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Yesterday the FT reported that the forthcoming Oakervee Report on HS2 will say that the cost of HS2 could rise to £106 billion. Meanwhile Dominic Cummings and the Prime Minister’s transport advisor Andrew Gilligan are said to be sceptics. Given spiralling costs and questions in the heart of government, is HS2 worth it?
People have grappled over this question for years. But as rail investment has become ever more politicised, there hasn’t been much reasoned debate balancing the costs and benefits of the project.
The costs are clearly an issue. The estimate of up to £106 billion is almost double the £56 billion estimated in the 2015 Budget, which itself was higher than earlier projections. There is going to need to be a lot of benefit to counter that cost.
A key problem on the benefit side of the ledger is that the goals of the project seem to have blurred.
Originally the main argument for HS2 was to free up capacity on the West Coast Mainline.
More recently it is being spoken about in terms of its ability to regenerate the north of England. And any wobbles in terms of commitment to the project are seen as an affront to the north. For example, Leeds City Council leader Judith Blake said that “Cancelling HS2’s eastern leg would seriously undermine this Government’s claim to be seeking to level up the North of England.”
While modelling of demand and capacity is a fairly straightforward task, pinning down the economic benefits is much more difficult to do. There are two main problems with current thinking around the latter.
The first is that good connectivity alone doesn’t change the relative benefits a place offers to businesses. Just look at Stoke and Doncaster, two places that struggle economically despite being one and a half hours from London. The service is frequent too – 11 trains will leave Kings Cross for Doncaster before 9am tomorrow.
For those places investment in skills is needed before they can realise the benefits of good connectivity. Stoke is 51st out of 63 in terms of share of its residents with a degree, while Doncaster is 62nd. Many other northern cities face similar issues.
The second is that it’s important not to forget that, while HS2 will of course deliver time savings, there is already a railway in place. In the world of black and white you’d be forgiven for thinking that what connects cities are nothing more than muddy tracks churned up by horse and carts. So it’s worth stating this: the current train between London and Manchester takes just over two hours. We’re not going from zero to one.
What is understandably frustrating is that those places due to welcome HS2 have set about making plans to make the most of the investment. A change of direction now from central Government, years after the project was given the go ahead, would consign a lot of work locally to the bin.
That said, HS2 doesn’t do a great deal to tackle the underlying economic challenges that many northern cities face.
So we need to take a step back and think about the primary purpose of project. If it is about increasing capacity then fine, but you could question whether a cheaper alternative would achieve this.
However, if the goal of HS2 is to improve the economic performance of the North then it will only be successful if it is treated as a small part of a broader package of investment. This should include serious spending on transport connections within cities – such as a metro system for Leeds – and a major increase in funding for northern FE colleges to improve the skills of people living in the north’s left behind places.
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