MPs blast 'nonsense' assumptions on High Speed 2's benefits

12:30pm Saturday 14th July 2012 in Politics By James Nadal

MPs blast 'nonsense' assumptions on High Speed 2's benefits MPs blast 'nonsense' assumptions on High Speed 2's benefits

A SCATHING report has been produced by a committee of MPs into Government claims about the benefits of High Speed 2.

The Public Accounts Committee has branded some of the Department for Transport's assumptions about how the £33bn scheme will help the economy as 'nonsense' and 'untenable'.

A study into the completion and sale of High Speed 1 and what lessons it provides for HS2 makes grim reading for transport chiefs.

Criticism of the first high speed rail scheme centred around the fact taxpayers have so far spent £4.8 billion to cover the debt on the project – and will continue to shell out £10.2 billion over the next 60 years.

The committee concluded that the root of the problem was the “inaccurate and wildly optimistic forecasts for passenger numbers”.

Campaigners have claimed the same inaccurate predictions have been made on HS2.

Committee chair Margaret Hodge said such 'costly mistakes' must not be repeated with HS2.

She said: “Before going ahead with HS2 we need a robust cost benefit analysis.

“Some of the Department's assumptions about the benefits of faster travel are simply untenable.

"For example, the time business travellers save by using high speed rail is valued at £54 per hour yet the time commuters save getting to and from work is only valued at £7 per hour.

"It is difficult to see how this can be justified.

“The Department also assumes that all time spent on a train is unproductive.

"And unrealistic assumptions about ticket prices act to exaggerate passenger demand forecasts.”

The DfT admitted it had ignored investment in broadband video-conferencing and other alternatives, Mrs Hodge said.

“It is nonsense that the Department does not have a full understanding of the wider economic impact and regeneration benefits of transport infrastructure, including HS1, to inform future investment decisions.

“The Department must revisit its assumptions on HS2 and develop a full understanding of the benefits and costs of high speed travel compared to the alternatives."

The true benefit to the taxpayer and economy has come under increasing scrutiny in Parliament recently, with this report being the latest blow.

The DfT stressed in a statement that the report acknowledges HS1 is an important part of the rail infrastructure.

It said: “Our passenger forecast modelling has improved significantly since the original work for HS1 over 20 years ago, with better understanding of what drives passenger demand, better computer modelling and more computer power to do it.

“Network Rail predicts the West Coast Main Line will be full by the mid 2020s and HS2 presents the most effective solution to this looming capacity crunch facing our rail network. "This is in addition to the jobs, regional regeneration and improved connectivity the project will deliver.”

Comments (12)

1:07pm Sat 14 Jul 12

washondo says...

Perhaps MPs should now enquire into how DfT could have arrived at the HS2 conclusion, and take action to recover the money already wasted from the lobbyists involved.
Perhaps MPs should now enquire into how DfT could have arrived at the HS2 conclusion, and take action to recover the money already wasted from the lobbyists involved. washondo

6:38pm Sat 14 Jul 12

padav says...

Yet more "smoke and mirrors" propaganda from the Bucks Free Press(BFP) - one could hardly expect BFP to print an article critical of their reader's narrow self-interest driven agenda could you? Fact is no railway will ever pay its way entirely through the fare box - the Public Accounts Committee is playing politics (just like everyone else with a view on HS2) - they know very well that HS1 has in fact been a very good deal for the UK taxpayer, delivering the best part of £20bn in measureable economic benefits (£2.1bn of that being in the form of cash for the sale of a 30year renewable lease) but because the bulk of this figure is not directly tangible, it's possible to make the highly selective claim that the taxpayer is still forking out. Railways form part of the "Commons" - infrastructure we invest in for the general public good - there is virtual conensus about the pressing need for future investment to significantly increase capacity - so which would you rather have; a) A High Speed Railway or b) A private toll funded eight lane motorway - option b) will surely constitute a lesser direct burden on the public purse but I'd like to think that the wider British public presented with this hard choice will overwhelmingly opt for a) Of course if you happen to live in Buckinghamshire and the approved Route3 pathway of HS2 comes right through your backyard it's easy to understand why you like the idea of option a) presumably because you hope this (much more environmentally damaging) alternative won't be anywhere near you?
Yet more "smoke and mirrors" propaganda from the Bucks Free Press(BFP) - one could hardly expect BFP to print an article critical of their reader's narrow self-interest driven agenda could you? Fact is no railway will ever pay its way entirely through the fare box - the Public Accounts Committee is playing politics (just like everyone else with a view on HS2) - they know very well that HS1 has in fact been a very good deal for the UK taxpayer, delivering the best part of £20bn in measureable economic benefits (£2.1bn of that being in the form of cash for the sale of a 30year renewable lease) but because the bulk of this figure is not directly tangible, it's possible to make the highly selective claim that the taxpayer is still forking out. Railways form part of the "Commons" - infrastructure we invest in for the general public good - there is virtual conensus about the pressing need for future investment to significantly increase capacity - so which would you rather have; a) A High Speed Railway or b) A private toll funded eight lane motorway - option b) will surely constitute a lesser direct burden on the public purse but I'd like to think that the wider British public presented with this hard choice will overwhelmingly opt for a) Of course if you happen to live in Buckinghamshire and the approved Route3 pathway of HS2 comes right through your backyard it's easy to understand why you like the idea of option a) presumably because you hope this (much more environmentally damaging) alternative won't be anywhere near you? padav

7:29pm Sat 14 Jul 12

wayneo says...

Blimey, talk about throwing his trains out of his pram. Why don't you just accept that you and the other pro HS2 contributors have been rumbled Padav? You accuse the readers of having a " narrow self-interest driven agenda" (whatever that is), maybe, the BFP and its readers are not stupid enough to be fooled by the figures and claims being put out by the Government.
Blimey, talk about throwing his trains out of his pram. Why don't you just accept that you and the other pro HS2 contributors have been rumbled Padav? You accuse the readers of having a " narrow self-interest driven agenda" (whatever that is), maybe, the BFP and its readers are not stupid enough to be fooled by the figures and claims being put out by the Government. wayneo

8:17pm Sat 14 Jul 12

Eachban says...

This is just a committee of MPs who are no more able to properly assess this than any other committee of MPs. This is little more than an opinion piece although they do have cross-party representation so there is some grounds for concern for the DfT.
.
If the NAO were to produce a damning report on the ridiculous assumptions, that would have some teeth.
Difference between professionals (albeit Civil Servants) and the kind of glory hunters that put themselves forward for election.
This is just a committee of MPs who are no more able to properly assess this than any other committee of MPs. This is little more than an opinion piece although they do have cross-party representation so there is some grounds for concern for the DfT. . If the NAO were to produce a damning report on the ridiculous assumptions, that would have some teeth. Difference between professionals (albeit Civil Servants) and the kind of glory hunters that put themselves forward for election. Eachban

9:30pm Sat 14 Jul 12

padav says...

What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record.
What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record. padav

10:54pm Sat 14 Jul 12

Malc London says...

You forgot C) A localised rail network serving commuters.

A fast train from London to Birmingham is of little benefit to most people.

A localised train service getting commuters off the road makes economic sense.

A train line that doesn't stop anywhere is just a folly.
You forgot C) A localised rail network serving commuters. A fast train from London to Birmingham is of little benefit to most people. A localised train service getting commuters off the road makes economic sense. A train line that doesn't stop anywhere is just a folly. Malc London

11:17pm Sat 14 Jul 12

washondo says...

padav wrote:
What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record.
"Blindingly obvious", "proven facts, on record"? As presumably the PAC report?
~
Tee hee.
~
Sorry, I understand that convention says LOL, but I just couldn't resist the pomposity of "blathering".
[quote][p][bold]padav[/bold] wrote: What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record.[/p][/quote]"Blindingly obvious", "proven facts, on record"? As presumably the PAC report? ~ Tee hee. ~ Sorry, I understand that convention says LOL, but I just couldn't resist the pomposity of "blathering". washondo

11:54pm Sat 14 Jul 12

padav says...

@Malc London - do you actually keep abreast of current affairs or just ignore those that inconveniently conflict with the bogus arguments you keep advocating? A centrepiece in the anti-HS2 narrative is the fabrication in which HS2's headline capital budget will suck vital investment away from the Classic Rail network, so the much leaked, forthcoming (Monday?) anouncement of record sums for the next five year control period (2014-2019), which of course overlaps the projected 2016 HS2 start date by some three years, has permanently eviscerated that particular anti-HS2 myth - in similar fashion the notion (advanced by you) that the UK could somehow move back to a pre-Beeching era network is drawn from that same well of fictious nonsense - of course it suits the anti camp to keep peddling this claptrap in the hope that an ill-informed public will buy into a storyline in which everyone will miraculously enjoy the benefits of a local rail line at the end of their street (though of course in this nirvana type scenario painted by anti-HS2 campaigners, the local lines in question will be invisible in terms of their environmental impact)?
@Malc London - do you actually keep abreast of current affairs or just ignore those that inconveniently conflict with the bogus arguments you keep advocating? A centrepiece in the anti-HS2 narrative is the fabrication in which HS2's headline capital budget will suck vital investment away from the Classic Rail network, so the much leaked, forthcoming (Monday?) anouncement of record sums for the next five year control period (2014-2019), which of course overlaps the projected 2016 HS2 start date by some three years, has permanently eviscerated that particular anti-HS2 myth - in similar fashion the notion (advanced by you) that the UK could somehow move back to a pre-Beeching era network is drawn from that same well of fictious nonsense - of course it suits the anti camp to keep peddling this claptrap in the hope that an ill-informed public will buy into a storyline in which everyone will miraculously enjoy the benefits of a local rail line at the end of their street (though of course in this nirvana type scenario painted by anti-HS2 campaigners, the local lines in question will be invisible in terms of their environmental impact)? padav

7:00am Sun 15 Jul 12

demoness the second says...

padav wrote:
What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record.
Whereas the planners and ( possibly MPs) and builders of HS2 are doing it purely altruistic reasons and are not thinking of money or self interest at all.
How noble :))))
[quote][p][bold]padav[/bold] wrote: What on earth are you blathering on about @wayneo - do you always ignore the blindingly obvious (ie. narrow self-interest = trying to frustrate a new trainline rather inconveniently coming through their respective backyards - are you actually taking any notice here?) because it's inconvenient for your biased viewpoint? The economic benefits flowing from HS1 are nothing to do with government output - they're a matter of proven facts, on record.[/p][/quote]Whereas the planners and ( possibly MPs) and builders of HS2 are doing it purely altruistic reasons and are not thinking of money or self interest at all. How noble :)))) demoness the second

9:09am Sun 15 Jul 12

kingsnewclothes says...

padavs "smoke and mirrors" are all in the camp of the hs2 supporters as the "pros" desperately try to justify a scheme whose economic case has been systemmatically destroyed. A scheme that the Financial Times calls a "Gargantuan Folly". Fortunately Margaret Hodge and th Committee of Public Accounts are not fooled. By the way the BFP reporting is a completely fair reflection of the PAC report. ................... PS ) Padav's £ 20 bn is really £ 17.6 bn from a 2009 report commissioned by London & Continental Railways before they failed for lack of international passengers ( only one third of expectations - that's the only certain thing about HS1). It is made up of £ 3.8 bn "transport benefits" ( the £ 2.1 bn "sale" goes into this category), £ 3.8 bn "wider economic benefits" ( dodgy ) and a round sum £ 10 bn for "regeneration". That is essentially the Present Value of a £ 25 k household income on 16,000 new homes in Kings Cross, Ebbsfleet, Straford ( olympics !!!! ) and Eastern Quarry ---- but the point is that these people have come from somewhere so it isn't a Net New Benefit. Were the report writers stupid or just deliberately trying to mislead ??
padavs "smoke and mirrors" are all in the camp of the hs2 supporters as the "pros" desperately try to justify a scheme whose economic case has been systemmatically destroyed. A scheme that the Financial Times calls a "Gargantuan Folly". Fortunately Margaret Hodge and th Committee of Public Accounts are not fooled. By the way the BFP reporting is a completely fair reflection of the PAC report. ................... PS ) Padav's £ 20 bn is really £ 17.6 bn from a 2009 report commissioned by London & Continental Railways before they failed for lack of international passengers ( only one third of expectations - that's the only certain thing about HS1). It is made up of £ 3.8 bn "transport benefits" ( the £ 2.1 bn "sale" goes into this category), £ 3.8 bn "wider economic benefits" ( dodgy ) and a round sum £ 10 bn for "regeneration". That is essentially the Present Value of a £ 25 k household income on 16,000 new homes in Kings Cross, Ebbsfleet, Straford ( olympics !!!! ) and Eastern Quarry ---- but the point is that these people have come from somewhere so it isn't a Net New Benefit. Were the report writers stupid or just deliberately trying to mislead ?? kingsnewclothes

1:18pm Mon 16 Jul 12

williamjames says...

HS2 is a 'vanity project' The recent announcement of improving the lines to Sheffield and further through electuification make the investment case even more dubious. Of course the shining example of HS1 is conveniently ignored by the fans of HS2.
HS2 is a 'vanity project' The recent announcement of improving the lines to Sheffield and further through electuification make the investment case even more dubious. Of course the shining example of HS1 is conveniently ignored by the fans of HS2. williamjames

11:52pm Wed 1 Aug 12

Chiltonians says...

williamjames wrote:
HS2 is a 'vanity project' The recent announcement of improving the lines to Sheffield and further through electuification make the investment case even more dubious. Of course the shining example of HS1 is conveniently ignored by the fans of HS2.
Not at all!

This completely illustrates that the government is putting its money where its mouth is!

It has said before that it wants to improve the country's railway system. It has now shown this commitment with £9bn.

Critics of HS2 have said that HS2 would take money away from investment into the current railways! However, the government stated previously that this isn't the case and that it would continue to invest in the UK's railway despite a commitment to spend money on delivering HS2. Actions speak loader than words!!

The government is clearly investing in a strategy for improved railway in the UK. This includes investment in upgrading the current railway and the investment in the much needed HS2.

Well done government - keep it up!
[quote][p][bold]williamjames[/bold] wrote: HS2 is a 'vanity project' The recent announcement of improving the lines to Sheffield and further through electuification make the investment case even more dubious. Of course the shining example of HS1 is conveniently ignored by the fans of HS2.[/p][/quote]Not at all! This completely illustrates that the government is putting its money where its mouth is! It has said before that it wants to improve the country's railway system. It has now shown this commitment with £9bn. Critics of HS2 have said that HS2 would take money away from investment into the current railways! However, the government stated previously that this isn't the case and that it would continue to invest in the UK's railway despite a commitment to spend money on delivering HS2. Actions speak loader than words!! The government is clearly investing in a strategy for improved railway in the UK. This includes investment in upgrading the current railway and the investment in the much needed HS2. Well done government - keep it up! Chiltonians

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