Public Accounts Committee: Scaled-back HS2 ‘will not be value for money’

The public accounts committee has today published its report into the cancellation of the Northern leg of HS2, and concluded that there are “many uncertainties” in the government’s assessment that it was a good idea to complete Phase 1 of the project from (just outside) London to Birmingham, but scrap Phase 2 from Birmingham to the North of England.

Responding to the report, Lord McLoughlin, Transport for the North Chair, said the decision was a bad one not just for the North, but for the whole country: “The decision to stop HS2 at Birmingham is a missed opportunity for the North, and the country as whole,” he said. “It wasn’t just the improved North-South connectivity it would have enabled, but the extra capacity it provided, both in terms of the new high-speed line and in the space freed up on the existing network to run more services. This would have benefited passengers and freight.”

McLoughlin added that just because HS2 has gone, the needs of the North and its economy haven’t changed: “We know the North has huge economic potential, but poor connectivity is holding the region back. That requires transformational investment in our transport system, and none more so than in our railways,” he continued. “Those capacity and connectivity needs haven’t changed, and we need still need that transformational investment in pan-regional transport to support levelling up.”

If the government thought the TftN chief’s words were harsh, they probably don’t want to read the report itself. That stated explicitly that: “HS2 now offers very poor value for money to the taxpayer, and the department and HS2 Ltd do not yet know what it expects the final benefits of the programme to be.”

In case that left any doubt, the report added that the scaled-down HS2 “will not be value for money, as its total costs significantly outweigh its benefits.”

A spokesperson for the Department for Transport said: “We disagree with the committee’s assessment. Their estimated cost figure for Phase 1 also does not reflect our decision to secure private funding for Euston, or the direction not to proceed beyond the Midlands.

“The permanent secretary has already written to the committee chair setting out her assessment on value for money, and we have repeatedly made clear we will continue to deliver HS2 at the lowest reasonable cost, in a way that provides value for taxpayers.”

Prime Minister Rishi Sunak cancelled the Northern leg of HS2 in a masterstroke of timing at last October’s Conservative Party Conference in Manchester, HS2’s planned destination.

Soon after, the PM promised £3.9m of funding for new transport projects in the North, although closer investigation revealed that some of the promised projects, such as a Metrolink line to Manchester Airport had already existed for several years.

Further hilarity, mixed with genuine anger, soon followed when the government proudly launched an ad campaign in the capital suggesting that road improvements in London were a “Network North Project” funded by “rerouted HS2 funding.”