New report stretches credibility in trying to shore up failing case for HS2

Today’s new report commissioned by HS2 Ltd seeks to re-assess the regional benefits of HS2.  With the core business case now in tatters – its time saving benefits discredited, its costs continually escalating, and its demand forecast using an outdated model – this report by KPMG focuses solely on the impact of HS2 on regional economic growth.

The two key findings of the report are startling

  • That the economy could benefit from HS2 by £15bn a year.
  • That the regions could see a greater impact from HS2 than London.

This sits uncomfortably with previous results and academic wisdom

  • The £15bn a year is many times greater than DfT’s original February 2011 HS2 business case figure – of just £6.3bn[1] over the projects 60 year life.
  • The view of academic experts that says dominant national cities (ie London) when so connected are expected to get the lion’s share of any benefits. So HS2 would widen rather than close the North South divide.
  • The evidence on the impact of HS1 does not support KPMG’s conclusions: Professor Roger Vickerman, HS2 Ltd’s own advisor, told the House of Commons Transport Select Committee  in 2010 that the economic benefits of HS1 to Kent were “not visible to the naked eye.”

The methodology that KPMG use is this report is not mainstream. It controversially assumes that transport creates productivity rather than the reverse. It makes a host of other questionable assumptions eg that the only constraint on productivity is transport connections, and not, for example, skills.

While KPMG say the work was peer reviewed by an HS2 Ltd panel it fails to mention that its methods have attracted censure from experts in the area.

Unbelievably, the report even states that users should not rely on it, with a warning to readers that “All users are accordingly advised to undertake their own analysis and due diligence before making any decision or entering into any commitment based on the information based in this report.”

Hilary Wharf, Director HS2AA said

It is always depressing when politicians’ vanity drives them to promote a dire scheme rather than confess making a mistake. This latest report is a rabbit out of the hat. But like all conjuring tricks it lacks real substance.”

 It is a measure of the Government’s desperation that they have abandoned respected approaches and paid for an analysis that’s only virtue is it gives the “right answer”. It is the same approach that was forensically dismembered back in 2010 by the Institute of Transport Studies in Leeds[2], and found wanting in expert evidence to the Transport Select Committee.”  

 “Betting £50 billion on a single train line being the solution to the economic woes of the country outside of London really is irresponsible – and doesn’t cover up for the lack of a coherent economic strategy for the regions.

“It’s time to accept the facts: HS2 will not benefit Britain”

Notes to editors:

HS2AA is a national organisation making the powerful case against HS2. It is a not for profit organisation working with over 90 local groups who believe HS2 does not represent an effective answer to the UK’s transport, economic or environmental needs. HS2AA have focused on an evidenced-based approach to challenging the business case, the environmental case and compensation arrangements.

For more information please contact:

Richard Houghton

Tel: 07803 178 037


[1] Economic case for HS2 Feb 2011, table 2,page 12

[2] by Laird J and Mackie P (2010) Review of methodologies to assess transport’s Impacts on the size of the economy. University of Leeds Institute of Transport Studies for The Northern Way. It said it was clear that “further work on methods and techniques will be needed before GVA assessment could become part of ‘mainstream’ appraisal. The methods available to estimate the potential GVA impact of a region post a transport investment are still in their infancy and need work to ensure they pass internal consistency and robustness tests”.