High Speed 2: review of early programme preparation: Chair's statement

16 May 2013

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

"HS2 is one of the country’s largest infrastructure projects, with plans to invest huge sums of taxpayers’ money, up to £17.3 billion for phase one and around £33 billion if phase two goes ahead.

The Department has produced a business case that is clearly not up to scratch and shows no signs of having learnt the lessons from HS1, which the Committee reported on last year. Some of their assumptions are just ludicrous. To take just one example, on the benefits to business travellers, the Department continues to assume that business travellers do not work when on the train and to use data that is over 10 years old.

HS1 ended up costing the taxpayer billions when it was supposed to pay for itself. An estimated £3 billion funding gap has been identified for HS2, already bringing into question the affordability of this project. Despite the sums planned for investment HS2 is currently predicted to generate just £1.40 in benefit for every £1 spent on phase 1. The Department has already belatedly identified errors in its calculations that have wiped £12 billion off the expected benefits.

There is virtually no evidence in this business case to support claims that HS2 will deliver regional economic growth, one of the key aims and justifications for this project. We have been told that it will deliver around 100,000 new jobs but there is no evidence that all these jobs would not have been created anyway.

The Department has also set an extremely ambitious timetable for the project, with no room for mistakes. Past experience does not fill us with confidence in this optimism. Unless the Department gets its act together, HS2 will not deliver all intended benefits for travellers and the regions, and it will not deliver value for the taxpayer."

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