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3: Government Auditor Issues HS2 report card – ‘Could do better on business case’

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3: Government Auditor Issues HS2 report card – ‘Could do better on business case’
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The National Audit Office (NAO), the body that scrutinises government spending on behalf of Parliament, has recently been focusing its severe gaze on the Department for Transport’s work to-date for High Speed 2.

The resulting review of the early programme preparation, published 16 May 2013, won’t make comfortable reading for backers of the scheme. Indeed, opponents of the project will find a good deal of ammunition within its pages.

The NAO is sceptical about the potential of High Speed 2 to help deliver growth. It does though think the scheme has potential of a different sort – the potential to damage government finances thanks to a £3.3bn funding gap.

It’s not all bad for the DfT – it is noted that the Department has taken steps to improve programme management, and has strengthened senior management oversight. But the overall tone is certainly negative. In particular, the review finds that:

  • the DfT has failed to articulate clearly how reduced journey times will help achieve strategic objectives such as rebalancing regional economies;
  • only limited evidence has been produced on where and by how much increases in capacity are needed on the West Coast Mainline;
  • the cost-benefit estimates are uncertain;
  • the timetable for introducing the hybrid bill to parliament (in October 2013) is over-ambitious;
  • the DfT is not sufficiently engaged with stakeholders.

The review concludes by making a number of recommendations to address the identified flaws, focusing on a restated business case and further review of the programme management.

The government has responded robustly, with transport secretary Patrick McLoughlin telling the BBC that HS2 is about more than just the business case, with strong support for the scheme from residents in the regions. He said he did not support the core conclusions of the report and accused the NAO of depending on out-of-date analysis.

Some newspapers (the Independent and the FT) also report that the permanent secretary of the DfT has refused to sign off on one of the main conclusions of the review. This could get interesting. Further developments will be covered here…


NAO review

Independent article

FT Article (paywall / registration required)

BBC Article

20 May 2013

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