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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Graham Nalty   06/01/2017 at 19:06

The benefits of HS2 are very severely limited by the poor choice of route and station location. Job creation is best served by bringing HS2 trains into as many city centres as practical, and using HS2 to connect between our largest cities, rather than as a line geared to providing the fastest service to London at the expense of connections between cities other than London. HS2 offers very little connectivity between Midlands and Northern cities other than Leeds - Birmingham and Manchester.

Chris M   07/01/2017 at 06:38

Tyrie is a virulently anti-HS2 MP, one of just 40 or so who seem to be very hostile towards this infrastructure scheme and many others. He has voted against it at every stage of the hybrid bill process, defying the government whip. Recent pronouncements he has made about the business case and classic line upgrade alternatives suggest that he is wilfully ignorant of the huge number of reports and studies that are available online for everyone to see. Instead he keeps repeating that ''there is no evidence'' like a parrot! He even has the cheek to moan that HS2's assumed passenger growth rate has proven to be too low in reality - which actually underlines precisely why HS2 is going to be needed soon! Graham - you forgot to add Sheffield, Preston, York and Newcastle. All will be linked directly to Birmingham, and HS2 will even give NPR a fast service from Sheffield to Leeds. It clearly does a lot more than serve London. As for why doesn't it link more of the northern cities together? It is essentially a north-south line, how would that be possible without some crazy doglegs? HS2 cannot be faulted for failing to provide a route from East to West (Liverpool-Manchester-Leeds). That is the job of Transport for the North and the route is not suitable for high speed rail anyway - 140mph should be more than sufficient. I've already shown that HS2 solves the Leeds - Sheffield issue - that alone is a big bonus.

Lutz   08/01/2017 at 19:42

The validity of many of the reports supporting this project are questionable so the DfT is not alone. However the biggest concern is that the cost estimates are weak, and not current; it is doubtful that the project can be delivered within the existing budget, and that is before all the necessary add-on projects are taken into account that will be necessary to meet the proposed objectives.

Graham Nalty   10/01/2017 at 18:33

It is when the details are examined that HS2 falls down. HS2 will do a lot of good, though its benefits will not be as widespread as is necessary to justify its cost. For Chris M's benefit, I did try to keep my contribution short. But Birmingham to Sheffield is almost certainly to be quicker via Derby as there will be no economic justification for Birmingham to Sheffield directly via HS2 and a change at Toton will add at least 15-20 minutes. Even Greengauge 21 has questioned the latest route change that avoids Sheffield. If the line goes so far East, why not serve Doncaster? It would be cheaper to build HS2 alongside the ECML than its proposed new route. And surely it would be better to serve Leeds and Sheffield with the same trains? HS2 could achieve so much more is common sense was applied.

Moomo   13/01/2017 at 09:59

The real problem with HS2 is that it continues to be obsessed with "reducing journey times" at the expense of providing additional connectivity, thus ensuring that there will be little new capacity on the legacy network because legacy trains will still need to run between Manc/Leeds and London in order to serve all the places that HS2 misses out: e.g. Wolverhampton, Stockport, Macclesfield, Stoke, Coventry, Wakefield, Doncaster, Peterborough, Rugby, Nuneaton, Tamworth, Milton Keynes, Leicester etc., etc., etc.

Dave Thomson   18/01/2017 at 15:06

The remaining WCML service can all run at much similar speeds and stopping patterns because "space" in the timetable doesn't need to be created for the intercity express services (then on HS2.) Thereby releasing additional capacity on the existing lines.

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