The HS2 project has been panned by a House of Lords Committee, saying the project needs a 're-think' as the costs of the project are 'out of control'.
The Committee finds that the Government has made little progress in answering the questions raised in its 2015 inquiry.
In the 2015 Economics of High Speed 2 report they stated that there was a strong case for improving regional rail links in the north, but the Government had failed to consider whether such a scheme was a better investment than HS2.
The Committee finds evidence that the costs of HS2 appear to be out of control. Sir Terry Morgan, former Chairman of HS2 and Crossrail, told the Committee that "nobody knows" what the final cost will be. The Committee is concerned that if the costs of the London-Birmingham section overrun, the northern sections may not be built.
Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said:
"Commuter services in the north of England are badly overcrowded and reliant on ageing trains. Rail connections between northern cities are poor. As the Committee suggested in its 2015 report, rail infrastructure in the north should be the Government’s priority for investment, rather than improving north-south links which are already good. The north is being short-changed by the Government’s present plans, especially as construction on HS2 is starting in the south. Any overcrowding relief from HS2 will mainly benefit London commuters."
"The plans for Northern Powerhouse Rail should be integrated with the plans for the northern section of HS2, and funding for the project ringfenced. This will allow rail investment in the north to be prioritised where it is most needed."
"The costs of HS2 do not appear to be under control. It is surprising therefore that the Government has not carried out a proper assessment of proposals to reduce the cost of HS2—such as lowering the speed of the railway or terminating in west London rather than Euston—which the Committee recommended in 2015. A new appraisal of the project is required."
"If costs overrun on the first phase of the project, there could be insufficient funding for the rest of the new railway. The northern sections of High Speed 2 must not be sacrificed to make up for overspending on the railway’s southern sections."
Other Suggestions from the report include:
-A new appraisal of the business case for High Speed 2, which takes account of the issues raised in this report, should be published urgently, and before the final decision to proceed with High Speed 2
- The Government and HS2 Ltd should update and publish analysis of the cost possible saving from lowering the maximum operating speed of the railway.
-New analysis of High Speed 2, which takes account of the transformative effects that new infrastructure can have, should be published alongside the full business case by the end of 2019.
An HS2 Ltd spokesperson said in response to the report:
“We thank the Lords Economic Affairs Committee for its interest in Britain’s new high speed railway and will consider their recommendations as the project progresses.
“HS2 will generate around £92 billion in benefits to the UK economy, with local economic plans forecasting the creation of 500,000 jobs and nearly 90,000 new homes. Work is underway at over 250 locations and the scheme already supports more than 7,000 jobs directly and across our supply chain.
“As stated in the report, HS2 is fundamental to the delivery of Northern Powerhouse Rail. It is also vital to the Midlands Rail Hub, and will transform rail journeys across the Midlands and North, giving passengers thousands of extra seats every day, and taking freight of the roads. As regional leaders across the Midlands and North have repeatedly said, it’s not a case of either or, it’s both.
“We are determined to deliver a railway that is value for money for the taxpayer, and a project that will reshape the economic geography of the country. We have strengthened our controls and are actively applying lessons learnt from recent infrastructure projects to ensure we have the most cost-effective approach.”