Cheryl Gillan MP: A report that underlines the need for a rethink on HS2

Cheryl Gillan is the Member of Parliament for Chesham and Amersham. Follow Cheryl on Twitter.

Today’s National Audit Office report into High Speed 2 will set off alarm bells all across Government and should bring about a major rethink of the Government’s transport policy.

The 50-page report was understatedly damning of the preparation for HS2, exposing fundamental flaws in the project and the project team. It confirmed that Government had failed to set out clear and cohesive strategic objectives and, more worryingly, highlighted the serious doubts over the ability and capacity of both the Department of Transport and its subsidiary company, HS2 Ltd, to successfully deliver the project.

The NAO judged the timetable to be overly ambitious and it has already resulted in mistakes being made by the Department on the benefit-cost calculations. The intention to introduce a Hybrid Bill in October 2013 seems now to be impossible and, therefore, it will likewise be impossible that this legislation will be passed before the next General Election. Over ambitious timetabling was also one of the contributory factors to the failure of the West Coast Mainline franchise and it would appear that the Department of Transport has failed to learn from its mistakes.

The Department comes under criticism for failure to engage adequately with stakeholders and it would even appear that it is failing to address criticisms from its own internal auditors. It is claimed that there are more than just a few problems with finding enough staff of the right calibre to give people the confidence that this project will be well implemented.

Those alarm bells should also be ringing in the Treasury. On current assumptions the project will require more money than the Department currently has allocated and already a £3.3 billion funding gap for Phase 1 has been identified. Furthermore, such is the level of incompetence it is not clear whether the Government will need to pay VAT on top of the current cost for the project and, if it is necessary, it has not been included in the calculations to date. Along with the extra £8.15 billion needed for rolling stock, the cost of this project is already spiraling out of control. This project looks to be turning into a money-gobbling monster and if the small, seemingly innocuous Preparation Bill goes through before the Summer, the Depart,emt of Transport will indeed have a license to print money at the expense of all the other Departments who are squealing under the Chancellor’s vice-like grip on the country’s finances.

The preparation has been poor across the board and the NAO report casts doubt over whether the Government has done the necessary research into how exactly this project will bring the benefits that have been espoused by Ministers. There can be no rebalancing of the economy for at least 20 years as the proposed legislation in the Hybrid Bill only deals with the Southern link from London to Birmingham. It is the Northern Y-section that would bring the benefits of rebalancing but they will not be apparent for decades.

What the project will do is relieve a bit of the commuter traffic, so effectively HS2 could be seen as a highly expensive way to deal with commuter traffic into London. I do not think the country can afford a project that obviously will not even deliver any so called rebalancing of the economy until Phase 2, North of Birmingham, is built, which will not happen for at least 20 years. That of course will mean London and the South East will ironically become more attractive, creating a wider gap between North and South for any rebalancing to address.

The Major Projects Authority has looked into the project three times already, but Government will not publish their findings. However, from the NAO report’s reference to those reviews it is revealed that they have identified concerns around confidence in delivery of the project, the risky timetable, skills capability and resources and affordability.

All in all, this report calls into question both the principles and basis of HS2 and whether the Department and HS2 Ltd are fit to deliver it. If it proceeds the Government will lock the country into a project which will dominate all spending on transport for many years to come without delivering the outcomes claimed for it with any degree of believable certainty. I now call upon my colleagues in Government to halt this project, reassess the country’s transport requirements and replace HS2 with a more realistic set of proposals which can be delivered effectively and efficiently rather than taking this high-risk project any further.