Friday, January 16, 2015

Is HS2 value for money ask MPs?


Doubts have been cast by MPs on whether the £50 billion HS2 high-speed rail project is good value for money for taxpayers.


The £50 billion figure includes contingency funding but this could be used to mask cost increases, said a report by the House of Commons Public Accounts Committee.


"We are sceptical about whether the Department for Transport (DfT) can deliver value for money for the taxpayer on HS2," the committee said.


The report said HS2 was one of a number of "ambitious, expensive transport infrastructure programmes" for which the DfT was responsible.


The report continued: "We are not convinced that these programme are part of a clear strategic approach to investment in the rail network.


"In particular, recent proposals for a railway connecting cities in the north of England - a possible HS3 - suggest 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.


"The department told us it will deliver the full HS2 programme within its overall funding envelope of £50 billion. However, this funding includes a generous contingency and we are concerned that, without appropriate controls, it could be used to mask cost increases."


The committee also spoke about expansion at Ebbsfleet in Kent following the building of the Channel Tunnel high-speed rail link now known as HS1.


The report said: "When it comes to the wider regeneration benefits, insufficient planning meant that regeneration benefits in Ebbsfleet did not flow from HS1 as expected.


"Although the department told us that it has learned and is applying these lessons on HS2, it needs to set out clearly who is responsible for ensuring that benefits are realised, and how that work will be co-ordinated."


Launching the report today, the committee's chairman Margaret Hodge (Lab, Barking) said: "Investment in major rail infrastructure programmes takes a long time and costs a lot of money.


"It is therefore hugely important to ask the right questions and make properly informed judgments on priorities. Yet the Government takes decisions without a clear strategic plan.


"For instance, the Government recently announced proposals for HS3. It did not carry out an assessment of HS3 before it gave the go-ahead to HS2 and it therefore did not test whether improved connectivity in the North was a greater priority.


"The department has still to publish proposals for how Scotland will benefit from HS2, including whether the route will be extended into Scotland."


She said the DfT "should set out a long-term strategy covering the next 30 years for transport infrastructure in the UK, and use this strategy to inform decisions about investment priorities and specific investment decisions".


A DfT spokesman said: "It is the role of the public accounts committee to ask questions that major projects like HS2 need to address as they move from planning to delivery.


"This scrutiny is welcome. The report sets out some of those questions in detail and acknowledges that progress is being made."


He went on: "HS2 will have a transformational effect, rebalancing the economy and helping secure the UK's future prosperity, providing high value for money to the taxpayer.


"With Sir David Higgins as chairman of HS2 Ltd, we are fully focused 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 committee, and in particular value for money."


Mick Cash, general secretary of the Rail, Maritime and Transport union, said: "The lack of strategic planning on rail infrastructure projects identified in this report comes as no surprise to us, and is yet more damning evidence of the consequences of 20 years of fragmentation since our railways were broken apart and privatised.


"From rail infrastructure projects to other major investments, like fleet replacement, Britain has been left in the slow lane through years of inertia, incompetence and profiteering."


He went on: "As a result the travelling public are left paying the highest fares in Europe to travel on over-crowded and unreliable services.


"It is no wonder 70% of the British people now support the return of our railways to public ownership and we will continue to fight for that pragmatic alternative to the current chaos."


Shadow transport secretary Michael Dugher said: "This report highlights the Government's piecemeal approach to transport investment and shows once again why we need a long-term infrastructure plan rather than a short-term politically driven approach.


"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."


He went on: "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.


"And we will continue to hold the Government to account for keeping costs down on HS2 - there can be no blank cheque."


Jim Steer, director of high-speed rail promotional body Greengauge 21, said: "The committee should be aware that it is the private sector that will design, build and operate HS2, creating a much stronger UK-based rail capability in the process."



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