Nobody truly knows how much HS2 will cost. The official figure stands at £55.7 billion, but according to the National Audit Office (NAO) this “does not cover funding for all the activity needed to deliver the promised growth and regeneration benefits which is the responsibility of local authorities”.
The public are not buying it either. Polling indicates that support for HS2 is at a meagre 35 per cent, with just 9 per cent believing that the project will be delivered on or under budget. By all accounts this belief is not unsubstantiated. Ventures like this regularly overrun, with research showing an average rail project incurring a cost escalation of 45 per cent. Not too long ago the official estimate was £43 billion, and even that was an increase from the original projection of £33 billion. Analysis by the Institute of Economic Affairs show how costs could rise as high as £80 billion.
The Government is claiming that even with the latest cost forecasts, the project still delivers value for money since every £1 spent will create £2.50 worth of economic benefits. The benefit cost ratio may well be positive, but 1:2.5 is extremely poor benefit compared to most transport projects, particularly strategic roads.
HS2 is also extremely expensive even for a high-speed rail project. It is set to be at least 10 times the cost of a high-speed rail project in Europe.
The incoming government will have a golden opportunity to consign this white elephant to the dustbin.