scale been undertaken for building a motorway, those who side with more sustainable modes of transport would have perhaps rightly been outraged. But somehow, because it is a railway, the price for many usually green advocates is one worth paying.
How we have ended up in this state of affairs will no doubt be for academics and committees of inquiry to judge. Right now there is a pressing need to work out what should be done to make the best of a bad job. This might require radical, painful choices to be made by government.
One option would be for the government to be frank about the version of HS2 it is truly prepared to pay for, with a nailed down budget, route and timeline. It would then convene the Mayors of London, Greater Manchester and the West Midlands and leaders of other areas affected by HS2.
The government would provide them with a choice: to opt for the scheme as proposed or to come up with alternative projects. They might recommend cancellation of the project in its entirety or perhaps a scaled back version. A lower cost rail link between London and Birmingham could perhaps make use of bits of HS2 already being built. Whatever the decision, the resources released would then be committed to their regional transport priorities.
This approach provides everyone with a clear choice between continuing with HS2 or releasing investment for trams, buses, regional rail and metros, which we know are far more effective at driving local economic growth and employment. England’s major cities, especially outside of the south east, would at last get the sorts of resources they really need to deliver growth – and in doing so relieve the government of yet another major political headache.
In a world in which HS2 has increasingly few friends, not only would such alternatives provide better value for money, they might prove more popular with the public too. The government is in a terrible bind over HS2. The choices it faces are highly unattractive. But this bullet train needs biting now, before it runs away any further.
Alexander Jan is an economist and independent commentator. Follow him on Twitter.
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