The Chamberlain News

HS2 decision will be at the top of Theresa May’s Downing Street in tray

One of the first big decisions Theresa May will have to make when she moves into Number Ten tomorrow is whether to continue with the £55 billion HS2 scheme.

If she sticks to her guns, it will be full steam ahead for phase one of the high speed rail project from Euston to Birmingham. Mrs May has said in the past that she regards HS2 as a vitally important tool to boost UK economic growth and bring wealth and jobs to the Midlands and the north.

But there’s no doubt that the new prime minister will come under pressure from Tory backbenchers, especially those representing rural constituencies through which the HS2 track will run, to either delay, scale back, or scrap the scheme entirely.

MPs will point to a National Audit Office report last month which warned the 2026 target date for opening phase one between London and the West Midlands is at risk.

Earlier in the year the NAO said the Department for Transport had failed to prove that HS2 would boost regional economies and create thousands of jobs.

The Commons Public Accounts Committee has been similarly sceptical about the ability of HS2 Ltd to bring the new railway home on time and on budget, with chair Meg Hillier warning that the project is under severe strain.

Public perception of a vastly expensive scheme has not been helped by the disclosure that HS2 Ltd is spending £2.8 million a year on renting its national headquarters at Snow Hill, Birmingham.

Transport Secretary Patrick McLoughlin has insisted HS2 will go ahead as planned, and said it represented value for money.

He said there would be up to seven construction teams on Phase 2 – the ‘Y’ route north of Birmingham – and one of them could start in Leeds.

It would head south and potentially link Sheffield to high speed rail earlier than planned.

The Transport Secretary rejected fears HS2 could fall victim to a post-Brexit slump in the economy.

He said at a cost of £3 billion a year the high speed rail project would swallow up less than one per cent of the Government’s total £700 billion annual capital spending programme.

Mr McLoughlin said:

I don’t know why some people think it’s not going to happen. We’re making good progress with London to Birmingham. I believe HS2 will be completed as stated.

Three billion pounds a year is not a huge proportion of Government annual expenditure and it’s very important for the future of the country. Fortunately the prime minister and Chancellor ‘get’ the importance of infrastructure in creating jobs and opportunities.

London to Birmingham would be operating in 10 years, he added.

Businesses across the West Midlands are being given a head-start as the race begins to bid for billions of pounds worth of contracts to build Phase One of HS2.

The region’s three Growth Hubs (Black Country, Coventry & Warwickshire, and Greater Birmingham & Solihull) are launching a programme of support aimed at local businesses in the running to take advantage of thousands of HS2 supply chain opportunities.

The programme will help develop business, engagement, support and funding solutions for business which stand to benefit from both HS2-specific opportunities as well as from the wider expansion and modernisation of the UK’s rail network.

Ian McLaughlan from Greater Birmingham & Solihull Growth Hub said local businesses were perfectly positioned to take advantage of the arrival of HS2:

There will be thousands of opportunities within the HS2 supply chain across many business sectors, requiring a range of capabilities, suitable for suppliers of all sizes and generated over a number of years.

Along with colleagues at the Growth Hubs in Coventry & Warwickshire, and the Black Country, we’ve developed a programme of support which will help businesses to understand the procurement process and prepare themselves to be ready for when the opportunities materialise.

The West Midlands has long been home to some of the UK’s most advanced engineering and manufacturing firms so businesses here really stand benefit most from an infrastructure project on the scale of HS2.  Our job is to make sure they’re in the box-seat and that’s what this support is about.

The programme of support was launched last week by the three Growth Hubs at an HS2 Supply Chain Road Show at The Manufacturing Technology Centre in Coventry.

The Coventry road show was one of 11 taking place across the UK, where HS2 Ltd will meet businesses large and small to explain the types of work packages that will be available and advise firms on how they can put themselves in the best position to bid for future contracts.

Department for Transport HS2 Facts:

• The Government gave the go ahead for HS2 on 10 January 2012.
• HS2 will be a Y-shaped rail network providing high speed rail links between London and Birmingham and on to Leeds and Manchester. HS2 will improve capacity across the rail network, shorten journey times between Britain’s major cities, boost the UK economy and create tens of thousands of jobs.
• In 2012, HS2 Ltd submitted proposals to the Secretary of State for Phase Two of the project from the West Midlands to Leeds and Manchester. The Government announced its initial preferred route for Phase Two on 28 January 2013 and the public consultation on these proposals ran from 17 July 2013 to 31 January 2014.
• In November 2015 the Government confirmed the section of the Phase Two route between Fradley, at the northern end of Phase One, and Crewe. Known as Phase 2a it will open in 2027 and deliver the benefits of high speed rail to Crewe; Manchester; North West England; North Wales and Scotland six years earlier than planned.
• MPs approved third reading of the High Speed Rail (hybrid) Bill for construction and operation of the line, between London and the West Midlands, in the House of Commons on 23 March 2016.  MPs voted 399 to 42 to agree the third reading of the Bill.
• The Government will make an announcement on the rest of the Phase Two route serving Manchester on the western leg, and the East Midlands, South Yorkshire and Leeds on the eastern leg in autumn 2016.