HS2: Grand design or public folly?

Whilst any attempt to divide the nation is inevitably bound to come a poor second behind Brexit, the whole furor around HS2 and its spiralling cost is giving it a good go …

On the face of it the two main arguments for HS2 are pretty straightforward: On the one hand it will speed up rail commuting times to London from much of the North; and on the other hand the massively spiralling costs make it unviable and it should be cancelled immediately.

My argument (and that of many others) is that both of these views are too simplistic, and neither actually deals with the crucially important points.

Yes, HS2 will speed up commuting times to London, though the full extent of that will depend on whether all the phases of the scheme are eventually built.  For example, Birmingham to London currently takes 1 hour 22 minutes, it is projected that will be reduced to 50 minutes. Are such savings worth a cost now estimated at £106 billion, over 3 times the original budget and likely to rise further?  Based on those two very simple cost/benefit perspectives you’d be pushed to come with an answer other than a resounding ‘no’.

The more important point around HS2 though, touted as the biggest infrastructure project in Europe, is the wider economic implications that the whole scheme will have in terms of employment and economic stimulus.  In short there are argued to be substantial benefits above and beyond the immediate travel time savings HS2 will deliver, and the benefit of these both in the short term during the construction phase (in terms of employment etc) and long-term (in terms of opening up the UK economy ) will outweigh the capital expenditure.  It is also forecast to help ease road congestion and free up capacity on regional train lines.  There are of course counter arguments such as that the money could be better spent elsewhere on road infrastructure and this will deliver a quicker result.

There is no clear-cut answer, because a project on this scale has never been undertaken before.  This is one of the reasons the cost of HS2 and other public infrastructure schemes so often seems to spiral out of control.  Schemes such as this cannot be delivered by the private sector, which would look at them from an economic viability point of view i.e do they return a suitable level of profit? That is simply not possible with public infrastructure.

Therefore it falls upon the public purse to deliver them.  Costs on a scheme such as this are almost impossible to project, which is why on many schemes the costs are so often wrong.  In respect of HS2 there have been and will continue to be increasing costs relating to groundworks, tunnelling, compulsory purchase of land and buildings to name just a few. It is most likely true that some of these have been woefully underestimated from the very start, and I do believe that some decision-makers and those in control of finances are possibly not up to the job or lack sufficient experience, and there is often a frustrating lack of transparency, accountability and explanation over such matters.

This can be seen not just on large scale projects but locally as well.  The A52 road improvements between Derby and the Wyvern has doubled in cost from £15 million to £30 million.  The responsibility of these rising costs becomes a case of pass the parcel, with no one administration prepared to accept liability.  There often appears to be a lack of accountability when it comes to such public-sector spending, buried under the oft-spouted platitude that ‘lessons will be learnt’.

Putting that mini rant to one side, there is of course always going to be a need for infrastructure spending be it on roads, rail or air.  Whilst the services using infrastructure can be delivered by private companies who look to turn a healthy profit, much of the infrastructure itself inevitably comes at public expense.  But economic growth and development cannot take place without the infrastructure itself being there in the first place.  Therefore, like it or not it will continue to be built and continue most likely to run over budget.  It will however also continue to deliver long-term often intangible results both directly and indirectly for many years after it has been completed and paid for.  For this reason, I think it is essential it goes ahead.

As one final point, many of the same concerns and objections were raised about HS1 which ultimately connects St Pancras International with the Channel Tunnel and Europe beyond. Looking back on that now, I would argue that we are far better having HS1 and the benefits it brings both for its economic and social benefits.  I think we will eventually look on HS2 with a similar point of view.