NAO head cautions against ‘unrealistic expectations’ for HS2 following Brexit

Balancing HS2 with other major infrastructure projects will be more challenging than ever in light of the UK’s vote to leave the European Union, the head of the National Audit Office (NAO) has said.

Speaking at the Institute for Government last night, Sir Amyas Morse said: “We need to ask ourselves, can the public sector deliver Hinckley Point C, a third runway, HS2, a Northern Powerhouse, nuclear decommissioning, Trident renewal and Restoration and Renewal of the Palace of Westminster all at the same time?”

He added that the public sector had a tendency to “over commit” to infrastructure projects because of the desire of each government minister to “make his or her mark” by starting new projects.

He also said the sector suffers from “unrealistic expectations” and “optimism bias” about delivering projects at an appropriate cost.

For example, Sir Amyas said HS2 was “relying on developing a whole new, cheaper, supply chain” in order to stay within its planned cost.

A recent NAO report said that HS2 is behind schedule, and Sir Jeremy Heywood, the head of the civil service, is conducting a review of the project to try to ensure that it stays within its £55bn budget. This has led to cost-cutting measures such as plans for the line to stop at Sheffield Midland instead of Meadowhall.

Sir Amyas said these problems were exacerbated by the UK’s withdrawal from the European Union.

“Add to that our massive major projects portfolio, and my experience of watching the public sector at close quarters tells me the system could come to a halt under its own weight” he added.

“We will have set civil servants a Herculean task and set them up to fail. And none of us can afford that.”

This could mean civil servants being pulled away from existing projects to manage the changes to policy needed because of the UK’s withdrawal, as well as the increased possibility of Scotland becoming independent.

A report from Balfour Beatty, published yesterday, warned that the UK’s withdrawal from the EU is also likely to cause staff shortages and a loss of funding for major rail projects.

Clive Heaphy, HS2’s director of finance and operations, has also admitted that HS2 is “worried” about the long-term impact of the referendum result.

Sir Amyas argued that “a wider, overarching and imposed approach” from the government was needed to help reduce the number of commitments, which could involve “not adding projects, or cancelling existing ones”.

“Let's use this historic juncture to change the way we manage government,” he said, “and plan on a holistic basis so that ministers and civil servants can look across the whole of government activities and decide what is essential and what is not. This is crucial for achieving value for money.”

Sir Amyas’ speech comes as HS2 published its annual report and accounts for 2015-16, showing that it has successfully stayed within its growing budget as the project comes closer to its start date, with the HS2 Bill currently passing through Parliament.

Its budget for 2015-16 was £404.1m, compared to £230m in 2014-15, and it spent £352.9m, compared to £189.6m the previous year, achieving an underspend of £51.2m or 12.7%.

In his foreword to the report, Sir David Higgins, chair of HS2, said: “For HS2, the last year has been about becoming less of a concept, and more of a reality.”

(Image c. Stefan Rousseau from PA Wire and Press Association Images)

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Graham Nalty   22/07/2016 at 17:00

I would certainly say that HS3 / The Northern Powerhouse will do more for the rebalancing the economy than HS2 and linking our midlands and northern cities with faster trains will do much more to revitalise them than offering faster journeys to London.

Jb   22/07/2016 at 18:36

Is the long awaited realisation that some sanity is to be brought to bear on the astronomically costly and unnecessary HS2 project about to be announced? Not before time too, as it seems the project has already cost a significant sum which could have been put to better use elsewhere. Rail transport corridors need improvement now and I doubt we can afford to wait the years that HS2 would require to complete it – even if it were necessary – which it is certainly not given the relatively small size of our country. The few minutes shaved off journey times to placate the high speed enthusiasts “wanting to make their mark”, pales into insignificance by comparison to the need to increase capacity and connectivity for both passengers and freight in the short to medium term. This could be achieved by re-instating and developing some of the lines regretfully closed in the late 1960s, the displaced traffic from some of which is contributing to the present congestion of the WCML and other northern east-west routes. The huge dislocation and stress to places and hundreds of people along the proposed HS2 route could thus be avoided not to mention saving £bns which could be spent on the NHS, the Police, education and other social services.

Bill   23/07/2016 at 17:40

Whatever happened to the 140 mph Virgin trains? Surely for a fraction of the cost of the HS2 'money waster/vanity project', the WCML could be enhanced? That would allow London to Birmingham city centre to city centre times to match those of the proposed HS2 times. So much else to say about HS2, perhaps the new PM will cancel it, now? Well we can hope anyway that common sense will prevail with 'our' money. Bring on the Liverpool to Newcastle 140 mph railway!!!

David   24/07/2016 at 10:26

Bill. How on earth could a 140mph WCML match the journey times of a 200mph non-stop, purpose-built HSL? And do you not recall the ambition of the most recent West Coast upgrade? (hint: it was a disaster) If we're going to be building new LDHS lines, why on earth would it be through reopening long-disused and antiquated Victorian-built lines?

Jb   24/07/2016 at 11:20

The sugestion to re-open main lines north is to relieve pressure on the WCML by providing greater capacity. Obviously, they would no longer be "antiquated".

John Burns   26/07/2016 at 10:49

The first main line to be electrified was the WCML in the 1960s. Services from other lines were moved to it. Manchester trains went up the MML and over the Pennines; this city's service's were moved entirely onto the WCML. The Birmingham train went to London via the Chiltern Line and again this was moved to the WCML. Uprating and electrifying the MML and the Chiltern and moving the city services back to their original lines will eliminate congestion on the WCML south of MIlton Keynes - the only part of the line experiencing congestion. The Chiltern and MML are well overdue of being electrified and uprated. Of course have trains with in-cab signalling (which currently they do not) that permits them to run at 140mph (which they do being restricted to 125mph). This means the train to Manchester will only be around 12 minutes or so slower than using HS2. We can have the speeds and capacity on the existing network. All is there.

Lesf   27/07/2016 at 22:30

Thanks for an intelligent debate chaps. What is needed is an independent review of HS2 since it's a shadow of the original (ill-conceived) concept, vastly more expensive than we were promised and bereft of Meadowhall and the links to Heathrow and HS1. Obviously HS2 Ltd can't do an independent review because they're hooked up on their bizarre plan, so it has to be someone else. They will have to consider that the extra 10 million population we were told to expect, will not happen since the referendum. Thank God. And that rail freight shrank last year by 19% or 22% according to how you measure it. Start again. And don't jump to conclusions. Consider the whole country rather than one corridor. And ensure that all communities benefit, not a few at the expense of the many.

John Burns   29/07/2016 at 01:04

Lasf, HS2 if built should be no more than a backbone with access to cities via existing lines using existing stations. If that is adopted It will only be a line from London to just north of Northampton to alleviate capacity issues and add some speed. They may just take it to Crewe via Birmingham while they are at it and no more, as that will served many cities, including Scotland. The eastern leg of the 'Y' is not worth building as the MML and ECML, using modern 140mph plus trains, electrified with bottlenecks removed, will have very fast speeds with no capacity issues. If trains are moved back to their original pre 1960s lines, like Manchester and Birmingham, the Liverpool to Hull NPR (HS3) will make matters even better. Northern Powerhouse say a 'new' line is needed from Liverpool to Manchester - this will aid the Port of Liverpool. A tunnel under Manchester is needed for through trains as Manchester gets in the way of traffic from the west. Also a fast 'base' tunnel is needed under the Pennines which at the eastern portal can splay off to Sheffield, Leeds, Hull and Newcastle. A base tunnel is half a century overdue. This tunnel can be used to take trains to Manchester from the MML. It can also be used to take trains from one side of the country to the other in case of works on main lines.

Lesf   03/08/2016 at 14:40

John Burns, You're absolutely right that a HS line should access existing city-centre stations but that doesn't mean it needs to end near Northampton. The backbone you propose can progress northwards incrementally and has a much better chance of reaching Scotland east of the Pennines than HS2's hilly west coast route. In view of the plan to cut a few bends off WCML at high cost with little benefit, it seems they've already abandoned any hope of reaching Scotland via a new west coast line. West Mids is best served via the existing loop (4-tracked Rugby-B'ham) and the north-west via Woodhead. Seven times as many places will be linked compared with HS2's threadbare effort, and with half the tunnel it will be cheaper too. No need for Euro loading gauge since trains will never run from France without stopping for baggage and passport checks - and when you have passed through Customs, your train will have gone so you will get on another.

John Burns   09/08/2016 at 15:07

Lesf, I did actually say HS2 can extend to Crewe. But to those who keep stating the 'capacity' issue, HS2 only needs to branch onto the WCML north of Milton Keynes. HS3 from Liverpool to Hull, is the key. Get this completed with a 'base' tunnel under the Pennines emerging at Barnsley, and a tunnel under Manchester, then all that is needed is uprating the WCML, ECML and MML. To think that the MML is not even fully electrified show how backwards we are. Scotland can run a high-speed line down to the English border and then onto Carlisle using classic line. The mix of high-speed and uprated classic lines will give Scotland decent journey times. Pendolinos could be uprated to run at 160mph and above to run on the high-sped track and 140mph on classic using the tilt.

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