IS £60BN HS2 SET TO HIT THE BUFFERS?

REVEALED: Mounting Cabinet revolt over astonishing cost of rail link

A GROWING Cabinet revolt is threatening to sink the HS2 rail link.

Ministers are alarmed by the project’s spiralling costs and are ‘increasingly minded to kill it off’, says a senior source. Initially put at £33billion, the budget is thought to have soared to more than £60billion. Treasury insiders admit the scheme is being added to an audit of major capital projects in which its future will be assessed ‘from scratch’.

This means funding could be squeezed or stopped. An investigation screened tonight claims ministers fear that over a decade HS2 will cost up to £6billion a year – equal to the entire maintenance budget for the existing rail network.

Although ministers publicly insist it will go ahead, the Cabinet source told of rising dissent.

HS2 opponents are said to include Theresa May’s deputy David

Lidington, Chief Secretary to the Treasury Liz Truss and Commons Leader Andrea Leadsom. ‘There is concern across government at the way the project is being managed and at the way the projected costs are continuing to grow,’ the source said.

‘We are not yet at the final go/no-go decision but opposition is mounting.’

And last night a Department for Transport insider admitted that ‘scoping work’ had been commissioned to cut costs, which could include reducing the depth of cuttings and tunnels.

The Department for Transport said it did not recognise the figure of £6billion a year – equivalent to Network Rail’s annual budget for maintenance and upgrade work.

Tonight’s investigation, for Channel 4’s Dispatches programme, claims that although published national accounts show HS2 will rise to an average cost of £4.2billion a year

‘The second phase won’t happen’

over the next ten years, ministers have secretly allocated up to £6billion a year.

This would bring the outlay to £64billion – £8billion more than budgeted currently and almost twice the initial budget of £33billion set in 2011. The senior Cabinet source tells the programme ministers are now ‘increasingly minded to kill off’ plans for the line and ‘put the money into upgrading services used by millions of voters every day’.

‘The costs are spiralling so much that we’ve been actively considering other scenarios, including scrapping the entire project,’ the source said.

A Cabinet minister told the Spectator: ‘In the next Tory leadership contest the winning candidate will need to have “Scrap HS2” in his or her leadership manifesto — as in: call the whole thing off.’

Another minister told the magazine: ‘The case for HS2 is and always was nonsense. By the time it gets to Birmingham, if it ever does, there will have been so many rows about cost overruns that the second phase won’t happen.’ Dispatches also reveals that ministers are considering saving money by building only the first leg of HS2, the section that runs from London to Birmingham.

A source close to Transport Secretary Chris Grayling insisted the project would go ahead, and ruled out any bid to scale it back. ‘There is no possibility of it being either axed or any of the routes changed,’ the source said.

The Campaign for Better Transport has urged the Government to invest £4.8billion instead in extending the rail network to help ‘the most disadvantaged and disconnected communities’.

It said that a national reopening programme would initially create 33 new rail lines with 72 new stations, allowing an additional 20million rail journeys a year. Dispatches features the first interview with Professor Stephen Glaister since he stepped down as chair of the Office of Road and Rail watchdog in December.

Asked if we would regret the construction of HS2, he replies: ‘That is what the analysis shows. There was no big picture analysis. We just don’t know whether there would have been a better way of spending the money.’

Alistair Darling, who was chancellor when HS2 Limited was set up to build the line ten years ago, tells Dispatches the project should now be scrapped.

He says: ‘Anyone who knows anything about long scale projects knows that if you’re spending a lot of money on one big prestigious project it will suck money away from everything else you need to be doing. The railways depend on sustained annual investment going on decade after decade.

‘The risk is money simply gets taken out of where you need to be spending it to fund one project – and that will be very bad for the country, both economically and politically.’

A Department for Transport spokesman said: ‘HS2 is already underway with 7,000 people and 2,000 businesses working on building what will become the backbone of Britain’s rail network.

‘This new rail line will integrate with Northern Powerhouse Rail and together they will transform the region.’

Miss Truss is overseeing the annual spending review which sets departmental budgets from 2020. She has said that the Government must be prepared to ‘junk white elephant’ projects.

Last week it emerged that HS2 has already spent more than £2billion on buying up land and property along the route. A quarter of HS2 workers were said to be on sixfigure pay deals. HS2: The Great Train Robbery. Dispatches, tonight at 8pm on Channel 4