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Nef research finds the £33 billion earmarked for HS2 would be better spent elsewhere:

• £10 billion – could transform rail infrastructure in the North and Midlands, creating new and faster east-West rail links, redeveloping stations and electrifying regional rail lines.
• £10 billion - could overhaul the East and West coast mainlines, increasing the speed, capacity and reliability of North-South rail travel with less environmental damage than HS2.
• £6 billion – could upgrade mass transport in Birmingham, Leeds, Manchester and Liverpool, including investments in large light rail schemes and bus networks.
• £4.5 billion – could roll-out super-fast fibre optic broadband across the country, which would boost business, reduce pressure on transport and future-proof British infrastructure. 
• £2 billion – to make cities outside of London better for cycling and walking, creating a boom in low-carbon, healthy transport in Leeds, Manchester, Birmingham, Sheffield, Nottingham, Bradford and Liverpool.

Research published this week by nef (the new economics foundation) casts further doubt on whether High Speed 2 (HS2) is a wise investment for the UK. Analysts at nef found the aims of HS2 could be met by a series of smaller scale transport investments. Using government methodology, nef found that each of these investments are likely to offer better value for money than the London to Birmingham rail line, estimated to cost taxpayers £33bn.

The alternative investments focus transport spending outside of London on projects that are ‘shovel ready’ (HS2 will not be complete until 2023). Each offers a higher Benefit Cost Ratio (BCR) than HS2 making them less risky and more likely to be beneficial to the economy.

HS2: a questionable investment

The £33bn estimated cost of a high speed rail line between London and Birmingham is said to be an investment in jobs, rail capacity and low carbon transport. In fact:

• Demand for HS2 has likely been overestimated by oversimplified government modelling.
• As a transport project, HS2 Does not offer good value for money (It has a BCR: 1.4 )
• Evidence that HS2 will promote economic growth or tackle the north-south divide is limited.
• The line will be carbon intensive and environmentally damaging

Time to invest in transport outside of London

If the government is serious about stimulating the economy and tackling the north-south divide it should prioritise transport investments outside of London.

• Regional rail: Connect northern and midlands areas and enhance regional trade, employment  (BCR range: 2.5 to 5)
• Buses, Trams and smart ticketing in northern city centres: Economic stimulus, reduced congestion, will encourage more low-carbon travel (BCR range: 2 to 2.5)
• TfL-style investment in cycling and walking: will increase the resilience of local transport, improve individual health and air quality (average BCR: 13.5)

Time to modernise and future-proof British infrastructure

Current broadband investment plans do little to address the fact copper wire internet connections will soon be outdated. Investing in to-the-door fibre optic broadband and video-conferencing hubs would:

• Boost business and education:  10% increase in broadband coverage corresponds with 1% increase in national economic performance
• Lay the groundwork for future connectivity  for the entire UK economy to flourish in the future
• Reduce the need for travel, increasing productivity and reducing pollution.

David Theiss, Researcher at the New Economics Foundation said:

“HS2 is the largest transport investment in the UK’s history. At the moment it amounts to a £33 billion gamble. Our research shows the government is backing the wrong horse. Instead of pouring billions of pounds into a single line that will take twenty years to complete we should be spreading our bets on a wider range of transport investments that offer better value for money.”

Helen Kersley, New Economics Foundation said:

“For too long transport spending has focused on London while the rest of the UK is crying out or investment. Our research shows investing the £33bn allocated for HS2 on shovel-ready transport projects outside of London has clear economic benefits and offers better value for money to taxpayers.”

Related publication

High Speed 2: the best we can do?

Contact: Carys Afoko, Head of Communications 
e: press@neweconomics.org m: 0787 596 6955