HS2 ‘Oakervee’ report gets leaked again

HS2's Birmingham terminus at Curzon Street.

The Government’s report into HS2 and whether it should go ahead has been leaked for a second time.

A draft copy of the report by Douglas Oakervee was seen by The Times newspaper in November 2019 and now a later draft has been seen by the Financial Times. The Department for Transport (DfT) has stated that the final report has not yet been received – further information was requested that has yet to be incorporated into the final submission.

Without seeing the report, observers have to rely on the reports from those two newspapers.  In November, The Times stated:

The HS2 rail project should go ahead despite costs ballooning to £88 billion and a dramatic drop in the benefit to taxpayers, according to a review of the scheme seen by The Times.

The leaked document recommends that the government commit to the full high-speed rail network — the biggest infrastructure project in Europe — but admits that it is “not affordable” within the £56 billion budget set in the 2015 government spending review. The new estimate of £88 billion is likely to be revised upwards again, the report notes.

Now the Financial Times has published its interpretation of the latest leak:

The cost of Britain’s new HS2 high-speed rail project could rise to as much as £106bn, according to an official government review which gives only lukewarm backing to the project.

Douglas Oakervee.

The review, seen by the Financial Times, says there is “considerable risk” that the scheme’s price will rise as much as 20 per cent beyond the £81bn-£88bn range set out in a report by the current HS2 chairman Allan Cook last September.

The review led by Doug Oakervee, a former chairman of HS2, also recommends that work on phase 2b of the project from the West Midlands to Manchester and Leeds be paused for six months for a study into whether it could comprise a mix of conventional and high speed lines instead.

“On balance”, it says that ministers should proceed with the 250mph railway, which would stretch from London’s Euston station to Birmingham in its first phase and then to Leeds and Manchester by 2040, seven years later than the original target. But although the final draft of the review recommends that the project should proceed, this is subject to “a number of qualifications,” it says.

The two versions vary somewhat, but that could be explained by the fact that the first leak was a draft, while the second could be a later draft or might even be the final version, although the DfT denies that it is.

In both cases the recommendation is to proceed, but there are more caveats in the FT version. There is even the suggestion that the link between HS2 and the West Coast main line could be scrapped, leaving HS2 phase 1 as a stand-alone railway.

Penny Gaines, Stop HS2.

Unsurprisingly, reaction has been mixed.  Those against the project were quick to claim the leaked Oakervee report reinforced their campaign.

Penny Gaines, chair of Stop HS2, said: “Rather than tinkering with the proposals, the Government should pull the plug on the scheme and cancel HS2 in its entirety immediately.

“At the very least they should halt all HS2 enabling works immediately, pay for all the homes and businesses they have already taken and stop the huge environmental wrecking ball that it currently going on.”

The media focussed on the cost, now reported to be £106 billion – twice the Government’s own estimate of £56 billion from 2015. “HS2 costs could swell to £106bn, warns review” was the headline in the Independent, while The Sun went for: “OFF THE RAILS: Costs of high speed rail 2 to spiral by billions to eye-watering £106bn.”

On the other hand, supporters of the project urged Government to carry on regardless. Various groups issued statements supporting the project.

Andy Street, Mayor of the
West Midlands.
Andy Burnham, Mayor of
Greater Manchester.

The Midlands and the North said they wanted HS2. A joint statement was issued by Andy Burnham, Mayor of Greater Manchester; Andy Street, Mayor of the West Midlands; Cllr Judith Blake, Leader of Leeds City Council and West Yorkshire Combined Authority Transport Lead; and Cllr Kay Cutts, Leader of Nottinghamshire County Council. It said:

“We represent different political parties and we disagree about plenty. But on one point we stand in complete agreement.

“When it comes to unleashing this country’s potential, and delivering for the Midlands and the North, one priority towers above all others. Boris Johnson must get HS2 built, in full.

“HS2 has been on ice for months. Decisions postponed, money wasted as the engine runs idle waiting for the Oakervee review. It’s time to take tough decisions and get on with the job.”

Industry said it wanted it. A group of more than 40 senior business leaders in the rail sector, supported aby the High Speed Rail Group (HSRG) and the Railway Industry Association (RIA), wrote an open letter to the Prime Minister, stating: “HS2 is essential to joining up the UK and spreading prosperity throughout the country.

“Latest figures show that the project is already supporting approximately 10,000 jobs, is set to support 15,000 jobs by year end and 30,000 jobs at peak construction and train building activity, as well as 2,000 apprentices.

“Were HS2 to be cancelled, job losses would be calamitous, as would the missed opportunity to train and upskill the next generation of young people who will deliver the future infrastructure and rolling stock projects that the Government is ambitious to complete.”

The letter added another warning: “As the Government reaches its decision, it also needs to be mindful of the fact that the HS2 project is well underway. Indeed, it has been going for more than 10 years and contracts worth billions have been signed.

“The cancellation of a Government project so far progressed would be unprecedented in the history of British construction.  Should this happen, the industry will have to include additional consideration for risk when pricing for future contracts, to bear in mind the risk of the Government cancelling future projects in the middle of delivery.

“To put it as clearly as possible, future infrastructure projects will cost the Government more, should HS2 be cancelled at this stage.”

The letter concluded: “The project is essential, and irreplaceable, to the Government’s goal of fixing the north-south divide which has beset Britain for generations. We urge you to reach a final conclusion as quickly as possible. We urge you to save the jobs of 10,000 people already employed on the project. We urge you to get HS2 done.”

So both sides of the debate have seized on this newspaper report of an unpublished report, which the Department for Transport is adamant is only a draft, as ammunition to support their cases.

None of the arguments have taken up the reason why the costs have jumped – because Government itself has forced more of the railway to go below ground as the Tory activists don’t want to be able to see it. Every additional mile that HS2 is in tunnel costs more – a whole heap more.

They also don’t account for what happens if it isn’t built – the conventional railway will need major surgery to stop it grinding to a halt and that could lead to 30 years of disruption on the country’s major routes.

One thing is certain – all this speculation is counterproductive.  The Oakervee report should be published in full and debated properly so the nation can decide what it wants to do. Having leaked reports and government decisions taken in private won’t do the country any good at all.

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