Is HS2 losing the support of the Midlands business community?
A SURVEY carried out by a Midlands restructuring and recovery firm found that 62% of local business owners, advisers and financiers do not think the £42.6bn earmarked for the HS2 high-speed rail project is a good use of public funds.
Some 77% of those with that opinion would prefer that £42.6bn money to be spent on other infrastructure projects.
And 23% would prefer that £42.6bn to cover other tax incentives for UK business.
The results of the FRP Advisory survey will be a concern to the company behind HS2, which has faced increasing opposition to its plans in recent weeks from senior politicians.
The Government remains committed to the project but if the FRP Advisory survey – which interviewed 200 people – is representative of the wider business community, there is clearly a ‘hearts and minds’ battle to be won even amongst those who have long been held to be the main beneficiaries of a high-speed link between Birmingham and London.
The survey was conducted during the first week of July 2013 just days after the Government increased its forecasting for the projected cost for HS2 by £8.1bn to £42.6bn.
Gerald Smith, partner at FRP Advisory, said: “As the Government looks to invest in infrastructure to stimulate further UK economic growth, it may pay to listen to the very Midlands business community it aims to assist when it comes to the cost-benefit equation for HS2.
“Birmingham’s business fraternity is far from convinced about whether this £42bn project – being sold to the public as a way of stimulating the regional business communities – represents good value for public money.
“FRP Advisory’s survey, which includes views from the key lenders who finance growth in the Midlands, indicates that the majority want this level of funding to be spent on other forms of infrastructure projects – but not all on a high speed rail link linking London with Birmingham and Manchester.
“Our own anecdotal evidence also suggests that the budget for HS2 will soon have to be revised upwards again, based on the extraordinary surge in prices paid for piecemeal compulsory purchase orders of land on and adjoining to the planned route even over the past 18 months.”
