Out-Law News 4 min. read
22 Oct 2013, 12:41 pm
A new report by the non-partisan Independent Transport Commission (ITC) (48-page / 1.1MB PDF) called on the Government to "reframe its presentation" of High Speed 2 (HS2) to focus on the line's potential to bring "better convenience, employment and connectivity to the public that it will serve". It said that UK cities should begin planning how to connect local and regional services to the line, and recommended that the Government provide "seed funding" to help these city-regions "harness the opportunities that [HS2] will bring".
The report comes just days after the BBC's Newsnight programme published a list of more than 50 places in the UK that would be made "worse off" by the line (6-page / 97KB PDF), based on findings by professional services firm KPMG as part of its recent work on the economic benefits of HS2. A number of critical reports on the project, including those by the National Audit Office (NAO) and House of Commons Public Accounts Committee (PAC), have questioned the benefits that the link between London, the Midlands and the north of England will bring to the UK as a whole.
Infrastructure law expert Patrick Twist of Pinsent Masons, the law firm behind Out-Law.com, said that the "shortcomings" of the Government's standard cost benefit analysis in relation to very large, long-term infrastructure projects were "increasingly recognised". He said that the ITC's report, as the first independent work on the merits of HS2, would be "eagerly awaited by those who would value an informed and dispassionate analysis".
"A number of critical infrastructure projects, such as HS1 and the Jubilee Line extension, may never have been procured based on the original cost benefit analysis work undertaken by the Government," he said.
"The work done by KPMG on the regional economic impacts of HS2 has made a valuable contribution to the understanding of the wider benefits of the line to the regional economies - something that had been conspicuously missing previously. However, the fact that it was commissioned by HS2 Ltd has encouraged opponents of the project to attack its conclusions. The ITC report will provide help to allow a better-informed debate," he said.
HS2 is due to be delivered in two phases, with the initial London to Birmingham phase of the line scheduled for completion in 2026. The line will cut journey times between the two cities to 45 minutes and support trains running at up to 250 miles per hour, according to the Department for Transport (DfT). A proposed second phase of the project envisages the construction of an onward 'y network' connecting the line to Manchester and Leeds, as well as to Heathrow Airport, by 2033.
The project continues to have the support of the leaders of England's three main political parties; however, at the Labour Party Conference last month, Shadow Chancellor Ed Balls said that a future Labour government would not support the line if costs continued to rise. HS2 has also attracted criticism from the Institute of Directors, amongst others, since the DfT announced an increase to the budget in June. According to the latest estimates, the project is expected to cost £46.2 billion with an additional £7.5bn for rolling stock.
In its early examination of the work done by the DfT to prepare for the new line, published in May, the NAO said that the Government was yet to demonstrate a "clear business case" for the project, particularly in relation to the ability of the new line to stimulate regional economic growth. HS2 Ltd, the company set up to deliver the project, responded in September with the report commissioned from KPMG. This report highlighted £15bn of productivity benefits across the regions, but omitted figures showing that areas such as Aberdeen, Bristol and Cardiff would in fact be disadvantaged by the new line.
In its report, the ITC said that HS2 had to be planned correctly if it was to fulfil its potential for driving regional economic growth. It said that although much had been made of the reductions in journey times between cities on the route, the greatest potential benefit of the project was the wider "spatial" benefits that would come from freeing up rail capacity for both passengers and freight across the network as a whole.
In order to take advantage of the connectivity benefits, regions had to start planning how best to connect local and regional services to the new line now, the ITC said. This would ensure that the benefits of the project "extend to a much wider region than merely the HSR stations", is said. These initiatives should be supported by seed funding provided by the Government, it said.
"Good connectivity to [HS2] is essential if its full range of benefits are to be captured: city-regions need to start planning now how they can best connect local and regional services to [HS2] stations," the report concluded. "This will ensure that the benefits of the rail service extend to a much wider region."
"Undertaking a large project such as HS2 is a leap of faith, spread over 30-50 years. The core infrastructure, particularly the route, must be planned ahead and cannot be delivered incrementally. However, HS2 can also be a catalyst for smaller and shorter-term projects that can have more immediate impacts on public perceptions, be delivered incrementally, and in some cases started immediately," it said.
The ITC's findings were based on a national 'call for evidence', which received submissions from over 150 organisations and individuals, and a series of workshops it held earlier this year.