Government’s blank cheque for HS2

A reader with a long memory might recall that Philip Hammond, when Transport Secretary, turned down on the grounds of cost a proposal for providing metric height restriction signs on all bridges over highways. The estimate may have been around £2million. Ronnie Cohen compares this and other costs of converting road traffic signs with the cost of HS2.

I recently asked the UK Department for Transport (DfT) about the impact of soaring costs of HS2 on the rest of the transport budget. The government first estimated that HS2 would cost £37.5 billion at 2009 prices but this figure has gone up and up. (1) It appears that unlimited funds are available for HS2. The government has effectively provided a blank cheque. One cost estimate for HS2 exceeds £100 billion but the Prime Minister has committed the government to building it.

In the DfT’s correspondence to me, they said:

“You have raised concerns regarding the financial cost of High Speed 2 (HS2) and the impact on the Department’s budget and other transport priorities.

As you have noted, the funding envelope set in 2015 (and in 2015 prices) was established at £55.7bn. Since then, following rigorous assurance, the projected costs for delivering the project increased to a range of £65-88bn. In 2019 prices this equates to a range of £72-98bn. It is therefore a mixture of both cost increases but re-basing the cost estimates into 2019 values that has increased the overall funding envelope in delivering the project.

With regards to the impact on our Department’s budget, we can confirm that individual Departmental and project budgets are set by HM Treasury on a periodic basis. The current budget, covering the period 2020/21, was set in March this year.”

Lord Berkeley, the deputy chair of the independent Oakervee review, estimated that the cost of HS2 could be well over £100 billion. (1)

In other words, the costs of the HS2 project are being underwritten by the Treasury, which is separate from the allocations for the general transport budget and specific projects. If the Treasury can provide such vast sums for HS2, why can’t they provide a few quid for the metrication of traffic signs? Even if they provided just £1 billion, it would be just 1-2% of the likely cost of HS2, even at the DfT’s grossly inflated cost estimates. (2)

The DfT cost estimates for metrication of traffic signs worked out at £1400 per sign. (3) However, this has repeatedly been challenged and does not reflect real-world costs of conversion. For example, the Irish metric conversion was a fraction of the DfT estimate.

The DfT reply continues:

“Future funding allocations and priorities for the Department for Transport and all other Departments are being reviewed as part of the upcoming Comprehensive Spending Review 2020 (CSR20), which aims to provide Government bodies with the funding to delivery on the Government’s strategic priorities for the remainder of this Parliament. As the CSR20 is currently under consideration, we are unable to provide further comment on the likely budget to be set by HM Treasury.”

Apparently, rising costs of HS2 have no impact on the rest of the DfT budget because all its funding is coming from the Treasury but the DfT has been saying for years that metric conversion of traffic signs cannot be implemented without diverting funds from other parts of the transport budget. A metric conversion project will cost a tiny fraction of HS2 so why can’t it be funded in the same way?

On 13 October 2020, the Guardian reported that the cost of HS2 high-speed rail line has risen by another £800 million. (4) The Guardian says that “The reshaping of Euston station is likely to cost at least £400m more than planned, while the discovery of more asbestos than expected in demolitions along the line of the route has added around another £400m.” The money will somehow be found to pay for these extra unforeseen expenses. This would surely be enough to pay for a metric conversion programme yet the DfT has repeatedly said that this costs too much and the money for it cannot be found without taking away funds from other parts of the transport budget. I wonder why the DfT does not make the same argument about the extra costs of developing Euston station and removing asbestos.

Sources:

  1. https://www.instituteforgovernment.org.uk/explainers/high-speed-2-costs
  2. https://metricviews.org.uk/2012/05/dft-cost-claims-busted/
  3. http://tinyurl.com/7bqczxa (Estimating the cost of conversion of road traffic signs to metric units)
  4. https://www.theguardian.com/uk-news/2020/oct/13/cost-of-hs2-high-speed-rail-line-rises-by-800m

5 thoughts on “Government’s blank cheque for HS2”

  1. Total hogwash from DfT, of course. I think the most likely path to metric sign conversion is an Irish border poll to unite NI with Ireland and Scotland having an IndyRef2 outcome that favours independence so Scotland can rejoin the EU. Both will in my view result in metric sign conversions. And that could very well be Boris Johnson’s and Dominic Cumming’s legacy!

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  2. Hammond said, in a press release in 2010:
    “It’s bad enough that Labour were hell bent on replacing feet and inches with metres. It is completely unacceptable that they were going to spend over £2m of taxpayers money to do so when we have one of the biggest budget deficits in Europe.
    “It’s almost as if Gordon Brown’s Government sat around thinking of new ways to waste taxpayers’ money.
    “I am clear that from now on we will ensure that every pound of money the Department for Transport spends will be well spent.“
    The issue is discussed in an article on this site, posted in 2012:
    https://metricviews.org.uk/2012/03/16/dft-admits-no-basis-for-blocking-metric-signs/

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  3. The detailed plans for HS2 can be seen at https://www.gov.uk/check-hs2-route. It is hardly surprising that everything is in metric units, not only because that is the way engineers work, but also because HS2 will use ETCS (European Train Control System) signalling, a component of ERTMS. Because ETCS is a pan-European project, which, although initiated by the EU, is used in many countries outside the EU, it is designed around metric units. On a stand-alone system such as HS2, using dual units, or worse still, imperial units does not make sense. It is worth noting that all Britain’s tram system use metric units as do certain other services such as the Cambrian line and Eurostar.

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  4. Oh, my god! Government ministers concerned about not spending money unwisely? Look at the failed contracts for PPE, ferry service, customs and border control software (which does not exist yet), etc etc.
    The failures of the government are scandalous and “Project Fear” will I am certain be seen as the Sorrow of Cassandra who warned the public of the coming Brexit disaster and was ignored.
    And the government’s response to COVID-19? Only my own government and that of Bolsinaro in Brazil have been worse.
    I don’t think the average citizen is well served anywhere. The anti-EU propaganda (with resistance to metrication as one small piece of it) has been so unfortunate and hostile to the well being of the British people.
    We are all best served united globally to support peace, genuine prosperity, solidarity, and well-beingl

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  5. Just to explain: my full name is “Lawrence Ezra Steinberg” but I go by “Ezra”. Chrome automatically fills in “Lawrence” and I forgot to change it back to “Ezra”!

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