Sunday 5 January 2020 11:40 am

MPs were 'misled' on HS2 cost, says former deputy of government review into project

Parliament was “misled” over the costs of the High Speed 2 rail project, according to the former deputy chairman of the government’s independent review into the line.

Lord Tony Berkeley said the cost of the project is “out of control” and could be as much as £107m, three times the original estimate, in his own dissenting report on the scheme.

Read more: Deputy chair of leaked HS2 review slams ‘whitewash’ report

He said MPs would not have agreed to it had they known the true cost, and said the official, government-sanctioned report written by former HS2 chairman Douglas Oakervee was “fiddling” with the numbers to force the project through.

Berkeley, a civil engineer by trade, subsequently refused to sign the Oakervee review, calling it a “whitewash” and “a very good marketing document for HS2”. 

As a result, he has published his own dissenting version.

He said there is “overwhelming evidence” that the cost benefits of the project had been overstated, and that the first part of the line was unlikely to open until 2031. That is despite the official date being a more optimistic 2029 for high-speed trains to start running between London and Birmingham. Berkeley added that the high-speed line would not reach Manchester and Leeds until 2040.

Meanwhile, the benefit to taxpayers is now “well below the break-even point” compared to how much HS2 will cost he said. 

HS2 has faced a string of delays and budget increases in recent years
HS2 has faced a string of delays and budget increases in recent years (HS2 Ltd)

Officials at the Department for Transport (DfT) and HS2 Ltd, the government firm building the rail line, were accused of a “lack of cooperation” with the review panel in the report.

Berkeley said the Oakervee review – a draft of which leaked in November – was “unduly influenced by promoters of the project”.

The draft report acknowledged that costs were likely to be more than the latest official estimate of £88bn, and Prime Minister Boris Johnson has predicted it could cost more than £100bn. 

But no government-backed analysis has put the price tag as high as the £107.9m predicted by Berkeley. Just six months ago, Theresa May’s government was still claiming HS2 would cost just £56bn.

A DfT spokesperson said: “The government commissioned the Oakervee review to provide advice on how and whether to proceed with HS2, with an independent panel representing a range of viewpoints.

“Lord Berkeley’s report represents his personal view.”

The HS2 route map (HS2 Ltd)

Asked whether the government was still committed to building HS2, Foreign Secretary Dominic Raab told Sky’s Ridge On Sunday programme: “Yes, the prime minister’s made it clear and we’ve got a review under way.

“We want to look at the best way to get value for money in relation to that substantial investment.

“We also want to make sure that we’ve got the best benefit from it in terms of the connectivity – not just in the south but in relation to the east, west in the northern region.”

Lord Berkeley, a former chairman of the Rail Freight Group, wrote: “Based on realistic estimates of costs and benefits, I believe that the benefit-cost ratio has fallen well below the break-even point of 1:1 and, with a detailed assessment of benefits, could fall to less than 0.6:1.

“This means that the taxpayer would receive only 60p of return for every pound that is spent on the project, which is clearly a poor investment return.”

Read more: Why Boris Johnson is wary of putting HS2 on the scrap heap

He added: “It is my belief that there is overwhelming evidence that the costs of the HS2 project are out of control, the benefits are overstated and that it potentially will not be delivered to Leeds and Manchester for another 20 years.

“There is also substantial evidence of poor project management and governance, and no sign that this problem will be resolved by the public bodies responsible for its delivery in time to give stakeholders and government comfort that it is wise to spend over £100bn on one railway project.”

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