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HS2 rail benefits to economy 'unclear', says National Audit Office HS2 rail benefits to economy 'unclear', says National Audit Office
(about 11 hours later)
The benefits of the HS2 high speed rail project on the economy are unclear, the National Audit Office (NAO) has warned. The economic benefits of the HS2 high-speed rail project are unclear, the National Audit Office (NAO) has warned.
The NAO said in a report that it had "reservations" about how the London-to-Birmingham link would deliver growth, adding that the project had an estimated £3.3bn funding gap. In a report, the NAO said it had "reservations" about how the planned high-speed rail link would deliver growth and jobs.
But Transport Secretary Patrick McLoughlin said the NAO's conclusions were based on old data. It added that the project had an estimated £3.3bn funding gap.
Labour said the report was a "worrying wake-up call" for the government. Labour described the report as "worrying", but Transport Secretary Patrick McLoughlin rejected the report, saying the case for HS2 was "clear".
The NAO said it had "reservations about the business case" and said the timetable for the planning phase of the project - with work due to start in 2016-17 - was "challenging".The NAO said it had "reservations about the business case" and said the timetable for the planning phase of the project - with work due to start in 2016-17 - was "challenging".
The report, published on Thursday, said: "In particular, in presenting its case for investment in the project, the Department of Transport (DfT) has poorly articulated the strategic need for a transformation in rail capacity and how High Speed 2 will help generate regional economic growth." "In particular, in presenting its case for investment in the project, the Department of Transport (DfT) has poorly articulated the strategic need for a transformation in rail capacity and how High Speed 2 will help generate regional economic growth," the report said.
The department's "methodology for appraising the project puts a high emphasis on journey-time savings, from faster and more reliable journeys, but the relationship between these savings and the strategic reasons for doing the project, such as rebalancing regional economies, is unclear." The department's "methodology for appraising the project puts a high emphasis on journey-time savings, from faster and more reliable journeys, but the relationship between these savings and the strategic reasons for doing the project, such as rebalancing regional economies, is unclear".
'Right thing to do' 'Needs more work'
The NAO also estimates a £3.3bn funding gap for the controversial project which "the government has yet to decide how to fill".The NAO also estimates a £3.3bn funding gap for the controversial project which "the government has yet to decide how to fill".
A new estimate based on a clearer route and more information was likely to be higher than an earlier cost estimate of £15.4bn-£17.3bn, it said.A new estimate based on a clearer route and more information was likely to be higher than an earlier cost estimate of £15.4bn-£17.3bn, it said.
Meanwhile, it also warned that the government's timetable to start phase one of the project was "overambitious". Meanwhile, it also warned that the government's timetable to start phase one of the project was "over-ambitious".
Commenting on the report, House of Commons Public Accounts Committee chairwoman Margaret Hodge said: "The DfT has produced a business case that is clearly not up to scratch. Some of their (the DfT's) assumptions are just ludicrous." Speaking on the BBC's Today programme, one of the report's authors, Geraldine Barker, said the government needed to be upfront about uncertainty surrounding the costs and benefits of project.
Ms Hodge added: "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 think they need to do more work. [The objectives] they've stated is quite broad - we couldn't find the detail backing it."
"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," she said. Margaret Hodge, chairwoman of the Public Accounts Committee, said the business case for HS2 was "clearly not up to scratch".
"Some of their [the DfT's] assumptions are just ludicrous," she said. "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."
'Strong and prosperous''Strong and prosperous'
But Transport Secretary Patrick McLoughlin said he "did not accept the NAO's core conclusion".But Transport Secretary Patrick McLoughlin said he "did not accept the NAO's core conclusion".
The report depended "too much on out of date analysis and does not give due weight to the good progress that has been made since last year," he said. The report depended "too much on out-of-date analysis and does not give due weight to the good progress that has been made since last year", he said.
"The case for HS2 is clear. Without it the key rail routes connecting London, the Midlands and the North will be overwhelmed." "The case for HS2 is clear. Without it, the key rail routes connecting London, the Midlands and the North will be overwhelmed."
Mr McLoughlin added: "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." But shadow transport secretary Maria Eagle said the report was a "worrying wake-up call" for the government.
But Shadow Transport Secretary Maria Eagle said the report was a "worrying wake-up call" for the government.
"A new high-speed line between north and south is vital to tackle the rapidly advancing capacity crunch on Britain's railways, yet the NAO is damning about the Department for Transport's ability to deliver it," she said."A new high-speed line between north and south is vital to tackle the rapidly advancing capacity crunch on Britain's railways, yet the NAO is damning about the Department for Transport's ability to deliver it," she said.
The government's timetable for delivering the legislation necessary for the rail link was "hopelessly unrealistic," she claimed.
Cut in journey timesCut in journey times
HS2, which runs through Tory heartlands, has faced bitter opposition. Stop HS2 campaign manager Joe Rukin said: "The project is out of control because the politicians involved have been seduced by the words 'high speed rail' and have been complicit in fabricating a case for their vanity project." HS2, which runs through Tory heartlands, has faced bitter opposition. Stop HS2 campaign manager Joe Rukin said: "The project is out of control because the politicians involved have been seduced by the words 'high-speed rail' and have been complicit in fabricating a case for their vanity project."
He said: "The NAO say everything the Stop HS2 campaign has been saying for three years. The government and MPs haven't wanted to listen to us, but the surely have a duty to listen to the NAO." He said: "The NAO say everything the Stop HS2 campaign has been saying for three years."
Last week new legislation paving the way for development of the HS2 was announced in the Queen's Speech. Last week, new legislation paving the way for development of the HS2 was announced in the Queen's Speech.
The High Speed Rail (Preparation) Bill would allow expenditure on construction and design on the HS2 project "quicker than otherwise possible".The High Speed Rail (Preparation) Bill would allow expenditure on construction and design on the HS2 project "quicker than otherwise possible".
It aims to provide the Parliamentary authority for ecological surveys and other preparatory work to take place and to pay compensation to property owners along the route. It aims to provide Parliamentary authority for ecological surveys and other preparatory work to take place and to pay compensation to property owners along the route.
It is hoped the first trains will run on the HS2 line around 2026.It is hoped the first trains will run on the HS2 line around 2026.
The Department for Transport says phase one will cut London to Birmingham travel to 49 minutes, from the current one hour and 24 minutes.The Department for Transport says phase one will cut London to Birmingham travel to 49 minutes, from the current one hour and 24 minutes.
The HS2 phase two would virtually halve journey times between Birmingham and Manchester - to 41 minutes - and between London and Manchester from two hours and eight minutes to one hour and eight minutes.The HS2 phase two would virtually halve journey times between Birmingham and Manchester - to 41 minutes - and between London and Manchester from two hours and eight minutes to one hour and eight minutes.
Speeds of up to 250mph on HS2 would reduce a Birmingham to Leeds journey from two hours to 57 minutes.Speeds of up to 250mph on HS2 would reduce a Birmingham to Leeds journey from two hours to 57 minutes.