Government plans to delay HS2 will cost UK more in the long run, London business group warns

Thursday 09 March 2023 14:06

Government set to announce further delays to HS2 construction

Delaying construction of HS2 to save money will cost the UK more in the long run, a London business group has warned after reports the government is set to announce further delays to the already overrun project and late.

“Delaying the construction of HS2 to save money is a false economy. Not investing now is likely to increase long-term costs while delaying benefits for people and businesses across England,” the director said. General of Business LDN, John Dickie. AM City

“The country needs this project to stay on track with fast and efficient delivery to drive long-term growth and decarbonization. The slowing of the construction of the sections will do little to help leveling, especially in the North.

“With the shovels already in place, we cannot afford another delay. Ministers should not step on the brakes and instead seize this unique opportunity to create a world-class high-speed rail line that will increase capacity and transform connectivity between major cities in England.

The comments come after reports the government will soon announce delays to some sections of HS2 in a bid to cut costs.

The BBC said it understood this would mainly affect the high-speed rail between Birmingham and Crewe, and between Crewe and Manchester. However, he also cited sources indicating that some of the design teams working on the Euston end of the line would also be impacted.

HS2 has been the subject of criticism over its finances.

A budget of £55.7 billion for the whole project was set in 2015.

But the target cost, excluding the eastern part of phase 2b, West Midlands to East Midlands, has climbed to between £53bn and £71bn (at 2019 prices).

Railways minister Huw Merriman told the Commons last week that the government was “absolutely committed” to providing the HS2 but that “cost pressures” needed to be addressed.

Responding to reports that the project will be delayed, Prime Minister Rishi Sunak’s official spokesperson said, “You will know that work is already underway on HS2.

“Equally, the Minister for Railways has been clear that we continue to review any cost pressures and ensure the project provides value for taxpayers.”

HS2 Ltd managing director Mark Thurston recently said the project had been “significantly” impacted by inflation which added to the cost of construction materials, labour, fuel and energy.

“We’re looking at the project schedule, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of these things that are costing us more because of inflation,” he said. told the BBC. .

Tory MP Simon Clarke, a former chief secretary to the Treasury, described postponing the project as a “sense move”.

He said: “Having watched HS2’s progress as Chief Secretary, I have serious doubts about value for money and cost control.”

Michael Fabricator, also a Tory MP, said he would ask the government whether the delay ‘marks the end of HS2 north of Birmingham’ and whether the ‘damage’ caused in south Staffordshire – including his constituency of Lichfield – will be repaired.

He added: “Simply saying that the project is delayed is not enough.

“This project with the support of Labor and the Lib Dems should never have gone ahead in the first place.

“Covid has encouraged remote working and even now daily train journeys are down 40% from pre-Covid levels.

“The government is well aware that this makes the business case for HS2 even less compelling than it originally was.”

But Andy Bagnall, chief executive of rail industry lobby group Rail Partners, said: “As inflationary pressures make infrastructure projects more difficult, it is essential for the UK economy and for achieving the objectives of net zero that large sections of the HS2 are not delayed, which will eventually increase. the overall cost.

“We need to address the industry’s financial challenges across infrastructure and front-end operations – not just focusing on cost reduction, but also on generating revenue to close the financial gap and reduce the railway’s dependence on taxpayer funding. »

In October last year, Transport Secretary Mark Harper said the forecast for the completion of phases of HS2 remained within the planned limits.

This involved phase one – linking London to Birmingham – opening between 2029 and 2033.

Services will initially start and end at Old Oak Common, west London, due to delays at Euston.

Harper said Phase 2a – extending the line from Birmingham to Crewe – was “on track” for completion between 2030 and 2034.

The date range for the western part of Phase 2b – linking Crewe to Manchester – remained between 2035 and 2041, the Cabinet Minister added.

No timetable has been set for the opening of the eastern part of this phase, as it is in an early stage of development.

A planned extension to Leeds was scrapped in November 2021.

The Department of Transportation has been contacted for comment.

City AM journalists and AP staff

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