HS2 Project Faces Escalating Costs and Delays
The government remains entrenched in the sunk-cost fallacy regarding the HS2 project. Following a 15-month review by the new chief executive, transport secretary Heidi Alexander announced that HS2's costs have surged to £106bn, with train services potentially delayed until 2039. Alexander described the original design as a
“massively over-specced folly”and characterized the increases in time and costs as
“obscene”. The project may be the most extravagant white elephant in British history, surpassing even Donald Trump’s White House ballroom and Dubai’s Burj Khalifa in scale and waste.
Transport Secretary’s Criticism and Project Management
This week, Alexander, the ninth transport secretary since HS2 was proposed, expressed her frustration with the project. Despite being in office for 18 months, she appeared surprised by the department’s poor handling of the project. She pledged a management overhaul and a fresh approach to bring the project under control. Alexander’s remarks, delivered to the Commons, highlight the contrast with other public sectors, such as hospitals, schools, care homes, and prisons, which have suffered from underinvestment during the same period.
HS2’s Origins and Criticisms
HS2 remains a problematic and unnecessary railway. There are already sufficient fast trains to Birmingham, and alternative methods exist to increase capacity. The project originated as a vanity initiative of the David Cameron coalition government. Andrew Gilligan, former Downing Street HS2 expert, stated 18 months ago in the Sunday Times that
“HS2 was certain to fail from the start,”citing the wrong route, speed, and termini, and criticized the failure to connect HS2 with HS1.
Cost Escalation and Political Failures
Large-scale projects like HS2 often experience significant cost escalations due to complex contracts and consultancy involvement. The project has benefited from the political narrative that every expenditure is an investment and pro-growth. Responsibility for the project’s failures lies with successive prime ministers who lacked the resolve to halt it. Cameron ignored warnings, Boris Johnson hesitated despite favoring cancellation, and Rishi Sunak worsened the project's value for money.
Civil servants and advisers were overwhelmed, the National Audit Office was lenient, and local leaders such as Andy Burnham failed to oppose HS2 in favor of local rail improvements. Rail services across the Pennines have deteriorated.
The Case for Immediate Cancellation
The long-avoided decision is to stop HS2 immediately. Defenders argue the £44bn already spent should be considered sunk costs and that continuing will yield benefits. Keynes’ observation that some benefit from being paid to dig holes and fill them in is cited ironically.
The HS2 company claims cancellation costs could exceed completion costs due to compensation. However, this is disputed, as compensation is unlikely to match the £60bn or more planned expenditure. Proceeding is not better value than redirecting funds elsewhere.
Current Progress and Potential Benefits of Cancellation
No HS2 track has been laid yet; Mark Wild, the project leader, admits track laying may not begin before 2029. By comparison, Robert Stephenson completed the London to Birmingham railway in under five years. Only 12% of tunnels and 11% of the 169 bridges have been completed. Cancellation would free valuable urban sites around London Euston and Birmingham’s Curzon Street, currently in disrepair, and allow redevelopment of the chaotic Coleshill interchange.
Political Challenges and Alternative Investments
The primary obstacle to cancellation is political courage, which is currently lacking. Alexander could announce cancellation and redirect funds to essential rail investments such as re-signalling, electrification, and urban transit. Britain has nine tram or metro networks compared to France’s 30 and Germany’s 60; cities like Leeds could benefit from new systems.
Alternatively, the £106bn planned for HS2 could fund hospitals, schools, care centers, youth clubs, and courtrooms. It is unreasonable to consider these uses less worthy than faster travel for a few affluent Birmingham residents.
Simon Jenkins is a columnist.
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