HS2 demand forecasts 'lack credibility'

The chair of the influential Treasury select committee has questioned the economic case for the £55.7bn HS2 project and said the project is “scarcely worth the candle” without credible data.

In a letter to transport secretary Chris Grayling, select committee chair Andrew Tyrie criticised the government’s latest economic business case published in November, which bumped up the projected benefit-to-cost ratio to £2.70 for ever £1 spent, up from £1.10 for every £1 spent stated previously.

Tyrie said without an explanation for this large increase “the business case suggests that HS2 is scarcely worth the candle.”

He added: “So, the credibility of this sharp rise in forecast demand is crucial to the whole HS2 project.”

According to the Department for Transport, one of the causes has been a much more rapid growth in passenger demand between 2011 and 2014 than predicted by HS2 Ltd.

Tyrie added that it is a “serious concern” the forecasting model used by HS2 Ltd “failed to provide a reasonably accurate prediction for 4 years’ worth of growth.”

The select committee chair has called on the transport secretary to provide evidence for the government’s claim about the economic benefits.

Commenting on the correspondence, Tyrie said: “In the last Parliament, the Treasury Committee examined the proposals for HS2. A lack of rigour in the economic case was manifest.

“On the basis of the evidence provided so far, many people remain to be convinced that the £55bn projected costs for HS2 offers better value for money than a lower speed, lower cost alternative.”