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HS2 - a matter of value

Updated: Jun 19, 2023

HS2 the great rail link between London and the Northern Power House that is Manchester has hit many headlines but above all else the most dominant has been its predicted overspend, with its likely completion date being the second most dominant issue.

Lets deal with the over run first. It is a simple fact that almost every significant civil engineering project over runs. Those that do not over run are possibly the result of clever manipulation. We see this in two areas: The first is fictional on the bridge of the Starship Enterprise where the chief engineer Scottie admits to Captain Kirk that he preserves his reputation as a miracle worker by over estimating the time needed for repairs which he then exceeds. The second is a conversation I had many years ago with Dave Wetzel who said that when he was dealing with Transport for London improvements he refused to give a deadline or accept one because if they did all that would happen is that he would say he needed more time than he needed to be on the safe side or they would be just set up to fail and this would be used as a stick to beat people with. He believed that if the right people were doing the work the job would be delivered. I believe to have such faith in people is correct.

The first issue that keeps repeatedly hitting the headlines of overspend is more thorny. Overspend on all government infrastructure contracts is common and I believe this may be a by product of a lack of investment in people in government that are capable of planning, costing and effecting delivery of such schemes. Without the right skills they may rely upon external technical advisers, but will not be able to effectively question the advice given. Equally, tendering is beset with pitfalls as firms may be tempted to make low tenders to get a job rather than realistic ones. An average tendering process may reduce this risk.

The simple reason for overspend on HS2 may be that when the project was first started all potential costs could not be predicted because of the huge scale of the project. To get support for such a project an acceptable figure may be preferred even if this is repeatedly exceeded.

However, when looking at overspend of such a large project are we looking at the wrong end of the telescope? Instead, should we be looking at the value of such a project? We all must agree that a cost benefits exercise only works when all costs and benefits are financial. That is not the case with HS2. We must recognise that something can have a value if it satisfies a need, and needs are more than practical.

In identifying the true value perhaps we need to go back and look at Britain’s first motorway the M1 that was built to link London to Leeds. Would any right-minded person argue that we should not have this road today? The whole nation and its economy has benefitted from the spine that is the M1 running the length of the country. The cost implications of being without this road are huge, even though it to was a project that took decades to deliver and over ran original cost expectations. The benefit of any such project, whether it be the Humber Bridge, The Channel Tunnel or HS2 has to be viewed as a benefit for the future.

However, HS2’s value does have one significant problem. Its value has been sold to us on the grounds of improving passenger times between Manchester and London. Most train users are middle class commuters and business travellers. For most people the use of a train is a luxury and most working-class people use a bus in urban areas and suburbs and a car in rural areas that are ill served by public transport. Therefore, if we look at the primary benefit of HS2 being to rail passengers this excludes most ordinary people upon which its value is lost.

Time alone will tell whether we have rightly assessed the true value of HS2 and whether it has been worth the cost.

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