Our submission to the Public Accounts Committee focuses on the importance of ensuring the HS2 line terminates at Euston without delay, without compromising HS2’s operational integrity and without burdening the project with ill-judged private sector funding arrangements. It also sets out why abandoning HS2 Phase 2a would represent poor value for taxpayers’ money and jeopardise the UK’s reputation as a place for future investment in large scale infrastructure projects.
In both instances, HSRG’s primary concern is that decisions are made with the long-term future in mind, and with the opportunity for future Governments to revisit the Prime Minister’s statement of October 4th, so that the opportunity to derive best value from the committed expenditure on HS2 Phase 1 is not lost.
Delivering HS2 to Euston
HSRG welcomes the Government and Prime Minister’s intention to ensure Euston, not Old Oak Common, is to be HS2’s London terminus. Delivering the project’s full potential in terms of economic and social benefit is contingent on the line reaching central London.
Contractors and HSRG members Skanska, Costain and Strabag (SCS), are already well under way delivering tunnels going west of Old Oak Common. In less than a year’s time, they will have completed this, and the logical step would be for them to immediately begin tunnelling east from Old Oak Common, toward Euston and this is indeed their stated intention (see ref 1). This would be quicker and more cost effective than delaying the tunnel work and resuming it at a later date. We urge Government to ensure the delivery of HS2 infrastructure to Euston follows seamlessly on from the completion of tunnelling west of Old Oak Common in this timely, cost-efficient manner.
We are concerned by the possibility that the Euston HS2 station and its approaches might be re-specified to save budget and/or allow additional commercial development with an attendant loss of operational flexibility and capacity for the new railway. Limiting Euston to just six platforms, for instance, would limit capacity. The design of station approach with a ‘crossover box’ remains essential, especially given that without Phase 2a, there will be a significant operational constraint at the northern limit of the HS2 route. Creating a second pinch point at its southern limit is a recipe for poor operational resilience and poor service punctuality, diminishing the very gains HS2 is designed to provide and eroding its public value.
Repercussions of phase 2a land sale on HS2 project: potential risk to the taxpayer
The high speed rail industry is committed to delivering the first phase as efficiently as it can, whilst continuing to make the case that this should be just the beginning of a network that reaches Manchester, Leeds and other cities. HSRG and our industry partners stand ready to work on those future developments. Scrapping Phase 2a (West Midlands-Crewe) would mean HS2 services north of Lichfield having to operate at lower line speeds than today’s Pendolino train services to reach Manchester, Liverpool and Glasgow.
Loss of value from premature land re-selling
The High Speed Rail Group (HSRG) has undertaken its own analysis of the Government’s apparent intention to sell off the land purchased for HS2 between Birmingham and Crewe. The analysis showed that the land sell-off could cost the taxpayer at least £100m compared to the price paid for the land.
Land sale losses
The government has purchased 2,900 acres of land between Birmingham and Crewe, costing £205m. The overwhelming majority of this is agricultural land. According to Savills’ respected rural land values index, average agricultural land values in the West Midlands are £9k per acre, meaning the 2,900 acres can be expected to achieve just £26m in sales.
Additional buildings and other infrastructure on the land could also be sold, but we estimate this would optimistically only realise a further £75m, taking the likely expected income from land sales to around £100m. This would mean a likely £100m loss to the taxpayer should Government proceed with its plan to sell the land “within weeks” as proposed in its Network North plan.
Source: HSRG analysis
Given the risk of loss to the taxpayer, the view of HSRG is that these land sales should only proceed after a full consultation with local authorities, businesses and rail stakeholders in order to avoid unintended consequences. A full and proper process should be put in place to avoid loss to the taxpayer.
Alternatives to cancellation of phase 2a come at substantial cost
It would be theoretically possible for a new (high speed or otherwise) rail connection between Birmingham and Manchester to be built along a different alignment. However this could happen only after having restarted the process of gaining fresh Parliamentary Powers. This might take, say, 6 years of work from now (based on experience with HS2 phases to date). Such a proposition would need to have a good answer as to why any new replacement alignment is better than the original. As of now, there is no suggestion that the Phase 2a alignment is in any way deficient, and all other possibilities have already been considered before it was selected.
Curtailing Phases 2a (and part of 2b) of HS2 will result in worse connectivity and fewer services between Manchester and Crewe, and the loss of significant journey time benefits across the length and breadth of the UK. However, there is another additional drawback to scrapping Phase 2a in particular: the additional spend that will be necessary on any alternative to HS2. An alternative solution to proceeding with HS2 infrastructure as long planned will require billions to be spent on essential upgrades to existing West Coast main Line infrastructure, with associated passenger disruption and increased costs to the taxpayer.
As the Integrated Rail Plan stated (see ref 2), accommodating more freight and passenger train paths on the West Coast Main Line requires delivering new track capacity. A cut-back Phase One-only version of HS2 would see six tracks from London to Handsacre Junction (four West Coast Main Line + two HS2) funnelled onto just four tracks, and then, just a few miles further north, squeezed down again, onto just two tracks. An existing West Coast Main Line bottleneck, in other words, will be made even more problematic. The public value and benefit of the existing WCML as well as HS2 will be diminished as a result.
Absent Phase 2a, the scope to operate more freight trains over the nation’s busiest railfreight corridor (which will be essential in future according to the Chartered Institute of Logistics and Transport), will be severely compromised if HS2 services north of Birmingham are to be added to the service mix. And if they are not, HS2 Phase 1 will be left operating perhaps just 3 trains hour in each direction – a London-Birmingham super-shuttle, with no suitable onward northward connections from Curzon Street station in Birmingham.
In conclusion, any calculation as to the cost savings made from cancelling Phase 2a needs to recognise the likely need for further projects as once envisaged in the West Coast Route Modernisation project completed some fifteen years ago. Such works can be disruptive to implement, with lengthy service diversions to make them feasible. Government has previously examined all such alternatives prior to deciding to proceed with HS2 Phase 2a, and accelerate its delivery to be close to that for Phase 1. In our view, Phases 1 and 2a are operationally inseparable.
Cancelling Phase 2a represents very questionable value for money and against any conceivable capital cost saving account needs to be taken of:
- The likely substantial costs of mitigation measures to relieve the crucial bottlenecks that Phase 2a would have bypassed
- The likely losses arising from disruption from works taking place ‘on-network’ rather than away from it
- The wider costs arising from an inability to attract more travel (passengers and freight) to switch from car (and short haul flights) to electrified rail, with attendant increased congestion on parallel motorways (including the M6), additional highway accidents and worse overall carbon and air quality outcomes
- By forcing HS2 operation through an existing bottleneck, worsening service reliability, and so less punctual trains, both for existing WCML services and new HS2 services
- The extension of HS2 journey times north of Birmingham by around 15 minutes
- The lost opportunity to benefit the cities and towns of the North of England (and Scotland and North Wales) from the substantial connectivity benefits HS2 was expected to bring and the boost to investor confidence and regional economies in these parts of the country, the type of gains attributable to HS2 which, according to West Midlands Mayor Andy Street, are already apparent in Birmingham and its surrounds.
These consequences may be unintended but they are substantial and are likely to run into a public sector cost of billions of pounds, offsetting a substantial proportion of the supposed savings from cancelling Phase 2a without delivering even a fraction of the benefits.
Wider repercussions of phase two land sale and failure to deliver HS2 to Euston
The recent statements on HS2 have already damaged the UK’s reputation as a place to invest. When looking at the other projects proposed under Network North, it is clear that there will be further concerns about whether they will proceed as stated, given the experience with HS2 which is a much further developed project. Inevitably, the additional risk that Government may change its mind (even after 15 years of cross-party consensus, as has happened with HS2) will be ‘priced in’ by bidders seeking to deliver future infrastructure projects in the UK.
Conclusion
The Group’s belief is that in the case of both Euston station, and the land earmarked for the phase 2a part of HS2 north of Birmingham, sensible long-term solutions should be found which keep options open for the future. Whilst the Government may say they cannot or wish not to fund HS2 north of Birmingham today, we believe the option to build it in future, when public finances allow, should be retained.
Ref 1 – https://www.standard.co.uk/news/transport/hs2-tunnel-euston-contractor-old-oak-common-rishi-sunak-b1119226.html
Ref 2 – Integrated Rail Plan, November 2021: “unlike the West Coast Main Line, there remains potential to improve journey times and further increase capacity on the existing network”