Lord Berkeley, formerly Deputy Chair of the Oakervee Review commissioned by the Government to evaluate the future of HS2, has published his own report evaluating the status of HS2 and suggestions for its future.
He argues that HS2 is the wrong solution to the challenges of improving rail services in the Midlands and North, and that there are alternatives which are cheaper and quicker to implement and can provide commuters in these areas with better daily services. Improvements to the lines to and from London can be delivered without building a new line and causing untold damage to businesses and residents as well as the environment.
In his report, Lord Berkeley argues that it was not possible to produce a genuine independent report; that he was prevented from attending important meetings during the Oakervee Review, which restricted his ability to carry out his role as Deputy Chair effectively. Following a leaked draft of the Review’s report, which he was unaware of, Lord Berkeley collated and evaluated all of the evidence available to him and conducted his own assessment of the business case for the project.
Lord Berkeley, based on independent estimates of costs and benefits, states that the Benefit Cost Ratio (BCR) of HS2, has fallen well below the break-even point of 1:1 and, with a detailed assessment of benefits, could fall to less than 0.6:1. This means that the taxpayer would receive only 60p of return for every pound that is spent on the project. This is in stark contrast with the BCR of 2.3:1 (£2.30 gained for every £1 spent), which has long been used by HS2 Ltd to justify continuing with the project and has helped the project ensure progress through the various parliamentary stages (Phase One and 2a). Unfortunately, it has become clear that the HS2 analysis is flawed, being based on revenues from very high train speed and 18 train per hour, unachievable anywhere on the continent or Japan.
Lord Berkeley said, ‘It is my belief that there is overwhelming evidence that the costs of the HS2 project are out of control, the benefits are overstated and that it potentially will not be delivered to Leeds and Manchester for another 20 years. There is also substantial evidence of poor project management and governance, and no sign that this problem will be resolved by the public bodies responsible for its delivery to give stakeholders and Government comfort that it is wise to spend over £100bn on one railway project.’
With this analysis, Lord Berkeley explains that ministers have only two options:
• Recognise that the project is more than three times over budget and begin a process of approving a new budget for the HS2 project at an estimated cost of £107bn, with or without a reduced specification and accept that the benefit cost ratio will be substantially decreased.
• Build only the small parts of HS2 within the Northern Powerhouse area and cancel the other parts of it; commit to upgrading existing Network Rail lines in the NPH and Midlands Connect areas. This would deliver earlier benefits to local and regional services and save the Government around £50bn.
Lord Berkeley continues, ‘From the evidence I have seen, I believe that Parliament was misled on the question of HS2 costs and that it is highly unlikely that, if it had been given the real cost figures by the Department for Transport, it would have passed the legislation to allow this project to proceed. The inaccuracy of the figures given to Parliament are such that the project HS2 Ltd. is currently pursuing does not reflect the endeavour approved by Parliament.’
Further information Tony Berkeley 07710431542, [email protected]