Blog Archives

Bad decisions by government: 40 – support for HS2, case unproven

hs2 kelvinhopkins debate 2011

Joining our grim litany of bad decisions by government (on fracking, social housing, destroying Libyan fresh water pipeline, etc) is a 130-page report on the HS2 project, just released by the House of Lords Economic Affairs Committee.

hs2 logoThis adds to concerns over HS2’s value for money expressed by the National Audit Office, echoing a similar report published by the Commons Public Accounts Committee in January. None of the media reports seen – as is often the case – provide a link to the report, which we now offer: Report: The Economic Case for HS2 (HTML)

Its verdict:

Lord Hollick, chairman of the Lords’ committee, said overcrowding on the West Coast Main Line was largely a problem confined to Friday evenings, weekends on long-distance trains and London-bound commuter trains.

Evidence showed long-distance trains to and from Euston were, on average, only 43% full and even during peak times were only 50-60% full.

He added that the Government has not carried out a proper assessment of whether alternative ways of increasing capacity are more cost-effective than HS2 and concluded that in terms of rebalancing the economy, London is likely to be the main beneficiary from HS2.

The FT noted that although the government claims the biggest beneficiaries will be business travellers, peers said the evidence used to calculate the magnitude of this benefit, an estimated £40.5bn, was “out of date and unconvincing”, with some of it dating from 1994.

On capacity – it continued – the peers criticised the transport department for a lack of transparency and said full information on railway use had not been made publicly available by the government on grounds of commercial sensitivity.

hs2 viaduct 2

No consideration of the social and environmental costs of the project was included in the report’s list of contents.

Sources

http://www.bbc.co.uk/news/business-32041167

http://www.ft.com/cms/s/0/0d46a2d8-d21e-11e4-ae91-00144feab7de.html#ixzz3VOMe33Vc – free registration

http://www.parliament.uk/business/committees/committees-a-z/lords-select/economic-affairs-committee/news/eac-hs2-press-release/ and video

VERY bad decisions by government – 29: privatising the work of the Audit Commission

eric pickles23jpgBefore referring to the decision of Communities Secretary, Eric Pickles to scrap the Audit Commission, protector of the ‘public purse’ which pays for local government, health, housing, police, fire and rescue and other public services, David Hencke questions the wisdom of doing this.

Will its work be done more effectively by private companies which are part of that corporate-political nexus (‘cosy relationships’) deplored by the Vested Interest in Politics people and the public in general?

Hencke says:

david hencke2“Basically Pickles wants to leave it to local councils, health trusts and the new NHS commissioning bodies to police themselves by appointing their own auditors, taking away a whistleblower hot line to the Audit Commission, and allowing big accountancy firms free rein to up their charges by picking off individual councils. It also allows even more cosy relationships to be built between the auditor and the local council and leaves whistleblowers nowhere to go”.

The Commission has already had to start outsourcing

In March last year it awarded the following contracts to:

  • Grant Thornton (UK) LLP, a total notional value of £41.3 million a year covering four contract areas in the North West, West Midlands, London (South) Surrey & Kent, and South West;
  • KPMG LLP a total notional value of £23.1 million a year covering three contract areas in Humberside & Yorkshire, East Midlands, and London (North);
  • Ernst & Young LLP a total notional value of £20 million a year covering two contract areas in Eastern and South East; and
  • DA Partnership Ltd a total notional value of £5 million a year covering one contract area in the North East & North Yorkshire.
The Commons Public Accounts Committee has come to some damning conclusions on what the government is about to do – see Hansard. Points include:
  • The government claims it will save £137m a year but the MPs say the figure is more likely to be £2.4m.
  • The audit regime will be fragmented and more complex.
  • The proposals for self-appointment of local auditors risk compromising the independence of audit.
  • There are risks of duplicating governance structures, losing economies of scale in audit fees, diminished quality of audit and increased tendering costs
It also stresses that there must be provision to enable auditor removal, whistleblowing and public interest reporting.

There is a full report by Hencke on the Exaro News website.