Investing in HS2 is “backing the wrong horse” says think tank

THINK tank the New Economics Foundation (NEF) says demand for the HS2 high-speed rail project has “likely been overestimated” and has suggested alternative ways for the money to be spent.

Its report also said the £33bn cost does not offer value for money.

The latest criticism of the HS2 project comes only weeks after a damning report from the National Audit Office (NAO) suggested the business case for HS2 has not been made.
 
There is no evidence that the £33bn scheme would lead to economic growth it suggested.
 
The NAO further suggested that the project has an estimated £3.3bn funding gap and said the timetable for the planning phase of the project – with work due to start in 2016-17 – is “challenging”.

Now NEF has added to that negative assessment, agreeing with the NAO that evidence that HS2 – which will link Birmingham with London in the first instance and then create high-speed rail links to Manchester and Leeds – would promote economic growth or tackle the north-south divide is “limited”.

The NEF said the Government had “backed the wrong horse” and the money would be better spent on a “wider range of transport investments”.

Work is due to start on the first phase of the HS2 project in 2016 with the Birmingham-London link due to be up and running in 2026.

But NEF argues the money could be better spent elsewhere.

It suggestions include £10bn being spent on transforming rail infrastructure in northern England and the Midlands, creating new and faster east-west rail links, redeveloping stations and electrifying regional rail lines.

It also suggests £6bn could upgrade mass transport in Birmingham, Leeds, Manchester and Liverpool, including investments in large light rail schemes and bus networks.

David Theiss, a researcher at the NEF, said: “HS2 is the largest transport investment in the UK’s history. At the moment it amounts to a £33bn gamble.

“Our research shows the Government is backing the wrong horse.

“Instead of pouring billions of pounds into a single line that will take 20 years to complete we should be spreading our bets on a wider range of transport investments that offer better value for money.”

But transport minister Simon Burns said: “HS2 will provide the capacity needed in a way that will support thousands of jobs and billions of pounds worth of economic benefits.”

“It is not a case of HS2 and nothing else. During 2014-19 we are investing over £9bn on the current rail network, while latest figures show that over a one year period we spent upwards of £8.7bn on our roads.”

The report will be a concern for business leaders in Birmingham who have overwhelmingly backed the HS2 project.

They include Birmingham Airport chief executive Paul Kehoe who last week partly based his vision for the airport’s future on the potential of HS2.

The new railway would have an interchange at the airport, placing a third of the UK population within an hour’s journey time of Birmingham.

Kehoe said this created critical mass in the airport’s plans for growth.