Vivid Thoughts: HS2 – Why it is sometimes good to stop digging the hole deeper and have a look around.

In August of this year the Government published the terms of reference for an independent review, chaired by Douglas Oakervee, into whether and how to proceed with the High Speed 2 project.  The terms of reference for the review of HS2 state that it would consider:

  • benefits and impacts;
  • affordability and efficiency;
  • deliverability; and,
  • scope and phasing, including its relationship with Northern Powerhouse Rail.

 

The decision to undertake the review appears to have split views, with those in favour of the project seeing it as another unnecessary delay, while those against seeing it as a last chance for their arguments to be heard. Wherever you stand on HS2, it seems to us that this is a wise call for a number of reasons.

First, this is a generational project, with a genesis from over a decade ago, and a payback period of many decades.  The question must be asked, is the world of today, and the anticipated world of tomorrow, what was envisaged over a decade ago.  We would suggest not.  We are seeing unprecedented changes in the way we live, work, and spend our leisure time.  All these in our view erode the arguments for HS2 in its current form. Further, as this is generational scheme, perhaps we need to ask ourselves if those who will be most impacted by it, a lot younger than us, would view this as the way forward for the 21st century.  With stark global climate challenges facing us, and a target that now requires the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels, we need to think about the fundamental nature of our economy.  In a future where fewer physical journeys may be necessary, and people can work productively using onboard Wi-Fi and other technologies, building a greenfield, very fast train across large swathes of open countryside just feels like the wrong choice.

Second, the sheer scale of the project – the Chairman of HS2 estimates that the current scheme requires a total budget in the range of £72 to £78 billion in 2015 prices. With this price tag it is only right we keep asking ourselves whether this is a good way to spend so much money.  Compounding this however is the ongoing suspicion with which many continue to view the official cost estimates.  Whatever cost you adopt, a project of this scale needs to deliver significant benefits, and again, these have been the subject of much debate.  It is also probably time to have a more philosophical discussion around whether a project that relies so heavily on induced demand for its demand and benefits is appropriate in a world trying to become emission net zero by 2050.  The assessment of costs and benefits  also excludes the costs of many environmental impacts, and, somewhat atypically, is assessed against what is effectively a “Do-Nothing”, rather than the more traditional “Do-Minimum” option.  Is this really good enough to justify the expenditure and impact?

Finally, we need to think about the regional perspective.  Even if ultimately HS2 is a good investment, does starting in London and heading north deliver the best for the country?  Plenty of people don’t think so.  With a need to rebalance the UK economy regionally, now may not be the time to convert the West Midlands into a suburb of London.  What is more, at the moment, the project would start, not from central London, but from Old Oak Common. For those not familiar with this corner of West London, it is many things – but it is not central.  The reliance on CrossRail to get people to the centre of the city, or indeed, to distribute them more widely across the South-East, is troubling.  This has arisen, in our view, because the original project scoping was flawed, with the many real problems of delivery in a city like London glossed over.  There are many historical reasons why London has a ring of terminus stations, but they can all be overcome today.  Thameslink and Crossrail are showing the benefits of breaking this cordon, while the recent problems that arose during the upgrade at London Bridge Station show the true scale of the disruption to be faced for over a decade by those who have the misfortune to have to travel through Euston.

Whatever the reasons for how we have got to where we have, now is the time to stop digging the hole deeper and have a look around.  As such, we welcome the current review.  We think we the reviewers will find the world has changed, and HS2 as currently proposed, is not the way forward.  For what it is worth, our view is switching the focus to working north to south with deeper integration and focus on Northern Powerhouse Rail, and using that time to re-think the southern section, not least returning to the Kent alignment principles developed for HS1 and rethinking the route into (and across) London is the way forward.  It was said the review would be published in the Autumn, so we should all know about HS2 soon.

This thought piece had been written by Philip Bates, Head of Economic Infrastructure, and James Patterson-Waterston, Head of Cities and Infrastructure at Vivid Economics.

                                            Philip Bates                                                                                                      James Patterson-Waterston

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