Michael Ward kindly sent me this short paper about HS2 and the “policy-making” process surrounding it. Whilst I personally do not agree with his conclusions, his critique of the process is well worth reading. CT 

The case for High Speed Rail: a regional, social and economic perspective

Seminar 1 February 2012

Talk by Michael Ward at the seminar organised by the Regional Studies Association, and the Academy of Social Sciences at the House of Commons

A hell of a way to build a railroad?

I

Most economic development does very little harm, except perhaps to the natural environment. Most big capital expenditure projects are claimed to produce large numbers of jobs. The difficult task, for which cost benefit analysis is of only limited utility, is to work out which projects have the potential to deliver economic transformation, and which will end up white elephants.

Last year, with Paul Clark and Katrina Doyle, I contributed to the report ‘High Speed Rail: Is everyone on board?’ a survey of the opinions of stakeholders on the High Speed Two project.

This afternoon I want to briefly summarize the relevant conclusions of that study, and then go on to reflect on how the debate has evolved since that time.

II High Speed Rail: Is everyone on board?

About sixty people responded to our survey last summer. They included former Ministers, Members of Parliament, local councillors and council chief executives, railway industry people, consultants and transport experts, business representatives, academics and commentators. The aim of the study was not to take sides in the argument, but to examine the way in which HS2 was being developed, the institutions and structures being employed, and the case being made for the project.

We found that even many supporters of the project were scathing about how the tasks were being undertaken. Respondents felt that government had failed to learn and apply key lessons from the construction of High Speed One.  One respondent, for example, told us:

“This is not the right vision. This is a railwayman’s dream. It is not based on any kind of national economic or transport strategy.”

Many of our conclusions were about structures, coordination in Whitehall, communications, and securing investment. Two, however, were of particular relevance to today’s discussion.

We said that government should:

• Clarify the economic case for high speed rail in relation to economic development, transport investment, spatial planning and the environment.
• Strengthen the mechanisms for local economic development to maximize the growth opportunities arising from high speed rail.

III The January announcement

Government announced their commitment to the project, following the end of the consultation period, in January. The consultation focussed above all on the proposed line of route: the main concession offered by the Department of Transport was to safeguard the environment in the Chilterns Area of Outstanding Natural Beauty by putting more of the track into tunnels.

The economic case, as advanced by the government, is largely confined to the benefit/cost ratio of building the new line. In other words, the argument is that the economy will gain from the time saved by faster travel time; a money value can be imputed to those savings; and that money value will, over time, be greater than the cost of building the line. It does not address the issues with which our recommendation was concerned – economic development, transport investment, spatial planning and the environment.

Instead, the government asserts that such benefits will arise without producing detailed evidence:

• “HS2 will support economic growth across Britain.”

• “HS2 will also help to create jobs.”

• “High speed rail offers an opportunity to secure major economic benefits for these towns and cities, [Britain’s major urban centres] and to open up opportunities for valuable regeneration, new jobs and inward investment.”

(All quotes from “High Speed Rail: Investing in Britain’s Future”, Cm 8247, 2012).

This is not evidence-based policy making. Instead, it is following the time honoured procedure of policy-based evidence making.

It’s the Alice in Wonderland approach: sentence first, verdict afterwards.

It may be that growth will follow the trains (follow them north, that is, rather than south).  But the international evidence is, at least, ambiguous: examples from Spain and France suggest that enhanced rail links can aid centralization as well as decentralization.

What is almost certainly true, however, is that economic benefits are unlikely to accrue to the Northern regions as a whole without some positive efforts to steer and encourage them. It is in this context that our second recommendation on these issues in last year’s report is of particular significance.

Structures for local economic development in England have been weakened by the abolition of the regional development agencies. In place of the RDAs, a loose network of Local Enterprise Partnerships (LEPs) has been created. These have neither revenue nor capital budgets of their own, no legal identity (and hence no ability to commission or procure contracts, or to manage programmes) and no dedicated staff. They have no formal or direct link into the land use planning system.

This will matter less for the major city regions of the Midlands and the North than for more peripheral areas. Leeds, Manchester and Birmingham are developing new organisations and agencies. But if declining traditional industrial areas are not to lose out in future economic growth, some positive intervention will be required to support business in investing in new sites and developments.  In London, the long term future of the Olympic Park development zone is to be assured by the creation of a Mayoral Development Corporation. The North will need its equivalents: economic development agencies, rooted in local democracy, with the capacity and resources to make things happen.

IV But will High Speed 2 happen?

The Government’s claims for High Speed 2 are not modest. Their vision is for “a transport system which is an engine for economic growth, and which is safer, greener and improves quality of life in our communities.”

For my part, I do not think that Government have made out a satisfactory case that High Speed 2 is either necessary or sufficient for the delivery of growth in the North.

I do think, however, that High Speed 2 is likely to go ahead. This is because of a long-established constitutional principle, central to big public spending decisions. I call this the doctrine of the horse that is ready to run. When public debate and attention has been focussed on one possible investment project, to the exclusion of others, and evaluation and appraisal processes have been concentrated on that project, then that is the project that is approved. Even those who are not completely persuaded will unite behind the project, because not to do so would put things back a period of years. This may not be a triumph for rational decision making, but I think it represents political reality.

V So what is the alternative?

At a late stage in the gestation of the High Speed 2 project, another, massive, transport infrastructure project has reappeared – the idea of building an airport in the Thames Estuary. Considering these projects separately from each other highlights the need for a National Transport Infrastructure strategy.

It is not that in any sense HS2 and Boris Island are alternatives: just that High Speed Rail and airport capacity need to be planned together

Now, there are new arrangements in place for taking decisions on individual major projects through the planning system. And Government has published a National Infrastructure Plan which “sets out a clear pipeline of over 500 infrastructure projects.” But that plan is just a listing of existing projects at varying stages of development – a whole stable full of horses ready to run. What is lacking is a sense of overall needs and priorities.

If there is to be an airport in the Thames estuary, as a complement to, or even a replacement for, Heathrow, it raises questions about the Crossrail project, scheduled for completion in 2016 and providing improved links from central London to the airport.

It is surely a fiction that these big investment decisions are matters for the private sector: they involve choices about land and choices about the natural environment, just as they involve choices about economic development and investment.

A decision to invest in a new airport high speed rail network implies decisions about the future location of economic activity. It would be better for such decisions to be part of a national spatial plan and infrastructure strategy.

The present arrangements are one hell of a way to build a railroad

MW

01.02.2012