How the HS2 dream became a political nightmare

A mile beyond HMP Wormwood Scrubs, in a north western suburb of London, a major construction project is underway. Here at Old Oak Common, they are building a new 14-platform railway super-hub. According to the plans, it will be “the best-connected and largest new railway station ever built in the UK”.

Welcome to the potential final destination for your forthcoming HS2 service to London. The only problem? It’s in Acton – which is not where most passengers travelling to the capital will intend to end their journey. Anyone wishing to reach central London would need to connect via the Elizabeth Line.

This, of course, was not the original plan. But now it seems that the controversial High Speed 2 railway may never even reach London Euston. Instead, as costs spiral, Downing Street and the Treasury are said to be considering a version of the scheme that would see HS2 trains stopping at Old Oak Common ^[1], six miles to the west.

With HS2’s future hanging in the balance, this possible answer to the question of how to keep a lid on the project’s escalating finances has exasperated its supporters. For its critics, it has highlighted the farcical nature of the whole endeavour.

Rishi Sunak must now decide what to do with the beleaguered infrastructure project he has inherited. There are no easy answers and plenty of disagreements. Lined up on one side are a string of former Cabinet ministers insisting it would be madness to curtail it ^[2]. On the other, a battalion of detractors, who argue that the maddest thing of all would be to continue with what they view as a mammoth drain on public finances ^[3] that cannot be justified.

London to Birmingham could take longer on HS2 than current trains

What’s clear is that HS2 is severely delayed and dramatically over budget: some say the overall price could pass £100bn, while one expert warns it could be closer to £200bn. The original budget was around £30bn.

It was meant to be our answer to the high-speed lines that whizz passengers through other countries. The idea of the UK’s flagship transport scheme – and Europe’s largest infrastructure project – was to cut road congestion, increase rail travel capacity, speed up journey times and reduce carbon emissions. To “transform intercity travel, radically improve commuter services into London and our other major cities and increase the amount of rail freight” – as the Tory transport secretary at the time Patrick, now Lord, McLoughlin put it, in a document detailing the strategic case for High Speed 2 in 2013.

2801 HS2 Shambles ^[4]

If the claims made for HS2 a decade ago were bold, they were not without caveats. The plan to create fast rail links between London, the West Midlands and northern cities including Manchester and Leeds would be one of the most challenging infrastructure projects on the planet, Lord McLoughlin acknowledged. But, he argued, it would also be “a step towards making Britain the best-connected island in the world.”

It’s fair to say this optimism has not aged well. Last week, Labour warned that a journey between London and Birmingham on HS2 could actually take longer than on current train services if government plans to cut back the scheme go ahead. And yet it will cost more. Michael Byng, the chartered quantity surveyor who created the method used by Network Rail to cost projects and who made the cost estimates for HS2 and shared them with the Department for Transport, puts the current figure for the London to Birmingham leg alone at £99.41bn. In HS2’s six-monthly report to Parliament in June, this was forecast to cost between £35bn and £45bn (in 2019 prices).

In 2017, Byng had estimated this first phase at £47.8bn (at fourth quarter 2015 prices), including the cost of extending the service to Manchester, with a separate branch to East Midlands Parkway. This would make HS2 the most expensive railway in the world, he warned at the time. He now puts the current price at £182.1bn.

recent European high speed rail projects compared ^[5]

Although he says ministers have consistently underplayed the costs, they have nevertheless been anxious to reduce the financial burden.

As a result, the high-speed rail network that was meant to be the envy of the world – a source of national pride – may be scaled back to a shortened stump of what it once looked like on paper. Like someone administering an amateur haircut, lopping off a bit more here and a little more there, successive governments have attempted to shave costs by axing parts of the line. The planned section between the East Midlands and Leeds was scrapped in 2021. Two years on, there are question marks over the planned link to East Midlands Parkway; and Number 10 will no longer guarantee the scheme will ever connect Birmingham and Manchester.

HS2 will be the most expensive railway in the world

This week, Sunak was urged to be “bold” and scrap the line north of Birmingham. Lord Berkeley, the deputy chairman of the independent Oakervee review into HS2, said existing services between Birmingham and Manchester were adequate, and that the money could be used to improve existing rail services in the north.

Former prime ministers Boris Johnson and David Cameron disagree. A “mutilated” line would be “insanity”, Johnson warned at the weekend. Former chancellor George Osborne has said axing the Manchester leg ^[6] would be a “gross act of vandalism” that amounts to “economic self-harm”. Sunak is now expected to delay a decision until the autumn statement. Jeremy Hunt, the Chancellor, is “considering” the future of the project, according to Culture Secretary Lucy Frazer.

Based on revised estimates, will HS2 still be the costliest railway on Earth? “Yes,” says Byng. “[But no one is] prepared to cancel it for fear of loss of political face.”

So how did we end up here? And is it too late to turn back?

The HS2 story begins with the Labour government of Gordon Brown, which, in 2009, established HS2 Ltd to consider the case for a new high-speed rail line. Then-transport secretary Lord Adonis announced plans for the project in 2010. It was scheduled for completion by 2033.

“The origin was [the desire] to give us a big national pride infrastructure project in the wake of the financial crisis,” says Byng. “There was never any thought given to cost.”

The price of any major infrastructure project will typically exceed its initial estimate. Arguably, if the true cost could be calculated at the outset, none would go ahead. No one now minds that the cost of building the Channel Tunnel almost doubled from the original £5.5bn, but that knowledge would have been a killer at the time.

Yet perhaps it was at least partly foreseeable that, for various reasons, an ambitious new rail scheme in Britain would be beset by ballooning costs. “We’ve always had the most expensive railways,” says Byng. We have known this for a long time – more than a century, in fact. A Hansard excerpt from June 1920 quotes the minister of transport at the time telling Parliament that “the cost of building railways per mile was UK: £34,000, France: £31,000, Prussia: £26,000, USA: £14,000.”

Nothing has changed since then, says Byng. “Great Britain is still a small, densely populated, property-owning democracy in which its inhabitants defend their rights fiercely.”

2209 hs2 cost main ^[7]

Indeed, when it comes to railways, country size matters. “In France, Spain, Germany, you can go 200 miles without stopping”, he points out. Here, we have such inconveniences as stations, people, homes – all far more densely packed together than elsewhere.

Phase 1 of HS2 (the London to Birmingham leg) was never really going to be comparable with foreign versions, says William Barter, a rail planning consultant. “It was always going to be more expensive, because it has stations, tunnels and a major junction complex. Also, the nature of England: we’re a crowded country, so there’s almost certainly more environmental and social negotiations.”

These include objections from communities and environmentalists; from so-called nimbys who, for understandable reasons, don’t want a major rail route slicing through their area. Local pressures obliged HS2 Ltd to bury the line out of London and through the Chilterns in lengthy tunnels, further pushing up the cost. More were added to avoid bisecting sensitive woodlands. Planning arguments over a viaduct near Solihull continue.

The Government’s Infrastructure and Projects Authority ^[8], which has rated most of HS2 as “unachievable”, attributes its dire prognosis in part to “excessive deference to local objections” necessitating costly redesigns – and fuelling a decade of political angst that has pushed back the opening of the first section from 2026 to 2029 or even 2033.

In 2018, a leaked official report by PwC that was kept under wraps for two years showed HS2 would cost taxpayers 25 per cent more than high-speed rail schemes in other countries. Compared with 32 other high-speed rail links, including the 386-mile Spanish line from Madrid to Barcelona and the 187-mile Chinese line from Shanghai to Nanjing, the UK’s costs were greater. A 188-mile stretch of high-speed rail from Tours to Bordeaux, opened in France in 2017, cost just more than a tenth as much per mile of track as phase 1 of HS2 was estimated at.

2209 crazy cost hs2 ^[9]

HS2’s architects set a design speed of 248mph, higher than France’s and Japan’s 200mph. This mandated extra-gentle curves and gradients and larger earthworks and structures, increasing the land take, making it harder to avoid sensitive environmental sites – and maxing the cost. By the time it was decided to limit line speed to 224mph, 54 ultra-high-speed trains had been ordered, work had begun and a major opportunity to economise had been lost.

This was not the only about-turn in the design process. The planned HS2 station at Euston was intended to have 11 platforms, but in 2021 it was cut back to 10. If the Government had already spent £105m on the first design, this looks like small change on a balance sheet where the sums are in the tens of billions.

‘I have warned politicians you can’t defy financial gravity’

“The chopping and changing does cost money,” says Barter. “[Including] aborted designs because you’ve decided not to use them any more, particularly at Euston. Then, when the work site is paused, there’s money spent to make it safe. And that’s only the up-front cash.”

What impact are the delays having on the contractors, he wonders? On the confidence they had in a future workstream? “Are they now going to put up their price even more to protect against contracts being aborted halfway through? You get into a vicious circle,” he says.

Add to that inflationary pressures driving up costs of materials and labour, and a skills shortage in the engineering sector in particular, meaning there’s often competitive bidding for workers, and it adds up to a recipe for dramatic overspend.

There are also more fundamental reasons for the spiralling costs, according to Byng. “You can’t have the public sector deliver a project like this,” he says. “It needs to be delivered by a competent contractor. None of ours are big enough any more; our balance sheets won’t stand the risk. You [also] need to cut down the amount we spend on professional fees. Ours are considerably higher than anywhere else in the world.”

But his own predictions and warnings have had little bearing on ministers’ decisions, he says. “I may as well be shouting into the wind. I’ve said to the politicians, [the] maths are what they are; you can’t defy financial gravity.”

So should they keep trying to? Or is it time to quit and, as many have called for, divert the funds into other projects? Drone footage of points on the planned line between London and the West Midlands this week showed how much land has already been turned into a building site by the works. It also indicated how much remains to be built – how far off we are.

Boris Johnson’s transport guru, Andrew Gilligan, has long argued that HS2’s billions could be better spent on targeted rail improvements.

No, says Barter, we should stick with HS2. “It’s a vital piece of national infrastructure and we should be going ahead full speed,” he argues. The West Coast mainline is at capacity and it’s “very difficult” to timetable extra trains on it. New tracks are needed. High speed makes sense as an investment for the long-term future. (We’re talking centuries here, not decades.)

But indecision is expensive. “The longer the uncertainty goes on, the more the cost goes up,” he says.

‘It’s not too late to scrap HS2 and save billions of pounds’

If HS2 terminates at Old Oak Common, would it still be worth it?

“I don’t think any journeys would be slower than they are now, but I don’t think HS2 would be so tempting as to get people off the conventional railway – which means no released capacity,” Barter says. “The critical thing now is to build it with scope to be extended.”

Counting the benefits purely in time savings is shortsighted in any case, he suggests. “When you’re building transformational infrastructure, there’s far more to it than that. We talk about levelling up and gross value added and driving up regional productivity… They’re hard to quantify. In a way, you do have to take a bit of a punt on it.”

But Byng disagrees. It’s not too late to scrap the whole thing ^[10], he believes, estimating the net cost of cancelling the project at £17.12bn – a sum that would be dwarfed by the cost of continuing with it. So far, some £23bn has been spent, he says. On the basis of his own estimated cost for the entire project, he calculates that £165bn would be saved if HS2 was abandoned. The line between London and Birmingham could be repurposed, he argues. Land that has been taken could be returned to its original owners.

2209 hs2 cost phase 1 and 2 ^[11]

As for the levelling-up argument, which has been used to justify HS2’s continuation, it’s hard to see how much levelling up would be achieved if the northern leg of the project is cut. Andy Burnham, the Labour mayor of Greater Manchester, is willing to discuss delaying the northern leg ^[12], but only if the Government commits to building an east-west route, known as Northern Powerhouse Rail. He and four other Labour mayors have written to ministers, warning scaling back HS2 will “leave swathes of the North with Victorian transport infrastructure that is unfit for purpose”. Andy Street, the Tory mayor of the West Midlands, has meanwhile said that scrapping the main line of the project would make it the “most expensive white elephant in UK history”.

In a sign of how little consensus there is on whether it’s needed or not, others have questioned the benefits HS2 would bring to the North.

“HS2 would have done nowt for th’North, or ‘nothing for the North’,” wrote Paul Salveson, a visiting professor at the Universities of Bolton and Huddersfield and chairman of South East Lancs Community Rail Partnership, in a blogpost in 2021 after the scrapping of the Leeds link. “[It] would have done the North few favours, sucking investment out of the North and into London and the South East. It would have drained money out of transport budgets, stopping much-needed projects with a far better return.”

What northerners wanted instead was investment in local and regional rail projects, better east-west rail links and improved bus services, he argued.

Conservative Home wants the billions earmarked for HS2 switched to other transport projects, “robbing the white elephant to pay the Red Wall,” as it were.

If only the London to Birmingham leg is completed, three trains per hour would more than halve the journey time to 42 minutes. But the need to keep running Euston-Birmingham trains to serve intermediate cities would mean few paths being freed up on the West Coast Main Line for freight. Moreover, the shortfall in revenue could well force up fares on HS2 (already likely to be 20 to 33 per cent higher than on conventional trains) just when it needs to get bums on seats.

Completing HS2 through to Manchester would give a time from London of 71 minutes (41 from Birmingham).

Building what’s left of the eastern leg – which would mean extending it as far as East Midlands Parkway – would maximise the use of HS2, ease the pressure on King’s Cross and put Nottingham 26 minutes from Birmingham (70 today).

But HS2 has another problem beyond its spiralling costs and continuous delays: the lack of a clear vision around which its supporters can rally. The Government has hailed it as a key step towards decarbonising transport. But downgrading its own commitment last week to tackling the climate crisis as a matter of urgency sends mixed messages.

Far from being a source of national pride, HS2 has become a source of confusion, frustration and anger. Exactly what Labour would do with the project also remains unclear. Although Sir Keir Starmer’s party has previously committed to building it in full, last week the Labour leader sounded less certain ^[13]. There was one thing he was frank about, however: that the Government needs to “end the chaos now”.

References

^{^} considering a version of the scheme that would see HS2 trains stopping at Old Oak Common (www.telegraph.co.uk)
^{^} insisting it would be madness to curtail it (www.telegraph.co.uk)
^{^} would be to continue with what they view as a mammoth drain on public finances (www.telegraph.co.uk)
^{^} 2801 HS2 Shambles (cf-particle-html.eip.telegraph.co.uk)
^{^} recent European high speed rail projects compared (cf-particle-html.eip.telegraph.co.uk)
^{^} axing the Manchester leg (www.telegraph.co.uk)
^{^} 2209 hs2 cost main (cf-particle-html.eip.telegraph.co.uk)
^{^} Infrastructure and Projects Authority (www.telegraph.co.uk)
^{^} 2209 crazy cost hs2 (cf-particle-html.eip.telegraph.co.uk)
^{^} scrap the whole thing (www.telegraph.co.uk)
^{^} 2209 hs2 cost phase 1 and 2 (cf-particle-html.eip.telegraph.co.uk)
^{^} is willing to discuss delaying the northern leg (www.telegraph.co.uk)
^{^} last week the Labour leader sounded less certain (www.telegraph.co.uk)