06.01.17
Treasury committee chair claims HS2 demand forecasts lack credibility
More evidence is needed that the business case for HS2 is reliable and will deliver value for money, Andrew Tyrie MP, the chair of the Treasury Select Committee, has said.
Tyrie previously raised concerns about HS2 in a letter to Chris Grayling, the transport secretary, in September, saying it had the “weakest economic case” of all the current tranche of infrastructure projects.
The DfT subsequently published a business case setting the benefit cost ratio for the completed HS2 network at 2.7, placing it in the ‘high value’ category for the first time, due to a more rapid growth in passenger demand between 2011 and 2014 than predicted. If the new data proves to be inaccurate, the benefit cost ratio will fall to a ‘low value’ 1.1.
Tyrie said: “The department claims that it has been underestimating the growth in passenger demand in support of the economic case for HS2.
“Without this latest data, the business case suggests that the project will deliver low value for money, according to the department’s own guidance. In other words, HS2 would scarcely be worth the candle.”
He pointed out that HS2 has gone through six estimates of the growth in passenger demand in seven years, raising doubts about the quality of its data forecasting models.
In a new letter to Grayling, Tyrie called it “a serious concern” that HS2 had failed to provide an accurate prediction of four years’ worth of growth.
He asked the secretary what evidence supported the new predictions and whether he was confident that the growth in demand would not be reversed in the next forecasting period.
Tyrie also wanted to know what the department was doing to improve the accuracy of data used by HS2; if it knew what proportion of the travellers would be business passengers; and what impact a predicted downturn in economic growth would have on the passenger numbers.
A DfT spokesperson said: “We keep our modelling under constant review and our analysis has repeatedly shown HS2 will be high value for money and deliver more than £2 of benefits for every £1 invested.
“The economic benefit of HS2 has been recognised by MPs of all parties and is strongly supported by Northern and Midlands cities.”
(Image c. HS2)
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