Senior MPs attack HS2's value for money

 

Senior MPs have accused the Department for Transport (DfT) of poor planning, regional bias and poured cold water on the prospect of HS2 providing value for money.

A new report by the Public Accounts Committee (PAC) on the lessons learned from major rail projects highlighted the concerns over HS2 and the department's efforts to maximise local benefits from the project.

Committee chair, Margaret Hodge, said: ‘We are sceptical about whether the Department can deliver value for money for the taxpayer on High Speed 2. The overall funding envelope of £50bn includes a generous contingency, and we are concerned that this will simply be used to mask cost overspends, rather than valid calls on contingency funds.’

The committee called for more transparency on how the Government will control the use of the contingency budget on HS2 – around £14bn of the £50bn earmarked for the scheme - to ensure it is not used to hide cost overruns.

The committee was also concerned that regeneration opportunities from HS2 would be missed due to the limited scale of action and resources the Government is committing to local projects - despite assurances from DfT officials that they are looking into establishing an organisation to work with local areas on this issue.

It also noted that while the ambition of regional economic growth would benefit businesses, DfT officials told the MPs that measures to reduce the burden on the general taxpayer 'such as a supplement to business rates as happened with Crossrail are not appropriate for HS2'.

Ms Hodge said: ‘The lessons from Ebbsfleet show that, without proper planning and active intervention, regeneration and the expected substantial economic benefits have not been delivered, despite High Speed 1 construction being completed seven years ago. The Government is only now putting in place an urban development corporation at Ebbsfleet to rectify this. We should not repeat these mistakes with HS2.’

MPs also highlighted once again the absence of a long-term national transport plan and called on the DfT to outline a 30-year infrastructure strategy.

Without this in place, the MPs say, the DfT has shown a lack of joined up thinking on investment priorities and ‘a narrow geographical focus’ that has seen the North left behind.

Ms Hodge said: ‘The Government recently announced proposals for High Speed 3 (HS3). It did not carry out an assessment of HS3 before it gave the go-ahead to High Speed 2 (HS2) and it therefore did not test whether improved connectivity in the North was a greater priority.’

The report adds that the proposals and planning around HS3 ‘suggests that the Department takes a piecemeal approach to its rail investment, rather than considering what would benefit the system as a whole and prioritising its investment accordingly’.

Ms Hodge concluded the DfT ‘has a long way to go to prove that it is being more effective in realising benefits from major programmes’.

Michael Dugher, Labour’s shadow transport secretary, said: ‘Labour has repeatedly called for the establishment of an independent National Infrastructure Commission to ensure we can better identify and deliver our long-term infrastructure needs, but the Government has blocked this.

‘The Government needs to maximise the benefits for the whole country from HS2 and ensure it helps to regenerate our great cities and counties, gets young people into work and helps our small businesses to grow.’

A DfT spokesman said: ‘With Sir David Higgins as chairman of HS2 Ltd, we are fully focussed on keeping costs down and are determined that this vital part of the Government’s long-term economic plan will be built on time and within budget. As the project moves forward towards construction we will continue to address the issues raised by the PAC, and in particular value for money.’

 
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