HS2’s derailment: How do we prevent another major project failure?

From the day High Speed 2 (HS2) was announced, the project failed to win confidence. Dr Richard Wellings, at the time the Head of Transport for the Institute of Economic Affairs (IEA), called the proposal a “high-speed gravy train”.

The government’s own figures, Wellings wrote in 2013, suggested the project represented poor value for money. Economic evidence was disregarded by ministers, he claimed, and a “group of powerful special interests appears to have had a disproportionate influence on the government’s decision to build HS2”.

Professor Len Shackleton, an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham, told us that other pressures were political, with the Conservative Party wanting to divert attention from their failure to approve a third runway at Heathrow.

“Part of the claim was we wouldn’t need as much airport space because nobody would fly domestically. This might have made sense in relation to people flying to Scotland, if HS2 had ever linked up with the Scottish route. Flying to Birmingham has never been a big thing!” Shackleton says.

“The most prescient part of the paper was [Wellings’] belief, drawing on the evidence of what happened with HS1 and the Jubilee Line extension, that the costs would balloon far beyond the levels assumed in optimistic projections.”

But as the concept went further down the planning route, other infrastructure ideas cropped up alongside it, piggybacking on the future high-speed rail capability. Business owners in the region began strategising for a time when customers might finally have the opportunity to move quickly and smoothly between the major population centres of the north.

And long-suffering locals dared to imagine new levels of connectivity between cities and towns.

And so, when Prime Minister Rishi Sunak derailed the West Midlands to Manchester part of the project after what appeared to be very little consultation, he wasn’t just popping the HS2 bubble. He was bringing down an entire house of cards that had been carefully constructed around the new infrastructure.

In doing so, he was also damaging confidence at all levels, from institutional investors who make decisions around the funding of major infrastructure projects to the people in the street whose votes and taxes give a political party its power.

Accountability for greater certainty

“The cancellation of the project has definitely added to the scepticism among the public about how infrastructure can be delivered, which is bad politics,” says Dr Tom Arnold, Research Associate with the Heseltine Institute for Public Policy, Practice and Place at the University of Liverpool.

“I don’t think that level of scepticism is healthy around a project that is going to take 25 to 30 years to complete. These projects rely heavily on consensus because they will naturally cross successive governments, different parties and different administrations. There has to be some degree of consensus around why this project has been developed.”

But in a political environment in which short-termism rules, whether that be election to election or even news cycle to news cycle, consensus is difficult to achieve.

How, then, does a government ensure greater accountability so decisions around major infrastructure builds are able to survive the vagaries and whims of those on the political merry-go-round?

The solution starts at the beginning, Arnold says, when the idea is first conceived. The legislation must match the importance of the project, rather than allowing infrastructure projects such as HS2 to be built on sand.

“There was a problem with HS2 in the way the legislation was designed,” he says, explaining that the bill provided permission for the government to develop HS2 without committing the government to building it.

“There was never any legislation that said if parliament approves this, it has to be built, and it will go through this stage and that stage, and here are the governance elements along the way, and we’ll come back and scrutinise it in parliament.”

The lack of accountability for announcements and outcomes is clear, despite a series of bodies formed in the 2010s (for example, the National Infrastructure Commission) to scrutinise infrastructure projects, and report on viability and performance.

“These bodies lacked teeth,” Arnold says. “They could produce reports, but the reports could easily be ignored.”

The right people at the table

Separating major infrastructure projects from politics altogether would not be a good idea, Arnold says. Governance at national government level is required. But so is a level of reliability and consistency, one that rises above the modern-day political scourge of short-termism.

Government should take comfort and confidence from the fact that many major infrastructure builds are highly successful, Arnold says.

“Crossrail has been a huge success,” he says of the project that delivered London’s east-west railway, the Elizabeth line. “It has massively surpassed expected traveller numbers. It is very, very popular now it’s operating, despite some delays and budget overspend.”

But Crossrail’s Elizabeth line is in London, and there’s a reason that investors and voters in the north of England have lost faith in the delivery of large projects. Infrastructure projects in London have Transport for London as a key stakeholder.

“That body has accountability to the Mayor and London Assembly, so there’s a level of scrutiny and accountability there that simply didn’t exist on HS2,” Arnold says.

He suggests learning from those projects’ accountability models, and asking how projects can be devolved to regional transport bodies, such as Transport for the North, or how local mayors – Greater Manchester’s Andy Burnham, Liverpool’s Steve Rotheram – can be brought in.

“These figures should have a lot more say in a project, and they should have a lot more involvement,” Arnold says.

“Perhaps that is a way of developing a degree of accountability across the system, which has obviously failed somewhere down the line.”

Why accountability is not negotiable

Confidence and trust are valuable resources in politics and, in the north of England at least, are now in very short supply.

“Over the past decade or 15 years, we’ve had a lot of infrastructure projects cancelled in the north of England, particularly electrification of existing rail lines and extensions,” Arnold says.

Manchester Piccadilly is a case in point: two extra platforms were slated to resolve the issues that slow trains through Manchester, affecting the whole northern network.

“That was proposed almost a decade ago and cancelled earlier this year. So HS2 is not the first project to have disappointed people,” he says.

For the investors who had been focusing their resources on the HS2 project over the past decade, the events of recent weeks are a deterrent to future engagement, Arnold says.

“The fact that the Prime Minister can, after 13 or 14 years of planning this project, go to his own party conference and make such an announcement, without any parliamentary scrutiny and seemingly not even a discussion in Cabinet, is frightening,” Arnold says.

“The message to investors is that this is not a country that can be relied on for having a consistent approach to delivering the built environment.”