HS2 isn’t expected to cost as much as this post claims

A post that’s been shared thousands of times on Facebook claims HS2 will cost £150 billion, shave a few minutes off a few people’s journeys to London, and that Labour’s manifesto would have cost half of that figure. These generally aren’t correct.

The post goes on to claim Labour’s manifesto would have ended homelessness, child poverty and food banks, nationalised public services and tackled climate change. Whether it could have achieved all of those aims is a complex question that we won’t address here; but it’s worth noting that, for example, there were questions over whether the policies in the manifesto could have ended child poverty (which wasn’t actually a pledge the manifesto made).

HS2 isn’t currently set to cost £150 billion 

HS2 is the government’s project to build a high-speed railway from London to Manchester and Leeds, via Birmingham and the East Midlands.

It’s incorrect to say HS2 will cost £150 billion. The latest estimate is that the scheme could cost £106 billion, according to an independent review of the project’s costs leaked recently to the Financial Times. The report reportedly still recommends that “on balance” the government should proceed with the railway.

Since this article was first written the leaked review has been published by the government. It says that the total cost estimate for HS2 “developed by an external consultant” was £106.6 billion in 2015 prices.

The costs are significantly higher than they used to be. Initially, these were estimated as £37.5 billion, but those estimates have risen since then. The government’s 2015 spending review only set aside £56 billion (in 2015 prices) for the project.

The BBC has reported that cost increases are down to “a mixture of management issues, tricky soil conditions and unrealistic land valuation”, among other concerns.

Labour’s 2019 manifesto, by contrast (assuming the post is referring to the most recent one) set aside about £83 billion of additional day-to-day spending by 2023/24. However it also announced compensation for the WASPI women amounting to an additional £11.5 billion a year. In any case, it’s certainly more than half of the estimated cost of HS2.

And more importantly, that’s comparing extra spending every year for Labour’s manifesto with a one-off cost spread over many years for HS2.

Labour’s manifesto also supported completing HS2 anyway, so if the party were in government they would be facing the same budget decisions as the current government.

The origins of £150 billion

The £150 billion figure seems to come from a report by the Midlands Economic Forum, an independent research forum, in April last year. It said that all three phases of HS2 were estimated to cost around £106 billion. To this it then added other associated costs to get a figure of over £156 billion as the total cost of HS2. But there are some problems with its calculations.

By far the largest part of these associated costs are £43 billion of “local transport infrastructure connections to HS2 terminals”. It says that this figure was from Sir John Armitt, the chair of the National Infrastructure Commission (NIC).

But the £43 billion recommended by the NIC didn’t relate to HS2-associated infrastructure connections, but referred to its recommendation for additional investment in urban transport more generally (for towns and cities with populations of over 100,000 people) up to 2040.

Some journeys are expected to be significantly faster

On the most recent estimates, HS2 will shave more than a “few” minutes off journey times to and from London. The Department for Transport estimates journey times from Leeds will fall from 131 minutes to 81. From Liverpool they will drop from 134 minutes to 94, and from Manchester from 127 to 67.

Once the project is complete, HS2 forecasts that around 300,000 passengers a day will use the network.