HS2AA Advertisement Highlights DfT Report on ‘Unsupportable’ Figures and BCR of Just 90p

Embargoed to 28 June 2012: A new advertisement (breaking in The Spectator this week) from High Speed Two Action Alliance (HS2AA) highlights the findings of two 2009 Department for Transport (DfT) reports that concluded that the ‘value of time’ figures that the DfT use to calculate the returns from High Speed Two (HS2) should be halved, and their figures are ‘unsupportable’.  The advertisement can be downloaded here.

More than 40% of the projected monetised benefits of HS2 come from assuming businessmen don’t work on trains.

The two reports from June and December 2009 were only released in 2012 long after the consultation and the decision to go ahead with HS2 was taken.

Hilary Wharf, Director HS2AA, says;

“It is at the very best irresponsible of Government to have hidden the report’s findings from consultees back in 2011 and the various committees – the Transport Select Committee, The Major Projects Authority and Public Accounts Committee – that have all investigated HS2.

“Allowing for the recommended halving of the value of time and using the DfT’s own figures HS2 now delivers a Benefit Cost Ratio of just 90p.  This means HS2 loses money for every £1 of taxpayers’ money spent. But the Government just brushed this evidence under the carpet and said in their 2012 decision documents that the old Value of Time figures are ‘fit for purpose’ and ‘the best currently available’*.

“This is a £33bn transport project, the biggest for a generation, and yet these reports show its business case relies on outdated information and that crucial information was cynically hidden from view.”

Ends

Note for editors:

The June and December 2009 Reports commissioned by the DfT concluded that the value of time figure for business travellers should be halved.  They claim the DfT webtag value is “unsupportable”, yet these Reports were only released by DfT in April and June 2012 after the decision on HS2 had been taken. This factor alone reduces the business case BCR for phase 1 by 0.3 to under 1 (from 1.2 to 0.9). The DfT has claimed that the 2009 Reports only provide a ‘partial answer’ (i.e.if you take account of people  working on trains then you must take account of crowding), but this ignores crucial facts:

  1. Many businessmen book seats and so crowding is unlikely to be an issue (as the 2009 Reports note, and the consultation responses said too, but omitted from DfT’s 2012 decision documents)
  2. In any event crowding is not an offsetting benefit for HS2  if the sums are put onto a robust basis. HS2 is more crowded than a genuine railway comparator, such as the 51m alternative for improving WCML, or DfT’s own RP2, – its only less crowded than DfT’s ‘do minimum’ comparator that effectively ignores dealing with crowding.
  3. The evidence of an increasing trend in working on trains (again as the 2009 Reports note, and again ignored in 2012 decision documents). Common sense says this must be factored in for a project only starting in 2026 at the earliest and with a 60 year benefit stream

*Economic case for HS2: Updated Appraisal of Transport user benefits and wider economic benefits, Jan 2012, DfT. Page 58 para 10.5.6 “… the recommended values are fit for purpose and the best currently available”. For more information please contact : Richard Houghton   Tel: 07803 178 037  Email:  richardwhoughton@gmail.com