HS2 offers ‘very poor value for money’ after scrap of Northern leg

The cancellation of the HS2 leg to Manchester has resulted in the project being “very poor value for money” according to cross-party MPs.

The Public Accounts Committee (PAC), which examines government spending, has said there are “unknown ramifications of the decision to cancel HS2’s Northern leg”.

Issues range from how land and property now no longer needed will be disposed of, fairness to those who have had their properties compulsorily purchased; impacts on other rail projects dependent on the cancelled phases; what will be delivered with a redirected £36bn and when or how the high-speed trains will operate as part of the network.

MPs are also “highly sceptical” as to how or if private investment will be attracted to fuel the planned London terminus at Euston.

It slams costs which have been “a constant problem throughout the whole HS2 project” which could be as high as £67bn, up from 2019 estimates of £44.6bn.

The report stated: “HS2 now offers very poor value for money to the taxpayer, and the department and HS2 Ltd do not yet know what it expects the final benefits of the programme to be.”

Sunak cancelled the Northern leg of the project in Manchester in October to redirect £36bn to other projects and keep Phase 1 from London to Birmingham as the section had “value for money” and avoided £11bn of costs incurred from the cancellation.

However, the PAC report said: “There are many uncertainties in this assessment and we were left with little assurance over the calculations.”

Dame Meg Hillier MP, Chair of the Committee, said: “The decision to cancel HS2’s Northern leg was a watershed moment that raises urgent and unanswered questions, laid out in our report. What happens now to the Phase 2 land, some of which has been compulsorily purchased? Can we seriously be actively working towards a situation where our high-speed trains are forced to run slower than existing ones when they hit older track? Most importantly, how can the Government now ensure that HS2 deliver the best possible value for the taxpayer?

“HS2 is the biggest ticket item by value on the Government’s books for infrastructure projects. As such, it was crying out for a steady hand at the tiller from the start. But, here we are after over a decade of our warnings on HS2’s management and spiralling costs – locked into the costly completion of a curtailed rump of a project and many unanswered questions and risks still attached to delivery of even this curtailed project.”

Henri Murison, Chief Executive of the Northern Powerhouse Partnership, said “The fact that the business case for the remaining bit of HS2 has plummeted since the Northern leg was cancelled will not surprise the Government. The Department for Transport has already admitted as much.

“The Oakervee Review, published when Rishi Sunak was Chancellor, made clear it was the Northern sections of the route to Leeds and Manchester which justified the cost of the section into London. Instead the North is paying the price of having to placate vociferous local opponents with expensive tunnels through the Chilterns.”

He added: “The Government has a lot of work to do to put some meat on the bones of its Network North plans.

“Our chief focus will be to make sure that the new version of Northern Powerhouse Rail can now be delivered sooner than expected, starting with the section between Manchester Piccadilly and Manchester Airport which can be repurposed from the existing high speed rail hybrid bill.”