(Updates with Clegg response in eighth paragraph.)
Sept. 9 (Bloomberg) -- U.K. Prime Minister David Cameron’s government has failed to make a convincing case for building a high-speed rail line between London and the north of England, a cross-party panel of lawmakers said.
The decision to go ahead with the 50 billion-pound ($78 billion) project was based on 10-year-old evidence and inaccurate estimates of the economic benefits, the House of Commons Public Accounts Committee said in a report published today. The Department for Transport also lacks the expertise to see the project through, the panel said.
“The department has been making huge spending decisions on the basis of fragile numbers, out-of-date data and assumptions which do not reflect real life,” the committee’s chairwoman, opposition Labour Party lawmaker Margaret Hodge, said in an e- mailed statement. “It has yet to present a convincing strategic case for High Speed 2.”
Transport Secretary Patrick McLoughlin should publish the evidence for HS2 as the best option for increasing rail capacity and update the business case to reflect the fact that business passengers can work while traveling by train, the committee said.
There should also be tighter control of the contingency fund for the line so it isn’t used to compensate for “weak” costings, the committee said.
“The pattern so far has been for costs to spiral -- from more than 16 billion pounds to 21 billion pounds plus for phase one -- and the estimated benefits to dwindle,” Hodge said. “The department lacks the commercial skills necessary to protect taxpayers’ interest on a programme of this size.”
Deputy Prime Minister Nick Clegg used a speech in Scotland on Sept. 5 to reaffirm the government’s support for the new line, which will run initially from London to Birmingham, and then on to Manchester and Leeds. It will help to tackle the north-south economic divide in the U.K. by increasing capacity and cutting journey times, he said.
Clegg hit out at critics of the project today, saying they are “spectacularly wrong on this occasion as they have been on so many other occasions.” The proposed line is “the most compelling answer” to the lack of rail capacity, he told reporters in London.
--With assistance from Robert Hutton in London. Editors: Eddie Buckle, Andrew Atkinson