HS2 update: Treasury Committee calls for review of the economic case

The Treasury Select Committee has stated that the economic case for HS2 must be reassessed and updated before the Treasury signs off on the project.

In its Latest Spending Round 2013 review the Committee said that, given the recent report by KPMG and published by HS2 Ltd setting out the regional economic impacts, the Treasury must produce its own economic case for HS2.

The Committee wrote:

• The Treasury should not allow HS2 to proceed until it is sure the cost-benefit analysis for HS2 has been updated to address fully the concerns raised by the National Audit Office.
• The Treasury has based the need for HS2 upon the existence of benefits that are not captured by the existing economic appraisal. The Treasury should publicly quantify these benefits.
• Prior to any decision by the Treasury to proceed with HS2, it should publish its own comprehensive economic case supporting its decision.

It added that:

Once these requirements have been met, the Government should formally reassess the project before deciding whether to proceed. In the event that it does proceed, Parliament can then consider the hybrid Bill in the light of that reassessment.

Andrew Tyrie MP, Chairman of the Committee, told the Telegraph:

There appear to be serious shortcomings in the current cost-benefit analysis for HS2. The economic case must be looked at again. The Bill should not proceed until this work has been done and the project has been formally reassessed by the Government.