HS2: Value to economy has fallen, says report
Latest business case for £50bn rail link concedes benefit-cost ratio has fallen
THE economic benefits of building the HS2 rail line will be lower than previously forecast according to a report released by the company tasked with promoting the £50bn project.
Earlier cost-benefit analyses of HS2 suggested that for every £1 spent on the project the economy will benefit by £2.50 in the long run, The Independent says. The payoff is known as a benefit-cost ratio (BCR) of 2.5.
In a new business case report released today, Crossrail says the BCR of the two-phase project has fallen to 2.3. The revised figure lead to accusations that the government is "simply pulling random figures out of the air," the Independent says.
In response, the Government said the revised BCR for HS2 was “similar to Crossrail and higher than the BCR ratio for some other major projects when approved, such as Thameslink and the Jubilee Line extension”. It added that the BCR for HS2 will increase to 4.5 (£4.50 of benefits for every £1 spent) if rail demand continued to rise until 2049.
Earlier in the day the transport secretary Patrick McLoughlin warned that Labour must not "play party politics with our prosperity" by withdrawing its support for HS2.
Speaking ahead of the launch of the government's latest business case for the £50bn project, McLoughlin said political consensus was essential to its success. He acknowledged that there was "lively debate" over the merits of the scheme, but said Labour's leaders needed to offer more emphatic support for the massive infrastructure project.
"You can't say one day you back better infrastructure only the next threaten to stop it being built," McLoughlin said, an apparent reference to comments by shadow chancellor Ed Balls that a Labour government might dump HS2 if costs continue to rise.
The BBC's transport correspondent Richard Westcott says the latest cost benefit analysis - the fifth attempt to justify HS2's massive price tag - takes a different tack to its predecessors.
It warns that the alternative to HS2 - an upgrade of existing lines running north from London - would cause 14 years of weekend chaos on the network. The report also shifts the emphasis away from contentious issues such as the productivity of workers using laptops and smartphones as they travel to and from London, and puts the focus on "providing lots of extra capacity on the rail network", Westcott says.
Regardless of its emphasis, the latest business case is unlikely to placate opponents of the scheme. Writes Westcott: "Each new analysis has been met with derision and anger by opponents of the scheme, who claim the case for building this very fast train line is based on unrealistic assumptions, fragile numbers and old data."
Shadow transport secretary Mary Creagh said she was looking forward to reading the revised "cost benefit analysis". But she repeated Ed Balls' warning that there would be "no blank cheque" for the project and said ministers "must get a grip on costs". ·