Four reasons why HS2 is on the wrong track
Photo credit: Яick Harris
January 28, 2013 // By: David Theiss
Today the government have detailed plans for the northern sections of HS2, their £33bn high speed rail project. The message is clear: ‘We are in an economic mess. We have a plan to fix it. HS2, despite all the noise from naysayers, will be the engine by which we pump the lifeblood of economic opportunity to poor performing regions.’
Like the litany of statements and speeches extolling the HS2 idea over the past 23 months, we will be told that we cannot afford not to go-ahead with construction. Like the previous statements, the promise of HS2 will be long on platitudes and short on evidence.
Independent analysis by nef has demonstrated that the case for HS2 is far from certain. Our work has raised four main concerns:
- Evaluation of HS2 against other potential investments has been poor. Assessing HS2 against limited alternatives – in terms of scale and value – has led to an artificial bias in favour of HS2.
- It is unlikely that HS2 will be able to achieve many of its key objectives, like economic rebalancing. Wider economic impacts for the full HS2 scheme will amount to only 37p of benefits for every £1 spent. Previous experience of high speed rail internationally suggests many of these benefits will likely accrue to areas already performing well economically, like London.
- The Department for Transport’s appraisal of HS2 has relied on out-dated methodology that overlooks and/or overvalues many material factors. For example, the economic case for HS2 overvalues travel time savings - the key factor driving the benefit calculations - by approximately twice the appropriate value according to the Department’s own reports.
- Official estimates of the return on investment have been trending downwards as calculations have been revised over time, and will likely to end up being low, substantially less than the average return for conventional UK rail investments.
While we fully recognise the possibility that HS2 could help transform Britain’s rail network, there is little robust evidence that constructing another train line, even one accommodating very fast trains, will have transformative economic effects.
At a time of serious economic difficulty the role of infrastructure investment is clear. But, before going full steam ahead with HS2, it is essential that we properly consider what else we could achieve for the economy with £33bn. With so many scarce resources hanging the balance and the taxpayer picking up the check, can the Government afford to be wrong about HS2?
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