Remember Chelsea & Westminster hospital absorbing all capital...

 spending available for hospitals in the SE? Or HS1 all the capital for railways in England? A useful point for infrastructure:

Spending freeze to shunt major railway projects past general election

Rachel Reeves is expected to limit funding to maintenance work only as three schemes soak up budget and transport secretary warns on public ownership

Oliver Gill

, Industry and Leisure Business Editor

Saturday January 18 2025, 6.00pm, The Sunday Times

Conservative Party

Labour Party

Transport

HS2

Rishi Sunak

The Old Oak Common station box site on the HS2 line linking London with Birmingham, 4.5 miles from Euston. The high speed line is likely to soak up the lion’s share of money allocated for improving Britain’s railways

JONATHAN BRADY/PA WIRE

Rachel Reeves is expected to freeze spending on major new rail projects until after the next general election as Britain’s train network falls victim to a squeeze on the public finances.

Three major projects, all part way through completion, are set to soak up the Department for Transport’s funding allocation between now and the end of the decade, according to multiple senior industry figures.

They are the first phase of HS2 linking London with Birmingham, multi-billion pound upgrades to TransPennine infrastructure, and East West Rail, a new line that connects Oxford, Milton Keynes, Bedford and Cambridge.

Beyond them, spending on a major revamp of Britain’s Victorian rail infrastructure will be limited to safety-critical maintenance unless the Department for Transport can convince the Treasury to bring in private investment, sources added.

The revelations come as Heidi Alexander, the transport secretary, is to say on Monday that public ownership of railways is not a “silver bullet” for better performance, and that she will oversee a “relentless focus on passengers”.

Heidi Alexander, the transport secretary, will say that public ownership of rail was never going to be a silver bullet

RICHARD POHLE FOR THE TIMES

Alexander will signal her plans to create a new app for train passengers with a new “best price guarantee” to ensure they always pay the lowest fares. She will also introduce more trials of tap in and out “pay as you go” services and publish performance league tables at stations as part of her mission to “rebuild passenger confidence one punctual, comfortable journey at a time”.

Speaking at a conference in Manchester, Alexander will say that the poor performance of publicly run railways, such as Northern, “reminds us that while public ownership will help better manage capacity, reduce costs and increase taxpayer value, it was never going to be a silver bullet”.

Alexander will say that the new unified, public body, Great British Railways, which will be set up by legislation to be introduced later this year, will be “second in size and importance only to the NHS”.
Greater integration of the rail network — with passengers moving more easily between services – is “non-negotiable”, she is expected to say.

Yet while ministers focus on train operators, industry sources fear for the future of rail infrastructure.

Rishi Sunak’s “Network North” programme, a series of rail and road projects designed to redirect the £36 billion previously allocated to building the now scrapped HS2 line beyond Birmingham to Manchester, are now under threat of significant delay or being shelved.

Network North promised a range of new rail projects, including a Midlands rail hub connecting 50 stations, as well as plans to electrify train lines in north Wales.

The expected delays to upgrades in Wales could ruffle feathers within the cabinet. Welsh secretary Jo Stevens last week said that rail was her “number one priority” for Wales in Reeves’ spending review.

Reeves may have even less money than she thought during the budget because of the UK’s sluggish growth. The chancellor is facing a £30 billion black hole if the spending plans are based on up-to-date economic forecasts rather than official growth projections, it was reported on Friday.

Crucially however, Reeves does not plan to scrap all upgrades to transport infrastructure, industry sources said.

Sir John Armitt, head of the National Infrastructure Commission, is writing a ten-year infrastructure plan for the government. Details of this are expected to be unveiled alongside Reeves’s spring forecast in late March. This will cover at least three years of day-to-day government spending and outline capital budgets for five years.

Sir John Armitt, chairman of the National Infrastructure Commission, told MPs: “I don’t see any great significant growth in rail, and there will be continued pressure on the roads”

ALAMY

Armitt dropped the biggest hint yet on the government’s priorities when it comes to transport infrastructure investment. The former chairman of the Olympic Delivery Authority said that ministers ought to face the reality that “the bulk of the population is totally reliant on roads”.

He told the Commons transport committee: “The continued decarbonisation of road transport removes one of the traditional arguments that you should use a lot more rail because rail is less polluting than roads.

“That will not be the case in the future. I don’t see any great significant growth in rail, and there will be continued pressure on the roads.”

A government spokesman said: “At the autumn budget we set out plans to kick-start economic growth by getting Britain moving, securing the development and delivery of high-growth transport infrastructure projects, including HS2, the TransPennine route upgrade and East West Rail.”

The government insisted it “did not recognise’ senior industry executives’ claims about new projects being mothballed and said that ministers were “committed to delivering the infrastructure this country needs”.

A Treasury source added: “No decisions will be taken until the spending review, where every single pound of taxpayer’s money will be scrutinised.”

Transport officials have not lost all hope of accessing funds for new rail projects during this parliament, however. One option understood to be under consideration is to sell off new railway stations along the East West Rail line to the private sector.

East West Rail will establish a main line between East Anglia and Oxfordshire, with potential services as far as Cardiff

EAST WEST RAIL

Investors would charge state-owned train operators a fee for using the stations, or could even be paid by the state for every passenger that passes through the ticket barriers.

There is precedent for such privatisation of rail infrastructure. Heathrow airport charges train companies for using its stations and tracks; meanwhile the high-speed line between London St Pancras and Folkestone is owned by a consortium of private investors that levy “access charges” on Eurostar and South Eastern Trains.

Sources said that the East West Rail station sell-off could raise “hundreds of millions of pounds” that could then be used to pay for upgrades elsewhere.

But even this would not be enough to drag up Britain’s train network to being on a par with counterparts on the Continent. Just 39 per cent of the UK’s railways are electrified, compared with Italy, Spain and Germany where 65 per cent, 63 per cent and 60 per cent respectively of services are electric.

Leaked plans from Network Rail in 2020 estimated that it would cost £30 billion to make the railways greener. The proposals were shelved by the Treasury later the same year.

Maybe not so useful for essays but, hey, you'll all be taxpayers soon...

 ANDREW GILLIGAN

Doomed from the start: the four reasons HS2 failed

Last week we exposed the chaos that still haunts the project. Now a former No 10 adviser sets out how it became Britain’s ‘worst infrastructure scheme in modern history’

ILLUSTRATION BY JAMES COWEN

Andrew Gilligan

Sunday October 27 2024, 12.01am, The Sunday Times

As ministers are about to learn the hard way, spending money on one thing means not spending it on something else. So reports of cuts in the budget to local buses and trains should be seen in the context of other reports that Rachel Reeves, the chancellor, plans to commit yet more billions to HS2, a project that even the transport secretary called “dire” and “out of control” in The Sunday Times last week.

For years, there has been consensus on Britain’s greatest infrastructure needs: more housing; a decarbonised electricity grid; raising local public transport in the regions to London standards; better sewers for cleaner rivers and new reservoirs for the new homes.

So why, instead, are we spending fortunes on something — intercity high-speed rail — which is objectively not even in the top ten? And how did the bills spiral not just out of the government’s control, but out of its very knowledge?

Andrew Gilligan advised Boris Johnson and Rishi Sunak on transport when they were prime minister. He says HS2 was doomed from the start

ANDREW FOX/POOL/AFP/GETTY IMAGES

As The Sunday Times revealed last week, HS2 cannot tell ministers whether it is £10 billion or £20 billion over budget. For perspective, even the lower of those two sums would be enough to electrify almost every railway line in the north of England, or build three cities a new tram system, or roughly double the capital budgets for the courts, prisons and police in each of the next five years.

HS2 devotees blame the train wreck on people like me: politicians and aides who spoiled a fine project, originally designed as a Y-shaped scheme from London to the Midlands, Manchester and Leeds, by meddling and cutting it back. (Between 2019 and 2024, I advised both Boris Johnson and Rishi Sunak on transport in Downing Street.)

In truth, though, HS2 was certain to fail from the start: doomed by four foundational flaws which no “review” or “ministerial task force”, the latest potions prescribed by Labour, are able to cure.

1. The wrong route

Britain’s previous high-speed line, HS1, which runs from St Pancras International to the Channel tunnel, did work, costing two thirds less than HS2 per mile in real terms. This was partly because it followed a motorway corridor, which was already spoilt.

To save a few minutes, HS2 chose instead to slice through the middle of the Chilterns, stuffed with ancient woods and vocal, politically active nimbys, and certain to require vastly expensive tunnels, cuttings and other aesthetic additions. A better route would have been along the M40 corridor.

2. The wrong speed

They were wildly aspirational, opting for a line with a design speed of 250mph, one third above the European high speed standard (France’s TGV lines and HS1 have a maximum of 186 or 200mph). Accommodating this ultra-fast design meant the line had to be flatter and straighter, with more earth moved, and yet more tunnels and viaducts, costlier track and structures. The top speed of 250mph, by the way, will never be reached in planned service.

3. Bad connections

HS2 doesn’t link properly to the rest of the transport network. Many rail passengers from London to Birmingham don’t end their journey in the city centre: they connect at Birmingham New Street station for other parts of the conurbation. Under HS2’s plans, this connection becomes a 15-minute walk through the streets of Birmingham from its separate purpose-built terminus to the local trains at New Street, losing half the time you saved coming from London.

Despite the vast sums spent buying up expensive London property, HS2 still does not — after ten years — have a workable station design for Euston, the planned London end point. Euston is one of the capital’s worst-connected termini, with only two overcrowded Tube lines in the station itself. (A pedestrian link would also be made to two more lines five minutes away — at Euston Square station).

In Euston, we have a problem… it is one of the worst-connected stations in London

JOSHUA BRATT FOR THE SUNDAY TIMES

Nor does HS2 join up with Britain’s other high-speed line at St Pancras. It will be a domestic backwater, not linked to the continental network and never reaching the distances that justify its high speeds. Because unlike in France, Germany, or Spain, all England’s key cities — save Newcastle — are within about 200 miles of all the others. At those distances, the time you save simply isn’t worth the extra cost of high-speed track.

Flawed design and high cost means that HS2’s benefits, though not nil, are not even close to enough to justify the price. Indeed, in 2022 the London-Manchester HS2 line was assessed by Whitehall itself as delivering (over six decades) 90p of benefit for every £1 spent. That’s on the official, grossly understated construction cost of £45.7 billion, (£61 billion in 2024 prices).

HS2 degrades London links from smaller, poorer places on today’s main lines, such as Stockport, Stoke, Wolverhampton and Coventry. For the first 60 years, the small amounts of C02 it saves through greener transport will be outweighed by the vast amounts it took to build it. Even under the full scheme, almost half the benefits would go to London and the southeast. Pound for pound, almost any other public transport project imaginable would do more for growth, levelling up, lower car use and net zero.

4. Ratchet, ratchet, ratchet

The scheme’s greatest flaw is the culture of HS2 Ltd, whose waste and dishonesty are surely now undeniable. This is about more than just profligacy. Bent Flyvbjerg, former professor of major project management at Oxford, has coined the “iron law of megaprojects”, which describes them as “over budget, over time, under benefits, over and over again”. Flyvbjerg identifies optimism bias as a key problem: project managers gloss over and underplay costs to get something started, then gradually admit the full cost once huge amounts of money have been spent and it’s too late to stop.

This ratchet process has been at the heart of HS2’s spiralling costs. HS2 and Department for Transport (DfT) officials concealed the rising costs from parliament; had those been known at the time, the scheme might have been cancelled. They misled No 10 and at least one Treasury official. They ousted staff who rang alarm bells.

When The Sunday Times reported this last October, HS2 and the DfT pressed us in Downing Street to authorise denials which were untrue. The denials they asked to release were that the allegations in The Sunday Times had been looked at previously by the National Audit Office (NAO) and found to be unfounded. But in fact, they had not been specifically looked at by the NAO, and at least one had been founded.

HS2 was, perhaps deliberately, also made too expensive to cancel. By 2020, when Boris Johnson was as prime minister deciding whether to start main construction on phase 1, they had already spent an astonishing £9 billion on “preparatory works” such as design, surveys, overheads and property — most of which, had we said no at that point, would have been wasted. That became a key argument.

Rishi Sunak cancelled phase 2 from the Midlands to Manchester

MIKE KEMP/IN PICTURES VIA GETTY IMAGES

Last year, Rishi Sunak called their bluff, cancelling phase 2 from the Midlands to Manchester. Another adviser and I in Downing Street argued that he should make it a “teachable moment” for Whitehall, with inquiries and sackings, but he didn’t.

Thus many of the culprits are still there, and still using the same tactics. The same ratchet operation is clearly being tried on the new ministers: we’ve spent so much already, it would be silly not to finish. It’s not so much more, you know.

It is vastly more: even the official cost of phase 2, in 2024 prices, is up to £33 billion — perhaps £65-70 billion if it costs spiral as they did in phase 1. The new proposals for a supposedly cheaper, slower “phase 2 lite” are a delusion and trap. We looked at this in government — concluding (as do many HS2 supporters) that it was not cheaper than the full-fat plan. We were told this redesign would need a fresh parliamentary bill, and another five or more years. It’s another version of the old trick: start low, put up the price and end back at the original scheme.

HS2’s longest tunnel runs ten miles under the Chiltern Hills in Buckinghamshire. Accommodating the trains’ ultra-fast design meant the lines had to be flatter and straighter, with more tunnels and viaducts

AARON CHOWN/PA

It is claimed that we need HS2 because the existing main line is full, but no one ever provided evidence to prove this. Overcrowding, we found, was usually caused by too-short trains — most from Manchester to Birmingham have only four standard-class carriages, and many to London only five and a half standard-class carriages in a nine-carriage train. Crowding is also caused by quirks of the fare system, with heavy demand for the first off-peak departures. Capacity could greatly expand with cheaper interventions, including longer platforms and trains. The north of England’s capacity crisis is on the local and regional lines, such as across the Pennines, which HS2 relieves little, if at all.

So why are we still debating the northern extension?

Partly because it is easy and cheap for northern mayors such as Andy Burnham, who are pushing for the extension, to demand someone else build them a high-speed rail line. By contrast, many of the things they should be (but mostly aren’t) doing themselves — congestion charging, say, or taking roadspace for bus lanes — require political risk on their part.

The choice of route through ancient woodlands and other environmentally sensitive sites angered protesters, who slowed the progress of the project even further

ALAMY

Partly, it’s that this has now become a faith-based issue. Backing HS2 proves you’re green, or a friend of the north, or just a good person who wants people’s lives made easier.

Governments often pursue stupid, destructive policies for their symbolic value, of course. But HS2 is a very expensive symbol. In fact, in terms of value and efficacy, it is the worst infrastructure project in modern British history. Don’t just take my word for it: Christian Wolmar, one of Britain’s leading train experts, recently called it “the biggest omnishambles in history”.

Finally, while HS2 has been wrong for the country and the planet, it is very right indeed for the construction and consultancy industries, which have powerful lobbies in Westminster. Trams, bus lanes, and new conventional tracks would help far more people, in more places, more quickly. But they’re cheaper, with fewer opportunities for profiteering, than one giant project which can be milked for decades.

The only rational approach to HS2 is to stop it causing us, and the public finances, any more damage. The stretch to the West Midlands is too late to cancel — the digging has been done and the tunnels built. But the rest of the scheme should be left in the grave, and the money spent — as we planned — on better projects.

Britain needs investment. But we need the right investment. Investing in the wrong projects is worse than not investing at all.

Andrew Gilligan, a former transport adviser to the prime minister, is head of transport at Policy Exchange

More trouble from HS2 - Sunday Times 4/6/23

 

When Justine Greening opened the National College for High Speed Rail in 2017 she was filled with optimism. It was “a win-win for everyone,” said the education secretary at the time. Based in Doncaster, near where the Flying Scotsman was built in 1923 and within minutes of at least 20 rail engineering firms and a major rail freight terminal, it was an obvious site for the country’s first specialist high-speed rail college. A suitably grand glass and steel building was constructed to house the high-tech project aimed at training some of the 2,000 apprentices it was thought would be needed to build the HS2 rail network, linking north and south.

Next month, just six years since its first students arrived, the college, renamed the National College for Advanced Transport and Infrastructure, will close. A victim, and symbol, of the dither, delay and cutbacks around HS2.

U-turns and tinkering, largely by politicians, have made it impossible for the engineers and project managers building HS2 to plan how much work they might be given, and how many staff they will need. That meant they were unable to offer the apprenticeships the college hoped for, and student numbers fell.

Caiden Cooley, from Doncaster, was among the school-leavers who submitted an application for a railway development course when the college opened. “It seemed fun, learning how to roll out tonnes of steel train tracks. That’s not the kind of thing they teach you at university,” said Cooley, now 24.

However, after reports grew that HS2 was being downgraded, and would no longer run through Doncaster as had been planned, he feared that a rail qualification would not guarantee him a glittering career. Cooley quit to study computer science at Nottingham Trent University instead. “There’s a big future in computer science,” he said.

HS2 was originally conceived in 2009 and planned in two phases, the first of which would connect London with Birmingham before splitting into a Y shape to connect to northern cities. However, the project has since gone through many changes, most recently scrapping the entirety of the eastern leg.

Julie Owen, acting chief executive of Siemens, a manufacturer of trains and rail infrastructure which has done a lot of work on HS2, said: “What we need most from governments is certainty — once you’ve announced a plan, stick to it.” Another senior source in the rail engineering industry said the college’s closure was “symptomatic of the government’s failure on HS2.

The National College for High Speed Rail in Doncaster opened to great fanfare in 2017 — now it is set to close

ALAMY

“Years of dither and delay have ravaged UK industry and, without urgent action, companies will begin questioning their investments. Reversing course will take more than lukewarm words from government.”

However, while rail companies urge greater certainty over spending, HS2 is, for many, synonymous with waste and delay. While the original costs in 2009 were placed at £37 billion, the final bill is now expected to top £100 billion.

Inflation and higher wage costs are making every stage of the project more expensive. Engineering sources say HS2 is currently tendering a contract to build 36 miles of track near Crewe. The price? £500 million. But for all the billions being thrown at the project, it remains behind schedule, even in its scaled-back size. Only about half of its first leg has been completed.

As well as the cost, much of the blame lies in the complicated process of planning and buying up the property needed for the route. In February 2020, an independent review also suggested that there had been “gold-plating” of HS2 contracts, making contractors build to a far more stringent quality than needed.

Another cause for the spiralling costs and delay were changes to the route. The scheme scrapped its Scottish leg as well as its eastern route and cancelled other smaller legs, incurring significant abortive costs in the process. This year the government even suggested that Euston would no longer be the start of the line, despite millions having already been spent on construction at the station.

William Barter, a railway consultant, said abandoning projects halfway through construction because of costs could be self-defeating in the long term. “It is a bit like building a house and then not finishing it because the roof will cost more than you first thought,” he said. Last year HS2 scrapped its Golborne Link Manchester after £50 million had already been spent on construction.

Such uncertainty was always going to jeopardise the college’s prospects. Gareth Dennis, a railway engineer who taught there said: “It was obvious this college was doomed from the moment it opened its doors because it wasn’t accompanied with any long-term plan for rail infrastructure.” He said the problem went wider than the constant revisions to HS2 routes. The government, he said, had also failed on its promise in 2019 to publish yearly a rail network enhancement pipeline document, which contractors could have used to gauge the amount of work likely to be available. This failure, he said, was symptomatic of a government that had placed the sector in “tick-over mode”, unable to expand.

“We don’t know what investment there is going to be, we don’t know what the tracks will look like, we don’t know how many staff we need to recruit for — it’s a mess. That uncertainty makes it very difficult for the college to sustain itself.”

In 2017 Justine Greening declared the National College for High Speed Rail a “a win-win for everyone”

ALAMY

Dennis remembered teaching railway design courses at the college, when it first opened, in 2017.

“Having taught the students there, many of whom were brilliant, it’s quite depressing to find out those opportunities are being denied to other people.”

The scaling back of HS2 also had a more direct impact on applications. “Kids aren’t stupid, they don’t want to go into an industry that the government keeps scaling back,” he said.

The 170 or so students still there will be transferred to other colleges to complete their training while it is unclear what will happen to the empty building.

Dan Fell, chief executive of the Doncaster Chamber of Commerce said: “This is a real opportunity loss for the city and yet when it launched there was a lot of optimism here.”

The shutdown is the latest setback for the city, with its airport also closing last year. “We were badly in need of a win,” Fell said. The loss of the college will be felt beyond the rail companies, he added, pointing out that the closure would have an impact on the number of young locals in well-paid engineering careers. “It has a knock-on effect,” he said.

Trough-Tec Systems is one company that was delighted by the prospect of a college to provide skilled rail workers. The company builds cable housing boxes, which snake alongside railway tracks, securely carrying wi-fi, telecom and electricity wires inside. Located in an industrial park five minutes from the college, its cable boxes are stacked ten feet high like a large fortress encircling its warehouses, from which the dull hum of forklifts can be heard.

Gary Elliott, managing director, said Trough-Tec had been eager to offer placements to the students to help address skills shortages: “We were over the moon — at the moment you end up having to look on Indeed [a recruitment website] or LinkedIn and you can’t guarantee the skills that way. A technical railway college providing a steady supply of candidates would have been fantastic news.”

Elliott, 61, said the company stopped pinning its hopes on HS2 long ago. “You can’t build a business on something that may or may not happen,” he said. His reaction when he heard of the last scaling back spoke to that pessimism: “Yeah, we saw that coming,” he said.

Manufacturers fear that while Britain prevaricates other countries are ploughing ahead with their own infrastructure.

Owen, of Siemens, said: “To continue to invest, we need certainty on plans for new trains, digital signalling, and electrification, smarter ticketing just like we have in places like Australia, India and the US.”

Australia has committed to spending billions to upgrade its infrastructure, which includes halving the time it takes to travel between Sydney and Melbourne. Some British rail engineers are moving to jobs in Australia.

The “chop-change” strategy is not limited to HS2. In May 2021, Boris Johnson announced the biggest shake-up of the railways since privatisation. At the heart of the change would be a large new umbrella organisation called Great British Railways, which would, rather like the old British Rail, take over the running of large parts of the network. Doncaster had been in the running to house its headquarters but lost out to Derby, another historic rail city. However, Derby’s victory was pyrrhic. It emerged last month that ministers had watered down the plan and that the proposals were unlikely to get any parliamentary time.

A government spokesperson said it was committed to HS2 and that the project was already creating thousands of apprenticeships and a better skilled workforce. HS2 said it had created 1,200 apprenticeships and was employing nearly 30,000 people. The department said it was working with education organisations — and listed initiatives, including graduate training programmes and schemes to help get unemployed people into jobs on the project.

Barter, the consultant, said HS2 and Great British Railways’ travails show the failure of UK infrastructure planning. “They both show a lack of will to make a decision. Is the government really interested in railways? Do they have a positive view of what the railways can do to the economy?”

He said scaling back the projects could mean that fewer people use the railway, meaning they generate less economic value.

“With HS2, you could spend 80 per cent of the capital costs but only get 20 per cent of the benefits,” he said.

Even those reduced benefits are unlikely to be felt in Doncaster.