Ministers have known the business case for HS2 does not stack up for nearly two years, sources claim – prompting anger as critics say the project will not deliver its promised boost
- Critics have claimed the HS2 project will not deliver its promised boost
Ministers have known for nearly two years that the business case for much of HS2 does not stack up, it was claimed yesterday.
Sources involved with the beleaguered project said officials were aware in the winter of 2021 that they would get as little as 90p of benefit for each pound of public money spent.
Critics said it meant ministers have squandered the opportunity to potentially save billions. The Government is considering axing another major part of the scheme to save money, with a possible announcement this week.
But Greater Manchester’s Labour mayor Andy Burnham appealed to Rishi Sunak not to axe the project entirely, even if it has to be delayed.
He said scrapping the northern leg from Birmingham to Manchester would create a ‘North-South chasm’, adding: ‘It would leave the North of England with Victorian infrastructure, probably for the rest of this century.’ Former chancellor George Osborne and former deputy prime minister Lord Heseltine said scrapping the Manchester leg would be a ‘gross act of vandalism’ that would be seen as a sign the Government was ‘abandoning’ the North.
Ministers have known for nearly two years that the business case for much of HS2 does not stack up, it was claimed yesterday
Sources confirmed that the business case for Phase One of HS2, which connects London and Birmingham, fell to around 90p of benefit per pound spent in November 2021. At the time, the business case for the entire London to Manchester route remained positive. But it had fallen to £1.10 of benefit for each pound spent by May this year.
The business case for the Crewe to Manchester leg, which ministers are now considering scrapping, has fallen to about 70p per pound spent.
Officials last night insisted that the figures did not include ‘dynamic wider economic impacts’.
Tory MP Greg Smith, who sits on the Commons transport committee, said the 2021 warning should have rung alarm bells more widely. Instead, more than £9billion has been ploughed into the project since then. He said: ‘They’ve thrown away billions that could have been saved. I’ve been saying consistently and relentlessly that this project is not affordable and isn’t going to deliver any value for the British public.
‘It’s therefore no surprise to me that ministers have known about some of these figures for some time. This project is nuts and a complete waste of money.
‘It’s something we didn’t need before the Covid-19 pandemic and definitely don’t need now with many still working from home. It’s also unjustifiable with the human misery it has caused, with constituencies including mine turned into building sites. It’s bonkers, totally mad.’
It comes as Mr Sunak weighs up whether to axe the Birmingham to Manchester leg of HS2. This consists of Phase 2a, which links Birmingham with Crewe, and Phase 2b, which takes it to Manchester.
Delaying its construction by up to seven years is another option being considered, The Independent reported. This could mean trains not running to Manchester until the late 2040s.
Also being weighed up is whether HS2 trains should run into London Euston or stop six miles away at Old Oak Common. Mr Sunak yesterday refused to comment on reports that he plans to scrap the Birmingham to Manchester leg and stop short of central London.
READ MORE: Drone footage of HS2 construction work tearing across England’s countryside reveals just how much work is left to be done with northern section of high speed rail line ‘set to be scrapped in days’
Speaking during a visit to a community centre in Broxbourne, Hertfordshire, the PM said: ‘What I would say is we’re absolutely committed to levelling up and spreading opportunity around the country, not just in the North but in the Midlands, in all other regions of our fantastic country.’ Paul Johnson, of the Institute for Fiscal Studies, said successive governments had signed off on the grandiose project despite knowing it was going to be ‘hugely expensive, with relatively little gain’.
He said: ‘It rather looks like we’re going to totally waste the money on this in producing a rail line at the cost of tens of billions, which will get you from Birmingham to central London less quickly than you can do at the moment.’
He told Times Radio: ‘This whole thing, it just makes me want to weep. It just makes me despair. I mean, the original sin, as it were, was agreeing to do it in the first place. It was obviously going to be hugely expensive, with relatively little gain from it relative to pretty much anything else you could have done with the railway or transport system. We also know how difficult we find it to build these projects. I just wish it had never happened in the first place.’
Chancellor Jeremy Hunt warned last week that spending was ‘totally out of control’, with some insiders believing it is on course to top £100billion when it is adjusted for inflation. This is despite a 2021 decision to scrap the eastern leg from Birmingham to Leeds, saving tens of billions of pounds. Ministers believe curtailing the project further could save as much as £35billion.
But this has triggered a huge backlash, prompting speculation that Mr Sunak may decide to delay the Manchester leg rather than scrap it altogether.
Boris Johnson warned at the weekend that it would be ‘insanity’ to ‘mutilate’ the project, which was a central plank in the Government’s levelling-up strategy.
Ministers are under pressure from some Tory MPs to resolve the issue before activists arrive in Manchester this weekend for the start of the Conservative Party conference.
Downing Street yesterday said there was ‘precedent’ for imposing delays to control costs but declined to say when the PM would decide on the project’s future. A Government spokesman said: ‘The HS2 project is already well under way with spades in the ground, and our focus remains on delivering it.’
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