Is HS2 a disaster in the making?
The UK’s newest high speed train line – HS2 – has been billed as “more than just a railway” and a “once-in-a-lifetime opportunity” to connect the big cities of England more efficiently in order to improve connectivity and boost the economy. With predicted top speeds of 250mph the line between London, Manchester and Leeds will be one of the fastest in the world.
But is HS2 all it is cracked up to be? There has been a fairly consistent chorus of doubts about the whole project from the very beginning and recently, following the latest financial disclosures, these misgivings are threatening to spill over. Indeed, much like the nuclear power station Hinkley Point C, it is looking more and more like HS2 will turn out to be a disaster at the taxpayer’s expense.
The headline news is that the project has cost the public £4.1bn before construction has even begun, leading many to wonder what on earth is going on. The standout item was the £600m spent on consultancy and advice – an eye-watering sum almost five times higher than the total cost of the more than 1,300 staff employed by HS2.
These new figures also omit two significant costs. The first is the amount awarded to construction companies for future work which is believed to be at least £6.6bn as of the time of writing. This includes significant contracts awarded to Carillion which has since collapsed, leaving those contracts lapsed. It is unknown at this stage how much money has already been released to outside companies as a result of these contracts.
The second notable omission is the cost of buying the land needed for the railway lines. Only 20% of the land needed has currently been purchased but we are still waiting to find out how much that has cost so far. The other 80% of the land needed has not been bought yet and therefore will be added onto future accounts. This is a non-negotiable cost as there will be no HS2 without the land to build it on.
The initial budget for the project was set at £52bn, but a confidential report released to the press in December 2016 questioned whether this was realistic and instead projected cost overrun of 20-60%. This report came slightly before Parliament granted the project final approval in February 2017 and posited that HS2 was “fundamentally flawed” and that “successful delivery [appeared] unachievable.”
On top of the spiralling costs, HS2 appears to have a staffing problem. A third of the board members have departed the project in the past year including the chairman and finance director. They have been joined by nearly a fifth of the general staff who have left HS2 in the financial year 2017-18 to date. Mark Thurston, chief executive of HS2, has admitted that this is “far too high”. Whilst it is unclear why all of these people are leaving, it is not a good sign and cannot bode well for the future.
All of these problems have led to the Infrastructure and Projects Authority, an arm of the Treasury, giving HS2 a ‘red/amber’ rating for the last six years in a row, meaning that they judge the project of possessing a high risk of not meeting its goals or giving value for money.
If the various reports and verdicts are correct, the final cost of HS2 could run as high as £90bn, making it one of the most expensive infrastructure projects in the world and one which cannot possibly be considered a success. This expense would qualify the project as a failure by any reasonable national or international measure and it is likely that such a huge cost will be a financial dead weight around the neck of the British public for generations to come.
Bearing all of the above in mind, slightly shorter journey times between London, Birmingham, Manchester and Leeds do not really seem worth the trouble and expense. It feels like HS2 is going off the rails at record speed.
