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Sir John Armitt says HS2 is at risk from the 'political appeal' of cutting the scheme

Sir John Armitt has added his voice to concerns over the future of High Speed 2 by admitting that there is a “risk that it won’t happen” as the business case for the scheme comes under intense scrutiny.

The former chief executive of Union Railways, the company responsible for development of the high-speed Channel Tunnel Rail Link, told an EC Harris spending review panel that there would be political appeal to cutting HS2.

He said “the decision to go ahead [with HS2] was fundamentally a political one”.

He added: “Eighty-eight per cent of journeys in this country are not made by rail. Politically, there are a lot of people you can appeal to by cutting HS2.”

The Olympic Delivery Authority chairman added that the UK’s deficit and financial problems meant “clearly there is a risk that HS2 won’t happen”.

He said the UK needed to look at “adding to its 19th century” infrastructure and insisted that “any new railway will be high speed”.

“But in the current political environment it is a pretty risky time and it will get even riskier as the election gets nearer,” he added.

The route of HS2 was this week safeguarded from future development which might conflict with the planned line.

Safeguarded route

The line of the route will be protected from all construction that conflicts with the government plans for the railway.

Sections of the route in both Bromford and Ealing have not yet been safeguarded, pending a decision on whether tunnels should be bored in these locations.

The move will allow people living within around 120 m to approach the government to buy their property, under “blight” procedures.

Successful applicants will receive the open market value of their property, plus 10 per cent up to £47,000, as well as moving costs.

Transport secretary Patrick McLoughlin said: “HS2 is moving from the drawing board towards construction. Safeguarding is an important milestone for homeowners and for planning purposes”.

Mr McLoughlin last week admitted the projected cost of HS2 now stands at £42.6bn, up from £33bn, which includes a “contingency” fund.

The reported cost of the first phase (London to Birmingham) now has a budget of £21.4bn, with an allocation of £21.2bn for phase two, but these figures include a contingency fund of £14.4bn across the scheme.

Chief secretary to the Treasury Danny Alexander was forced to defend HS2 when he appeared before the Treasury Select Committee on Tuesday.

Conservative South Northamptonshire MP Andrea Leadsom criticised the project’s value to the taxpayer after its contingency budget was increased.

In response, Mr Alexander said there would be “robust incentives for those delivering it to deliver to time and under budget” and added that the chief executive of the London 2012 organising committee Lord Deighton would take on a “similar role in ensuring delivery of this project” at HS2.

HS2 last month appointed Lord Deighton to lead a taskforce to maximise the economic benefits – including job creation – generated by HS2.

Mr Alexander insisted the project would be “transformational” for the economy. He added that he had been looking at how the cost of infrastructure construction could be reduced.

“I have been engaged in a piece of work with the construction sector to look at the cost of infrastructure projects compared with other parts of Europe and take steps to bring those costs down.”

In its Infrastructure Cost Review: annual report 2012-13 released earlier this month, the Treasury claimed its work was uncovering large efficiency savings across major projects, including £1bn in the first phase of High Speed 2.

Jim Steer, founder of transport consultancy Steer Davis Gleave, admitted there was a “real sense of risk around HS2” now, but added that it was going to be “a great deal more valuable than HS1, which is currently only half full”.

He added that he didn’t know another transport scheme that would create the same level of return for the Treasury than HS2 through its track access charges.

EC Harris senior adviser Richard Bowker added: “If it does get canned, I wonder if it will be our own fault, through our inability to explain that it’s about capacity, jobs, regional economics. I still believe there are fantastic benefits to HS2, but we have to get smarter about communicating it.”

Sir John is currently undertaking the Armitt Review, commissioned by the Labour Party to look at the ways to achieve consensus on major infrastructure decisions and long-term planning.

CBI chief policy director Katja Hall said industry now needs confidence that the business case for HS2 is “watertight” after its budget swelled.

Politicians speak out on HS2

HS2 came under fire this week when both Mayor of London Boris Johnson and former business secretary Lord Mandelson expressed doubts over the scheme.

Lord Mandelson, who supported the scheme in government, entered the debate by writing in the FT that “all the parties, especially Labour, should think twice before binding themselves irrevocably into HS2” and that “there are no simple options when it comes to transport – but I now fear HS2 could be an expensive mistake”.

He added: “It is not all it seems and has the potential to end up a mistake, damaging in particular to those people that it was intended to help.”

Mr Johnson said that while he backed the principle of high-speed rail, he feared HS2’s project costs would rocket from £42bn to £70bn.

Writing in the Daily Telegraph, he said: “To understand the prohibitive costs of UK infrastructure, you need to take this haemorrhage of cash to consultants, and then multiply it by the time devoted to political dithering.”

He added: “This thing isn’t going to cost £42bn, my friends. The real cost is going to be way north of that (keep going until you reach £70bn, and then keep going).”

Former Labour chancellor Alistair Darling admitted he was a “HS2 sceptic” in an interview with The Sunday Telegraph last weekend.

HS2 Ltd issued this response to Lord Mandelson’s comments: “Lord Mandelson does not call for HS2 to be cancelled. What he does is call for greater consensus for and stronger evidence of its benefits so that politicians and the public can make informed decisions as to its long-term value to the UK.

“We must build on that consensus by providing up-to-date and detailed evidence of the benefits that HS2 will bring, including the creation of 100,000 jobs and the economic return of £2 for every £1 invested through linking eight out of our 10 biggest cities.

“However, we recognise the challenge that has been laid down and our need to respond.”


Readers' comments (1)

  • HS2 ltd have been paid by the taxpayer to provide detailed evidence for the claims it makes in terms of VFM, green credentials and rebalancing our economy. It is now several years into the project and HS2 ltd have not been forthcoming with any proper evidence. How long should the public have to wait for answers?

    I believe Sir John Armitt once said HS2 would never travel above 186mph. Perhaps he was right, it now looks as if it may never travel full stop.

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