Report identifies £3 billion black hole in HS2 funding and questions economic benefits

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The National Audit Office has reservations about how the London to Birmingham link, which cuts through the Vale, will benefit the UK.

According to its report, the Government’s timetable for introducing a hybrid bill - announced in last week’s Queen’s speech - is ‘overambitious’.



It also questioned the relationship between journey-time savings and the strategic reasons for the project, such as rebalancing regional economies.

Transport Secretary Patrick McLoughlin has rejected the report’s conclusions, saying it is based on ‘out of date analysis’.

On funding, the report said: “We estimate there is a £3.3 billion gap spread over four years (2017-18 to 2020-21) which the Government will need to fill between the department’s forecast capital expenditure in the peak construction years of phase one and its budgets if these were continued at 2014-15 levels.

“The government has yet to decide how this will be funded.”

Amyas Morse, head of the office, said: “It’s too early in the High Speed 2 programme to conclude on the likelihood of its achieving value for money.

“Our concern at this point is the lack of clarity around the Department’s objectives.

“The strategic case for the network should be better developed at this stage of the programme.

“It is intended to demonstrate the need for the line but so far presents limited evidence on forecast passenger demand and expected capacity shortages on existing lines.

“It is also unclear how High Speed 2 will transform regional economies by delivering jobs and growth.

“The Department is trying against a challenging timetable to strengthen its evidence and analysis, which at present provide a weak foundation for securing and demonstrating success in the programme in future.”

Responding to the report, Mr McLoughlin said without HS2, rail routes connecting London, the Midlands and the North would be ‘overwhelmed’.

He said: “HS2 will provide the capacity needed in a way that will generate hundreds of thousands of jobs and billions of pounds worth of economic benefits.

“Economic modelling is just the start of the story. If we only relied on modelling we would not have built the M1, parts of the M25 or the Jubilee line extension to Canary Wharf.

“We are not building HS2 simply because the computer says ‘Yes’. We are building it because it is the right thing to do to make Britain a stronger and more prosperous place.”

Stop HS2 campaign manager Joe Rukin said the report shows the project is ‘out of control’.

And Penny Gaines, chair of Stop HS2, said: “The National Audit Office has identified that the current timetable for HS2 is overambitious.

“The Department for Transport is not allowing enough time to do necessary environmental surveys.

“In particular, rushing through the current design stage for phase 1, just to meet artificially set deadlines for presenting the hybrid bill means mistakes are going to continue to be made.

“These will be costly, both for individuals who have to petition Parliament about the mistakes in the design, and also for MPs who deal with the bill during it’s passage.

“It’s time ministers stopped their headlong rush to build HS2, and listened to what this independent public body is saying.”