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Business Case for HS2 receive another setback

posted 7 May 2012, 10:57 by Tomo
The Department for Transport, sponsors of the Government's High Speed 2 train project, was forced to admit yesterday that the Business Case for the £32billion scheme now only delivers half the originally forecast benefits and will barely break even on the Government's own figures.

The DfT revealed that the latest updated 'Benefits Cost Ratio' i.e. the value for money for each pound of taxpayers money invested in the scheme, has now been revised down for the fourth time. The 'BCR' for Phase 1 between London to the West Midlands has declined from an original forecast in January 2010 of a return of 2.4 for every pound invested to only 1.2 now. Critically this is still based on the widely-refuted assumption that all the time spent by business people on a train is wasted. When an allowance is made for this, experts believe that the true BCR is nearer 0.9 i.e. HS2 will lose 10 pence for every pound spent on it.

Martin Tett, Chairman of the 51m alliance of 19 local authorities opposed to HS2 said: "The DfT is being forced to 'come clean' on the business case. Every time it has been reviewed, the value for hard-earned taxpayers' money has fallen and fallen. Normally the DfT wouldn't look at any business case with a return of less than 2, but here we have a project that barely breaks even and in reality will almost certainly lose an enormous amount of money. Yet again the DfT have tried to 'bury bad news'. Clearly they know that we would have 'flushed out' this information so they have decided to publish it quietly, deep in numerous reports.

"Fundamentally, this latest analysis proves that we have been right all along. Our prime objection has always been that you need a really good business case to compensate for doing so much damage to the environment. This confirms that HS2 has a catastrophically poor return for taxpayers. By contrast our alternative of upgrading the West Coast Mainline provides all the forecast capacity with a return on investment five times greater. At a time of national austerity HS2 is the wrong investment. We need to be investing in improving existing road and rail infrastructure across the whole country to get our economy moving. This project needs to be reconsidered urgently by the Government."

Clearly the debate on HS2 continues, and opposition by the 51m alliance continues.

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