18 September 2023

The latest HS2 fiasco shows just how derailed our planning system has become


When the first round of reports broke that the government was considering terminating High Speed 2 at Old Oak Common rather than pressing on to Euston, my first thought was: ‘Why is the Prime Minister being presented with documents drawn up by someone with a glue addiction?’

As an illustration of the government’s increasingly Late Qing vibe, it was almost too heavy handed. Vastly overspending on a major infrastructure project only to then have it peter out a few miles from its destination is the sort of thing one expects to read about in histories of dying empires. 

Not only had huge amounts of work at Euston already been done, but terminating the line in a random patch of West London would mean adding a substantial length to journey times from Birmingham to central London, where the presumed passengers are actually going, destroying at a stroke both the benefits of the increased speed and, with it so much less attractive, diverted capacity from the West Coast Main Line.

Yet now it’s back again, with the Prime Minister and Chancellor reportedly considering both ending the line at Old Oak Common and scrapping the next phase from Birmingham to Manchester.

It isn’t that there isn’t something here that politicians should be responding to. The cost of HS2 has ballooned wildly since the project was first proposed, and continued to do so. Given that the United Kingdom is no longer wealthy enough to blithely shrug off such waste, the dire state of the project should be a call to arms.

No, the problem is that the politicians’ reflexive response is to look at ways to cut the project, rather than tackle the root causes of why it and other infrastructure programmes are so hideously wasteful. This might be acceptable in the private sector, which doesn’t make the laws governing major projects. But for any government, it is a gross dereliction of duty.

The basics of building a railway have not changed much since Victorian times, because the laws of physics and chemistry haven’t. You need to pick two points, level the ground between them, put down bedding, and lay the rails. Add some rolling stock and a couple of stations (which are basically big hangers) and boom, railway.

Some of the factors raising the baseline cost of doing that today, compared to the Nineteenth Century, are basically unavoidable: the higher cost of labour, for example, both directly and down the supply chain; or the general expectation that all the workers on a project survive it if at all possible.

But that doesn’t stop a nation such as Spain building high-speed railway at one-tenth the cost per kilometre that we manage in Britain. The rest of it is our fault – and an examination of those faults is a comprehensive tour of this country’s utterly broken approach to building and governance. Let’s take a quick gaze into the abyss.

First, here’s the National Audit Office report on HS2 from 2020. On page 44, it describes how when the Government tabled a bill for HS2, MPs added a host of additional demands and requirements which ‘made High Speed Two different from international comparator railways’. (Here’s the list of them from the Gov.uk website; there are almost three thousand.) The NAO goes on:

‘HS2 Ltd commissioned analysis which suggested that environmental and visual impact measures, such as lowering the railway beneath ground level, account for around £1bn of the explainable difference in cost between High Speed Two’s main civil construction and international comparators. The costs of undertakings and assurances may have also been potentially underestimated.’

And it gets worse. For example: 

‘HS2 Ltd has assured certain petitioners that parts of the land required for access to construct the railway will remain unused, which can constrain the ability of contractors to use particular construction methods.’

So HS2 Ltd bought land for the project, then had to assure local NIMBYs that it wouldn’t actually use that land, which restricted the construction methods contractors could use and, once again, drove up costs. 

Nor does their influence stop there. According to a witness statement in the case of HS2 Ltd (section 155), the cost of dealing with so-called direct action was £121.62m – and that was just up until December 2021. 

Then there’s the fact that over 100km of the 230km London-to-Birmingham section is going to be put in tunnels. Not only is this extremely expensive in itself (although the cost documents presented to Parliament to explain it are… not great), but these costs compound every time the government delays or salami-slices the project. You can’t just lay off the skilled workers needed to construct all those tunnels, even if you push back the completion date.

We could go on and on, of course. Here is the Environmental Memorandum containing another laundry list of payoffs and requirements imposed on HS2 during Phase One, none of which was in place when the Government commissioned the original cost estimates for the project. And that’s just part of a whole series of documents!

Every single item on each of those documents is another vector for one or several judicial reviews by motivated NIMBYs whose legal costs are, unconscionably, capped by law.

Really, what’s surprising is not that the real costs of HS2 have ballooned so far beyond initial estimates, but that anybody thought it worthwhile trying to produce initial estimates before they knew what obligations the politicians were going to heap onto the project.

The word ‘decline’ is thrown around quite a lot in my corner of Twitter these days. But it captures something specific that a mere denunciation of bad government does not. There is a decadence to this sort of failure; it reflects an electorate and governing class that either do not realise that this country is not rich, do not care, or are disinclined or incapable of rising to the challenges that it presents.

I’ve written before about how the politics of stagnation are going increasingly to impose hard choices and ugly trade-offs as politics shifts from being about how to distribute the proceeds of growth to how to allocate limited funds over strained budgets. 

My example then was social housing, but the way NIMBYs hijack the planning system is even more egregious. Think about everything involved in continually buying off stakeholders along the HS2 route: unnecessary tunnels and cuttings, multiple rounds of consultations and the attendant expensive delays, various direct kickbacks such as paying for community amenities, and so on. 

Now think about the per-capita benefit that represents to the residents of all those villages. It isn’t broken down in the official statistics but it must be enormous: a vast bill for Panorama Benefit, at the same time as Jeremy Hunt is reportedly mulling a real-terms welfare cut. 

I’d like to say it cannot go on. But of course it can, at least for a while. Like most of the things making this country poor, the hobbling of development is rooted in a powerful consensus. Think about how bad things had to get before voters were prepared to give Margaret Thatcher a chance to break the last ailing consensus – and how satanically unpopular her government yet was before the Falklands War. 

Decisive action to get things built would lead to much squealing about centralisation, about executive power, about the landscape, and much else besides; there is no evidence that the current crop of politicians are prepared to face that down, even when they could win.

There is a lot of ruin in a nation, especially when powerful cohorts of voters, such as homeowning pensioners, are more or less shielded from its real economic condition. It will likely take an acute crisis to break us out of the complacency which may yet kill off HS2. But there is no guarantee we’ll get one, or that anyone at Westminster would seize it should it come.

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Henry Hill is Deputy Editor of ConservativeHome.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.