HS2 ‘Stocktake’ report to government raises storm

HS2's Birmingham terminus at Curzon Street.

In a written statement to Parliament, Secretary of State for Transport Grant Shapps revisited his earlier announcement of an independent review of HS2, led by Douglas Oakervee, which is due to report in the autumn.

He then continued: “The recently appointed Chairman of HS2 Ltd, Allan Cook, provided his advice to me on the cost and deliverability of the current scheme shortly after my appointment as Transport Secretary – and I want the House to have the full details at the earliest opportunity. I am determined to set out everything that is currently known, so I have today placed a copy of the advice in the libraries of both Houses. This has only been redacted where commercially necessary, and the Oakervee Review panel will of course see the report in full.

Grant Shapps,
Secretary of State for Transport.

“Colleagues will see that the Chairman of HS2 does not believe that the current scheme design can be delivered within the budget of £55.7 billion, set in 2015 prices. Instead he estimates that the current scheme requires a total budget – including contingency – in the range of £72 to £78 billion, again in 2015 prices.

“Regarding schedule, the Chairman does not believe the current schedule of 2026 for initial services on Phase One is realistic. In line with lessons from other major transport infrastructure projects, his advice proposes a range of dates for the start of service. He recommends 2028 to 2031 for Phase One – with a staged opening, starting with initial services between London Old Oak Common and Birmingham Curzon Street, followed by services to and from London Euston later. He expects Phase 2b, the full high-speed line to Manchester and Leeds, to open between 2035 and 2040.”

Grant Shapps was appointed Transport Secretary on 24 July 2019. Allan Cook’s ‘Stocktake’ report is simply dated August, so it could predate the announcement of the Oakervee Review.  It’s certainly not fresh information.

HS2 Chairman’s Stocktake

In his report, Allan Cook clearly states: “HS2 remains the right strategic answer to join up Britain more effectively to meet the transport needs of the 21st century. It is a key enabler for the national Industrial Strategy and the individual growth strategies being developed by each region and major cities in the country.”

Allan Cook, HS2.

Talking of the original plans and budget for HS2, he continues: “The original plans did not take sufficient account of the compound effect of building a high-speed line through a more densely populated country with more difficult topography than elsewhere – and doing so whilst complying with higher environmental standards.

“Equally, the existing cost/benefit model, which was designed for smaller scale schemes, has proved inadequate in capturing the full transformational effect of HS2, particularly on changing land values. This transformation is already being demonstrated in Birmingham.

“Therefore, the budget and target schedule for the programme have proved unrealistic, while at the same time the benefits have been understated.”

He then comments specifically on Phase One, the route for London to Birmingham. “Phase One from Birmingham to London is already under way and should be completed as planned. HS2 conducts its business as a cost-conscious organisation with value for money playing a huge factor in decision-making.

“Though much work has been done to date to drive down costs through independent reviews and pilot studies, the cost is likely to rise from £27 billion to a range of £36 to £38 billion; and the target delivery date of December 2026 should become a more realistic, manageable and cost effective staged opening between 2028 and 2031.”

He completes his report by making comments on the other phases of the project.

Grant Shapps was clear that this was information that he was lodging with Parliament to help MPs understand the current status if HS2. He continued: “This update is intended to provide colleagues with the information they require about the current status of the HS2 programme. An independent review is now underway to give us the facts about the costs of the HS2 project. I want to be clear with colleagues that there is no future for a project like this without being transparent and open, so we will be candid when challenges emerge.

“Therefore, as soon as I have a clear sense of the costs and benefits from Doug Oakervee’s review I will update the House.”

Reaction

This announcement was immediately seized on by the sensationalist press, who neither mentioned that it was a report from a few weeks earlier nor worried that it was an update for Government and not a policy statement.

The BBC headline was “HS2 railway to be delayed by up to five years”. The Independent went further: “HS2: Landmark rail project facing seven-year delay as costs spiral, company admits.” The seven years refers to the final completion date of Phase Two to Leeds and Manchester.

The Sun couldn’t resist having a dig. “HIGH SPEED FAIL HS2 boss blames seven-year delay on Britain being bigger than expected,” was its headline, a reference to Allan Cook’s comment: “The original plans did not take sufficient account of the compound effect of building a high-speed line through a more densely populated country with more difficult topography than elsewhere – and doing so whilst complying with higher environmental standards.”

Reacting to this negative press, others added to the debate. Manuel Cortes of the TSSA union said: “There is no good reason for delaying on HS2. Ministers should be told flatly – No Way! 

Manuel Cortes, TSSA.

“A delay will simply set back our economy and hamper the much needed clean and green evolution of our transport infrastructure.  Our northern cities and the wider economy just can’t afford to wait. They are crying out for the boost HS2 will give to regional economies. 

“Let’s be under no illusions – high-speed rail has been up and running in other European countries for decades. Why is it we lack so much ambition? We must say No Way to delay!  

“To be honest the Tory Government needs to put the national interest first and get on with HS2, instead of trying to bury the bad news of delay amid the turmoil of Brexit.”

Cool heads

All of which seems to be based on the unfounded view that Allan Cook’s update on his views had suddenly become Government policy.

So, let’s wait and see what Douglas Oakervee reports. There is a pressing need for the extra rail capacity that HS2 will bring, not to mention its importance to both the construction industry and the country at large.

It is quite right that everything should be transparent, and after the disappointing delays on Crossrail the industry needs to get its costs and its delivery dates right.

It’s time for cool heads and patience.

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