黑洞社区

A scan of the newspapers over the bank holiday weekend provided a pretty damning assessment of HS2鈥檚 future 鈥� most of the national press seems to have it in for the 拢56bn scheme, slamming it for spiralling costs and congratulating prime minister Johnson for his 鈥渇resh thinking鈥� in launching his 鈥済o or no-go鈥� review.

And for those who support what would be largest infrastructure scheme in Europe, the bad news stories just keep coming. The Daily Mail revealed that it understands investigators are looking into allegations of corruption in the way some contracts may have been awarded to suppliers, while the Telegraph reported electricity bills may rise to pay for works on the UK鈥檚 energy network for HS2. And then the BBC shared leaked documents proving the government knew the budget was unrealistic three years ago, before MPs signed off the first phase of the project connecting London to Birmingham.

The latter story would probably not surprise many in the construction industry 鈥� there is a long-held suspicion that ministers don鈥檛 really want to know the true costs of infrastructure schemes, or at least they don鈥檛 want voters to know until they鈥檝e got their pet project over the line and then they can conveniently blame spiralling costs on delivery teams grappling with the complexities they were happy to gloss over.

• Read: George Osborne think tank launches pro-HS2 鈥榬eview鈥�
• Read: Which construction firms have won HS2 contracts so far?

Flashback to February this year when 黑洞社区 ran a piece assessing the high speed railway鈥檚 chances of survival. We pointed out all the challenges that had failed to bring it down so far: the rounds of spending cuts under austerity, the years of protest campaigns, the court cases. But just as construction seemed within touching distance in 2018, a leaked report inflicted a big blow: it turned out the projected budget estimates had jumped by a staggering 拢30bn.

Cost has been a nagging issue for some time. In 2012 the government budgeted 拢32.7bn; by 2013 this was revised up to 拢42.6bn. But revising up the 2015 estimate of 拢55.7bn to north of 拢80bn played into the hands of hardened opponents and undermined cross-party support.

Still, just six months ago there was optimism that the revised business case being considered by ministers would go through and finally construction would be triggered by the government鈥檚 notice to proceed.  After all it had the backing of then prime minister Theresa May who said in its defence: 鈥淚t will bring tens of billions of pounds鈥� worth of benefits to passengers, suppliers and to local communities up and down the route.鈥�

HS2 has no such champion at the top now, quite the opposite.

Boris Johnson has made no secret of his dislike for HS2 and in the leadership race promised to review it. Sure enough, Doug Oakervee is now tasked with a full assessment due towards the end of the year.

Of course, many believe Oakervee, as a former HS2 chair, will be sympathetic to industry pleas to consider the benefits of a once in a generation scheme. But they have reason to worry about his deputy on the review panel, Lord Berkeley, an arch enemy of the scheme who told the Telegraph the review will 鈥渆xamine all possibilities鈥� and 鈥渢he outcome might be to cancel, truncate or reduce the specification of HS2鈥�.

So is there anyone standing up for HS2? Well, George Osborne鈥檚 think tank the Northern Powerhouse Partnership this week launched a parallel review of the project offering 鈥渁 northern perspective鈥� and making 鈥渂old and realistic proposals鈥�. Fundamentally, it believes that both HS2 and a new east-to-west high-speed rail line are needed to boost the North鈥檚 economy. Manchester mayor Andy Burnham is of a similar view warning that if HS2 is scrapped as a result of the review, 鈥渢he government had better get ready for an almighty fight with the big cities of the North.鈥�

All this political chopping and changing is far from ideal 鈥� and the 拢7bn already spent seems a hell of a waste 鈥� but it may not be all doom and gloom for the construction industry at least. Yes, it will be a real shocker for the big names that thought they had bagged big number contracts 鈥� the likes of Costain, Skanska, Morgan Sindall, Bam Nuttall, Laing O鈥橰ourke, Kier and Balfour Beatty are already in deep. But if HS2 is curtailed or even scrapped completely, it鈥檚 extremely likely Johnson will have to conjure up another big spending plan to boost the economy post 31 October. There is always the temptation to divert capital spending to revenue spending on key services such as the NHS and schools, especially if you are contemplating an election. But Johnson has already signalled his intention to invest in the Housing Infrastructure Fund, a 拢600m fund announced by the chancellor Sajid Javid last week to support the building of 50,000 homes in the south of the country. This has fuelled rumours that the government is planning a big public spending spree.

What is clear is that the HS2 review means that construction jobs we all thought were more likely to go ahead than not are now on the line. If the worst happens and the railway is scrapped, the industry will want to know pretty damn quickly how the money that would have been spent will be diverted, and you can bet that contractors, as well as political leaders in the north of the country, will be lobbying extremely hard for much needed investment in transport and infrastructure above all else.

Chlo毛 McCulloch, editor, 黑洞社区