Secret State 24: HS2 overbudget revelations

Two ‘hidden’ reports see the light of day – how many more are buried?

In July, Andrew Gilligan reported that the HS2 high-speed rail project is “highly likely” to go as much as 60% over budget and cost “more than £80bn”. A Cabinet Office report by the government’s Infrastructure and Projects Authority (IPA), classified as “official-sensitive” and “not for publication”, described the scheme as “fundamentally flawed” and in a “precarious position”. A group of Conservative MPs, led by Jeremy Lefroy the MP for Stafford, mounted a new bid to cancel HS2.  

Is Britain’s own “deep state” once again covering up mistakes and denying access to critical documents (Carne Ross)?

Yesterday the FT reported that an official report by consultants PwC covering the second phase of HS2, from Birmingham to Leeds and Manchester, has been kept secret for the past two years. It alleges that Britain’s new £56bn high-speed rail line will cost taxpayers 25% more than similar schemes in other countries. The project was compared with more than 32 other high-speed rail projects, including the 621km Madrid-Barcelona line and the 301km Beijing-Nanjing line.

Since 2016 the management of HS2, which answers to the Department for Transport, has refused to publish the report, despite freedom of information requests from Lord Berkeley, a transport expert.

He said. “The fact that the government is embarrassed by their findings should not be a reason to withhold publication.” The findings included the following factors:

• HS2 will have 25 stations — far more than equivalent schemes abroad — and they are more likely to be in city centres.
• The 10-year hiatus between the UK’s first high-speed line and HS2 meant that the UK did not have the “base, industry and knowledge to deliver the project easily”.
• The UK has a higher population density than some equivalent countries and so has had to pay higher land values, greater compensation and carry out more extensive environmental mitigation,

The benefits of HS2 are becoming harder to discern

The Treasury’s own Infrastructure and Projects Authority has given HS2 an “amber/red” rating for each of the past six years, meaning there is a “high risk” of it not delivering value for money.

A recent report by the European Court of Auditors (ECA), which monitors value for money, found that high-speed trains rarely run at the speed they are designed for, with most running at just 45% of top speed, with none running above 250km/h. The study of 10 European lines found that the decision to “build high-speed lines is often based on political considerations, and cost-benefit analyses are not generally used to support cost-efficient decision-making.”

The ECA found that only one of the 10 routes, from Paris to Lyon, have been profitable if construction costs were taken into account.

 

 

 

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Secret State 23: leaked Cabinet Office report, HS2 “highly likely” to go 60% over budget. HS2: no comment

Andrew Gilligan reports today in The Times that the HS2 high-speed rail project is “highly likely” to go as much as 60% over budget and cost “more than £80bn”, according to a Cabinet Office report by the government’s Infrastructure and Projects Authority (IPA), which describes the scheme as “fundamentally flawed” and in a “precarious position”.

The report, classified as “official-sensitive” and “not for publication”, dated December 2016, was written by Paul Mansell, an IPA adviser embedded in HS2. ‘Leaked’ to The Sunday Times, it warns that chaos in the project — officially costed at £56bn — threatens wider public spending, with a “very high opportunity-cost impact across other government departments”.

A group of Conservative MPs, led by Jeremy Lefroy the MP for Stafford, is mounting a new bid to cancel HS2. Last week they met Chris Grayling, the transport secretary.

An earlier June article by Andrew Gilligan referred to documents seen by The Sunday Times. Doug Thornton, HS2’s former head of property, said the HS2 high-speed rail project put him under “tremendous pressure to accede to an enormous deceit” that the official budget for buying land and buildings was accurate. He alleged that it was wrong by billions of pounds; the budget was based on “rudimentary map-based analysis by interns” and contains errors in the tens of millions even on single properties. HS2 did not dispute the figures.

Thornton and Bruce are understood to have given extensive oral and written evidence to the National Audit Office (NAO), which confirmed that it is investigating HS2’s land and property budget.

Thornton was paid more than £200,000 a year and ranked two rungs below HS2’s chief executive. In the documents, he said he was sacked after refusing to “at worst, severely mislead” HS2’s own board about the state of the programme. The head of planning and performance, Andrew Bruce, was also placed on leave of absence 30 minutes before he was due to “present major budget, programme and capability issues” to the board, according to Thornton. The two men left in 2016 as the bill to allow HS2’s phase one, from London to the West Midlands, reached a critical stage in parliament. HS2 told MPs and peers that buying the 11,000 properties and plots of land needed to build this section of the route would cost £2.8bn, a figure it maintains to this day. However, Bruce had produced detailed calculations that the true cost of property in this phase alone would be £4.7bn. Thornton said HS2 may have “knowingly misled parliament”.

Thornton’s documents were passed to Lord Berkeley, a Labour peer and chairman of the Rail Freight Group. He said: “HS2 has been covering up and Chris Grayling knows that the budget is not deliverable. HS2 could not be reached for comment.

Rail News reports that after a request by the Department for Transport, consultant quantity surveyor Michael Byng, who created the method now used by Network Rail to cost its projects in the wake of major overruns, has prepared a 4000-page document analysing the costs of HS2. He concluded that the true cost of Phase One between London and Birmingham is likely to be at least £50 billion, compared with the official figure of £24.3 billion. This includes a one-third contingency allowance but not the cost of new high speed trains.

The cost of the whole scheme, including the extensions to Manchester and Leeds, is now said to be over £100 billion.

 

 

 

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Broken Britain 4: being sold piecemeal to foreign governments and companies

In April, Peter Hitchens eloquently described the way this country is being sold to foreign governments and companies:

“I don’t think any other nation would put up with this. Why do we? The most ridiculous is the way our trains – devastated by John Major’s mad privatisation scheme – are falling into the hands of foreign state railways. So, while the Government cannot bear to have railways run by the British state, it is happy to have them run by the German, Dutch, French or even Hong Kong state systems . . . in this country that invented the railway and once exported equipment and skills around the world.”(Right: Private profit from public loss: NIPSA 2013)

Hitchens summarises:

• Privatised railways’ jaws are clamped firmly to the public teat; when they fail they can just stroll away from the mess they have made.
• British Rail’s trains were faster and more comfortable. It looked after its track far better and – given the money – it would never have made the mess its successors are now making of electrifying the Great Western line, which is years behind schedule, partly abandoned and vastly over budget.
• In the 20 years to 2013, state subsidies to the rail sector roughly tripled in real terms, while fares continued to rise.
• My trains are almost always late, frequently very badly so.
• But they get more expensive all the time.
• those responsible are protected from us by call centres and unresponsive websites, which only talk to us when they want to.

Finally Hitchens adds: “Last week it emerged that SNCF is bidding to operate HS2, a pointless vanity line that should have been cancelled long ago but which the Government is too weak to abandon. So we might be hiring a foreign state railway to run a service we don’t even need, while Britain is full of sizeable towns with no railway station, which could be linked to the national system for a tiny part of the cost of HS2 . . . The idea that our rulers have any idea what they are doing, or can be trusted with our national future, is a joke. They’re just hoping the bailiffs don’t turn up before the Election. But if they do, what have we got left to sell, to pay our bills?”

Hines argues that the Treaty of Rome needs transforming into a ‘Treaty of Home’ that will allow peoples to protect what they hold dear

Rupert Read has described Colin Hines’ ‘feisty clarion call’ for a change of direction away from acquiescence in the deregulated world that spawned the financial crisis and towards protection of nature, workers, localities and sovereignty, resisting rootless international capital.

As Read says, Hines’ policy of Progressive Protectionism will surely be part of a socially and environmentally viable future: crucial thought-leadership away from the political dead-end of globalisationist fantasy.

 

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Read’s review (text here) will be published in the Ecologist, May/June issue, see Contents https://reader.exacteditions.com/issues/55993/spread/5

 

Wind of change? Witney by-election: congratulations to CTE and UNA

As Conservatives canvas vigorously in Witney, hustings were held at the High Street Methodist Church; but only candidates for the Conservatives, Labour, Liberal Democrats and the Green Party were invited.

Later, at Charlbury Memorial Hall, Churches Together in Charlbury and the West Oxfordshire branch of the United Nations Association organised a second hustings, inviting all the candidates standing in the by-election on October 20.

They included independents and other parties such as the National Health Action Party, represented by Dr Helen Salisbury (right), an Oxford GP & lecturer at Oxford University medical school, who fears that the current government is in the process of breaking up the NHS, inviting private providers to take over more and more services.

No picture including all candidates was found online; those who attended were independent David Bishop, who campaigns for better rural bus services, Robert Courts for the Conservatives, Duncan Enright for Labour, Liz Leffman for the Liberal Democrats, Larry Sanders for the Green Party (left), independent Daniel Skidmore, and Nicholas Ward, an independent candidate against the HS2 rail link.

16 questions were submitted by members of the 200-strong audience on Brexit but once candidates had explained their positions people asked for new topics to be discussed and the effects of climate change were next on the agenda. 

Key topics were:

• cuts to local NHS services,
• housing shortages
• the shrinking reach of rural bus services (one village with 800 homes has no regular public transport)
• grammar schools
• the refugee crisis
• housing levels in West Oxfordshire
• traffic levels on the A40
• Brexit,
• climate change
• affordable housing

Wind of change?

Martin Chapman, owner of a local grocery store-cum-restaurant, a long-standing Conservative voter and admirer of David Cameron, may have been speaking for many when he said: “I won’t be supporting the Conservative candidate. We are heading for a hard Brexit and we’ve had announcements like grammar schools with which I am really disappointed. It all seems to be going wrong. I’m backing the Lib Dems because we want politicians to work together for the best solution for the country. The decisions made in the coming months will have such a profound impact for a long time to come.”

Both Labour and Lib-Dem candidates are reported to have made a good impression – the outcome of this by-election may not be a foregone conclusion.

 

 

 

Spotlight on the civil service – 2: a civil servant speaks out

A civil servant commented on an article on this website with impressions of the civil service:

Our civil service needs thorough scrutiny; unelected civil servants are trusted to inform elected politicians informed and give impartial guidance. When things go wrong the politicians are left to ‘carry the can’, while the civil servants who gave the advice remain with jobs intact and safe from harm.

All aspects of civil service employment including recruitment, training, performance and progression are potentially deeply flawed and corrupt.

From my own experience this includes insidious and profligate managerial manipulation of targets and statistics, contentious priorities relating to treatment of staff, distribution of staffing resource, purpose and priorities of duties and workloads, and procurement.

Specific failings:

• IT systems are not fit for purpose, with lack of subsequent adequate support for staff who must use it.

• Poor staff training over perception of vulnerable customers and Work Programme participants.

• A fundamental lack of confidence caused by inadequate and divisive recruitment, performance, reward, progression and diversity policies.

• Misplaced loyalties, obligation and integrity among some managers and staff resulting in compliant acceptance of unethical behaviour.
• Prospects of individual reward, fear, internal politics and power of association lead to covering up wrongdoing and protecting those who avoid proper accountability.

Until this situation is reversed nothing will change for the better to improve our society.

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Perhaps beneficial change is on the way. The Economist reports that Oxford’s Saïd Business School and the Major Projects Authority (MPA), an agency set up by Britain’s governing coalition to work with the Treasury and other government departments to provide independent assurance on major projects, invited senior business figures to lead discussions and officials share ‘gripes’ with visiting permanent secretaries (the ministries’ top brass). These senior civil servants are some of the most discreetly influential people in Britain; they oversee costly projects ranging from HS2, a planned high-speed railway, to procuring aircraft carriers and a sensitive nuclear-energy deal with Beijing.

There is growing awareness that – as our correspondent said – when such projects go awry they cost a fortune and damage politicians’ standing; governments should indeed be attempting to reshape their civil services into more efficient, less blunder-prone and more public-spirited organisations.

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So the ‘dream team’ was not elected – now, more of the same

At least, one writes, there will not be the heartache of watching such a team fail – as did the widely hailed Blair and Obama – beset by vested interest and failing to fulfil expectations. Instead on past record there will be:

• more austerity for the ‘have-nots’, continuing as senior bankers flourish – despite causing the economic crash;
• declining public services;
• sub-standard education and training for the young from poorer families;
• ‘aspirational’ housing built on green spaces as council housing lists grow;
• the revolving door between big business and government continuing to spin, ensuring that decisions are made in favour of the rich;
• courting of foreign investment
• more poorly monitored, polluting incinerators;
• permission given for fracking in the politically opposed north;
• exploitation of smaller food producers, favouring food for export;
• lavish expenditure on HS2 and Trident;
• private companies entering the NHS and putting profit first;
• increasing export of armaments, causing mayhem in other countries;
• assistance for America’s military aggression.

And perhaps more:

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

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.

This 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.

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

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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

CBI in the construction driving seat? “Balfour Beatty must be rubbing their hands”.

Following news of Katja Hall (left), the CBI’s deputy director-general, lobbying for more executive house building so that members’ employees can easily be relocated round the country, a reader has sent a link to a report about David Cameron’s new promise to the CBI’s annual conference.

The government is planning to spend £15bn to deal with more than 100 of the notorious problem hotspots on England’s roads by the end of the decade. David Cameron will announce on Monday that hundreds of extra lane miles will be created on motorways and trunk roads to speed up journey times.

Plans to build a tunnel under Stonehenge, widely advocated by John Cridland, Director-General of the CBI (on its ‘wish list’), are said to have been ‘looked at’ by the government to help ease congestion on the A303, a key arterial route from the south-west to London which is among those set to benefit from the proposed funding. Other details may be read here.

Our reader asks: how many remember the Barber Boom?

Thanks to the internet we can explore the background to his question. Quentin Letts’ tirade clarifies: “Dr Beeching’s plan to cut 100,000 jobs and close 2,000 railway stations, along with 5,000 miles of rail track was one of the most anti-progressive steps of the past 50 years. To this day, there are traffic jams and bottlenecks which can be traced to Beeching. Pollution is higher than it need be, thanks to Beeching. Suburban sprawl is bigger, the highlands of Wales and Scotland more deprived, and hundreds of thousands of commuters unhappier than they should be – thanks to bloody Beeching”.

Dr John Newson reminds us that the transport minister at the time was Ernest Marples, who had private interests in the road building industry.

His 1,000-mile national motorway-building programme, was complete by 1971 – by which time another 2,000 miles had been announced. Our reader continues:

“Anthony Barber, Chancellor of the Exchequer between 1970 and 1974, pumped millions into the economy to build roads which was followed by massive inflation.

”Road building is popular with governments as it doesn’t require too much importing of raw materials and does boost employment – albeit temporarily.

”Funny how this is going to run alongside HS2 – which will involve importing materials and skills”.

On 29^th September it was reported that Balfour Beatty ‘s shares had closed 15.3% lower – following several months’ gradual decline.  The company also said there would be a further shortfall of £75m this year in its UK construction services division, following two earlier profits warnings this year.

So hearing David Cameron’s promise – as our reader said – ”Balfour Beatty must be rubbing their hands” and should ardently support his re-election.

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Taken for a ride?

One of the 99%, a reader who is an active West Midlands councillor, writes:

“I am still worried about this trade agreement the EU is negotiating with the US. What will it entail us having thrown on our doorsteps?”

U.S. and EU trade negotiators, Dan Mullaney and Ignacio Garcia Bercero reject accusations that they are pandering to multinational companies in their push to agree the world’s largest free-trade deal, saying that food safety and the environment will not be put at risk. Read more here: http://www.euractiv.com/trade/eu-us-trade-deal-wont-pander-big-news-531744

She continues: “I also read that Cambridge University have done a study and come up with food production shortages in this country by 2030 with development going the way it is – not very novel as I could have told them for nothing.

“I went on a tour round the borough last week and one of the sites was over by the airport where the HS2 is coming through.

“We stood amongst wheat growing on a farm of 300 acres which will have only 50 acres left when this useless project has taken its amount of land for the trains to zoom up and down. (Read about the effect HS2 will have on farms – and therefore food production – here.)

“What type of people have we running this country who take their orders from an unelected power base in Brussels?”

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“Jihadis belong to an elite that feels as secure in its status as Eton”

So wrote journalist Jenni Russell, a former BBC World Tonight editor.

Her website notes a Spectator view that she has been a key figure in the New Establishment, due to her friendship with Steve Hilton, David Cameron’s former director of strategy, and Ed Miliband. She believes that:

If pupils in the Muslim community, neglected black council-estate children, white working class in sink comprehensives, and Roma in Sheffield or Glasgow aren’t to be held back by the barriers of discomfort, distaste and prejudice: “they must be taught the principles, beliefs and manners of the employing classes”.

Competing for power over the underprivileged young: her strategy, British values . . .

But are the values, principles, beliefs and manners of most of the ‘employing classes’ so admirable?

They permit collusion with the profitable spread of tawdry ‘aspirational’ housing but neglect of heritage buildings, the establishment of incinerators, fracking plants, GM technology, HS2 and nuclear power stations polluting the countryside, the sale of British-made weapons to oppressive regimes and terrorists – and the execution of civilians by drone strike.

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