Leaks of a government-commissioned report into HS2 suggest that the total cost of the high-speed rail network could reach £106bn. The escalating budget, from an original target of less than £33bn, has increased calls for the scheme to be scaled back or scrapped.
Is HS2 going ahead?
As part of his campaign to be Conservative leader, Boris Johnson promised to review HS2, which is particularly unpopular among Tory voters. Once installed, he commissioned an old associate and former HS2 chair, Doug Oakervee, to do a brief review of the costs and benefits, which the transport secretary, Grant Shapps, promised would be published in the autumn for a “stop or go” decision by the end of 2019. Instead, the review has been kept under wraps at the Department for Transport and, before the latest leak, was not expected to be published before February.
Why has the future of HS2 remained undecided for so long?
Phase one of the plan, from London to Birmingham, has been voted through parliament, which includes full route designs, funding and planning permission as far as Birmingham. However, legislation for the full line north to Leeds and Manchester has yet to be introduced. Some construction contracts for the first phase have also yet to be signed off. That gives a potential window to abolish the whole scheme, albeit at huge cost, because £9bn has already been spent. Meanwhile, Brexit and elections have occupied the government’s time, and former champions of the scheme within parliament have left the political scene.
Why have costs risen repeatedly?
On a basic level, some costs, such as £5bn-£7bn for the trains themselves, were not included in the initial headline £33bn figure for the project, at 2011 prices. Inflation alone accounts for about £20bn of the latest figures. Additional costs came as tunnels and refinements to protect areas such as the Chilterns were added. The cost of purchasing property and compensating homeowners along the route was vastly underestimated, according to some former HS2 employees. Executives running HS2 long said any delay would itself incur significant additional costs.
In an update last year, the chairman of HS2 Ltd, Allan Cook, said detailed surveys had uncovered more challenging ground conditions than thought, as well as additional requirements for depots and links with existing train lines. But, he admitted, original estimates were unrealistic.
What are the main options on the table?
Scrapping HS2 entirely could please some Tory MPs but would leave most political and transport leaders in the north and Midlands aghast. It would also be a huge blow to the rail and construction industry – even if, as some argue, the government could divert funds into other northern projects. Scaling it back is far easier done in the north than in the south, given the years of work already committed, but this undermines the project’s value in the very regions who back it most strongly.
Trimming the route to end at Old Oak Common in west London, rather than Euston in the centre, and reducing train speeds, would help cut the budget, but would probably mean HS2 provides less value for money.
Who is lining up on the different sides of the argument?
HS2 was originally carried through parliament with overwhelming cross-party support, but a significant number of new northern Conservative MPs are unconvinced. This perhaps reflects the outright opposition of the Brexit party and Ukip. Johnson’s key transport adviser, Andrew Gilligan, is an inveterate opponent, and Dominic Cummings has also called it a white elephant. The PM was sceptical but never outright opposed to HS2, even when, as London mayor, his family was vocal in opposition.
The metro mayors of the North and Midlands back HS2 wholeheartedly. Labour backs it but is concerned about cost and mismanagement. The Greens oppose it, with concerns over the destruction of natural habitats and the carbon footprint relative to slower trains. Most rail industry leaders consider HS2 essential and are backed by business groups and the construction sector.
