I first highlighted problems in the approach away back in January and there's been a steady stream coming down the track since then. We also had the high profile reporting of the Institute of Economic Affairs expectation that the real cost is likely to be £80bn, even though Steve Ashcroft had blogged to that effect early in July. This week there appears to have been confusion among key stakeholders what the budget comprises: the Transport Secretary says £42.6bn, the Chief Executive charged with the implementation says there's an extra £7.5bn for rolling stock, and the Treasury are reported to be working on a figure of £70bn.
Now we have learnt, amid nervousness in the Labour ranks, the Shadow Transport Secretary wants to cap the spend at £50bn. What does that mean and what are the implications?
- There needs to be clarity what the budget is supposed to cover. While there is clearly confusion already regarding the budget, if Labour propose to cap at £50bn, then what is counted within the £50bn needs to be made clear, otherwise if they come into government, they risk being castigated when the first pound over £50bn is paid.
- What is the agreed categorisation and split between capital/revenue costs? If that isn't clear there is a danger of reallocation to mask overspend.
- Are the consequential costs of expert opinions, compensation to those adversely impacted, the costs of legal challenges, etc., also to be met from the £50bn allocation?
- What are the likely consequences of spending £50bn and then saying 'no more'? Will £50bn be viewed as sunk/wasted?
- If the budget is to be capped at £50bn, what is the most appropriate way to sequence the investment to ensure, if the plug is pulled, that the maximum benefit can be achieved from the £50bn spent and how will that scrutiny be provided?
My own personal prediction is that we have not heard the last of HS2 procurement, by a long shot.