Annex 1: Review of the Government's case
for a High Speed Rail programme, Report by Oxera Consulting Ltd
for the Transport Select Committee, 20 June 2011
1 Introduction
1.1 The Transport Select Committee (TSC) is conducting
an inquiry into high-speed rail.[268]
This reportcommissioned by the TSC and prepared by Oxeraprovides
a review of the Government's case for a High Speed Rail programme.[269]
The report does not seek to conclude whether specific schemes
under the programme should go ahead; instead, it reviews the approach
to appraisal taken and highlights the areas of the case which
are most sensitive to the assumptions that have been made.
1.2 The High Speed Rail programme would be a
substantial capital investment for the UK; its construction and
operation would have a significant impact on transport users,
the economy and the environment. As such, there is a responsibility
to ensure that the programme and its specific schemes is well
justified. Aspects of the business case are highly technical yet
very important to the decision-making process. The TSC has therefore
commissioned Oxera[270]
to provide an independent review of the published economic case[271]
for the programme and a set of questions that the Committee could
use to probe the evidence base put forward by witnesses during
its inquiry.[272]
1.3 The economic case is just one part of the
overall business case for the HSR programme. As the Department
for Transport (DfT) has set out, in making transport decisions
there are five aspects that need to be considered: the strategic,
economic, commercial, financial and management cases. This report
focuses primarily on the economic casewhich considers economic,
social and environmental impactsand the economic appraisal
that underpins it.
1.4 Oxera has reviewed all published aspects
of the case for the High Speed Rail programme, including the economic
case, demand modelling reports, cost modelling, appraisal of sustainability,
and the wider economic impacts (WEIs). Oxera has had direct access
to the DfT and HS2 Ltd in order to seek clarifications on certain
technical points. The TSC has also provided Oxera with copies
of written submissions to its inquiry.
1.5 The grey boxes in each section below highlight
suggestions for questions that the TSC Members might choose to
use during oral questioning of witnesses throughout the inquiry.
1.6 Broadly speaking, the areas that questioning
is likely to cover include the following.
- What the programme is being
assessed againstHS2,
the Y network and the strategic alternatives are all being assessed
against a 'do the minimum' scenario. On this basis, both HS2 and
the best-performing strategic alternative provide twice as many
benefits as costs over a 60-year appraisal horizon. While HS2
is expected to cost nearly three times as much as the strategic
alternative, it is expected to deliver nearly three times as many
benefits. On the same basis, the Y network is estimated to provide
2.6 times as many benefits as costs, while the strategic alternative
to the Y network provides 1.4 times as many benefits as costs.
Any scheme with a BCR of greater than 2 offers 'high' value for
money on the DfT's scale.
- The case for the extra capacitythe
timing of any infrastructure upgrade along the routes proposed
by the government is dependent on demand growth projections. Timing
is sensitive to assumptions on economic growth, the performance
of other modes, and the degree to which demand is managed or allowed
to continue rising (both before and after the scheme is introduced).
- The quantified benefits deliveredthese
will depend on assumptions regarding the value of travel time
saved (in particular, the degree to which passengers are productive
on board trains, including services on the existing network),
and the degree to which productivity in the wider economy is enhanced
by the programme.
- The degree of non-monetised impactsthe
published Economic Case does not include items such as landscape
and carbon in its BCRs, although it might be possible in principle
to do so. Other itemssuch as land-use impacts, which may
have wider economic consequencesare not included due to
the lack of meaningful evidence supporting quantification, but
are assessed qualitatively. However, previous schemes (such as
the Jubilee Line Extension, discussed in Appendix 2) have delivered
considerable benefits derived from changes in land use around
stations.
- Scheme costsfor
HS2, the costs have been subject to fairly rigorous scrutiny,
and standard 'optimism bias' adjustments have been applied. The
detailed design and scheme costs for the Y network have been subject
to considerably less scrutiny. In addition, it is less clear how
the costs and risks associated with planned engineering works
for the strategic alternatives have been captured in the appraisal
of those schemes. Based on experience with the West Coast Route
Modernisation, the disruption associated with that type of investment
can be considerable.
- Who benefitsthere
is relatively little evidence presented on the regional and socio-economic
impacts of the programme.
1.7 The report has grouped the reviewed material
into related areas, rather than following a structure that corresponds
directly to each separate published document. Thus, the report
is structured as follows:
- section 2 reviews what the
programme is being assessed against;
- section 3 reviews the assumptions and approach
to appraisal that have been used;
- section 4 asks whether the standard approach
to appraisal is appropriate in this case;
- section 5 summarises; and
- additional (generally more technical) material
is provided in the appendices.
2 What is
the programme being assessed against?
2.1 Before assessing the Government's appraisal
of HS2 itself, it is necessary to be clear against what the business
case for the scheme is being assessed (the reference case). For
example, is the counterfactual no investment, or some other form
of investment, such as further improvements to the West Coast
Main Line (WCML)?
2.2 The Economic Case for HS2 and the Y network
has been evaluated against a reference case that includes some
short-term changes to the existing conventional services. This
reference case includes investments up to 2015 and other major
committed schemes (eg, Crossrail).[273]
While it is unlikely that there would be no further changes
to the conventional network beyond 2015 without the High Speed
Rail programme, the programme is not directly assessed against
more substantial long-term changes to the conventional network.
Instead these potential changes are presented separately as a
range of alternative strategic optionsBox 2.1 presents
the schemes proposed as part of the best-performing strategic
alternatives. Box
2.1 Best-performing strategic alternatives
According to the analysis undertaken for the government, 'Rail Package 2', and 'Scenario B' are the best-performing strategic alternatives to HS2 and the Y network, respectively. The text below describes the key schemes anticipated as part of these packages, which are additional to schemes in the Do Minimum scenario (against which both the high-speed and conventional alternatives are being compared). The schemes in the Do Minimum scenario are:
- station upgrade at Birmingham New Street, plus Bletchley area remodelling;
- nine-car Pendolino trains assumed to be lengthened to 11 cars;
- capacity increases on the WCML via new rolling stock delivered as part of the Inter-City Express Programme; and
- capacity increases on the Chiltern Line via train lengthening in the peaks.
The strategic alternatives are as follows.
Rail Package 2 (RP2)
This package takes the form of a series of infrastructure enhancements on the WCML, including:
- a Stafford area bypass; grade separation between Cheddington and Leighton Buzzard; three new platforms at Euston station; three extra platforms at Manchester Piccadilly (with grade separation at Ardwick); four-tracking Attleborough-Brinklow (including freight capacity works at Nuneaton); Northampton area speed improvements; and four-tracking Beechwood Tunnel to Stechford.
Scenario B
These upgrades consist of the WCML upgrade seen in RP2, plus upgrades to the Midland Main Line and East Coast Main Line (ECML).
- WCMLinfrastructure enhancements include a Stafford area bypass; grade separation between Cheddington and Leighton Buzzard; three new platforms at Euston station; three extra platforms at Manchester Piccadilly (with grade separation at Ardwick); four-tracking Attleborough-Brinklow (including freight capacity works at Nuneaton); Northampton area speed improvements; and four-tracking Beechwood Tunnel to Stechford.
- Midland Main Lineinfrastructure enhancements include electrification from Bedford to Sheffield; a freight loop facility between London and Bedford; reinstatement of four tracks between Bedford and Kettering; reinstatement of two tracks between Kettering and Corby; station area remodelling at Corby; remodelling and four-tracking in the Leicester area; and electrification and increased stabling capacity at depots.
- ECMLinfrastructure enhancements include throat remodelling at Kings Cross, reinstatement of a third tunnel and six-track approach; four-tracking Digswell-Woolmer Green; four-tracking Huntingdon-Peterborough; Peterborough area works (Werrington Flyover); four-tracking Stoke Junction to Doncaster; provision of a flyover for the Nottingham-Lincoln route at Newark; works to address low-speed points and restrictive signalling at Retford; electrification and upgrades for Retford-Sheffield; remodelling and extra platforms at Doncaster; and electrification of Hamble Junction to Leeds.
Source: Atkins (2011), 'High Speed 2 Strategic Alternatives Study: London to West Midlands Rail AlternativesUpdate of Economic Appraisal', February, p 11, and Atkins (2011), 'High Speed Rail Alternatives StudyStrategic Alternatives to the Proposed 'Y' Network', February, p. 15.
|
2.3 Primarily, the strategic alternatives are enhancements
to the capacity of the three main north-south lines out of London.[274]
This separation of the high-speed and conventional options and
their assessment against the same reference case essentially treats
the two options as independent, suggesting that only one will
be chosen. In other words, the options as constructed rule out
a combined solution.
2.4 Some of the key summary statistics from the
appraisal of these alternatives are compared against HS2 in Table
2.1.Table 2.1 Appraisal of high-speed and strategic alternatives (60-year
present value)
| | Economic Case
| Strategic alternatives
|
| | HS2
| Y network | London-WM Package 2
| Y network
Package B
|
A | Transport user benefits (£ billion)
| 17.5 | 38.3
| 6.6 | 12.0
|
B | Other (£ billion)
| 0.4 | 1.7
| 0.0 | 0.1
|
C | WEIs (£ billion)
| 4.0 | 6.3
| - | -
|
D | Indirect tax adjustment (£ billion)
| -1.3 | -2.7
| -0.6 | -1.1
|
e = a + b + c - d
| Total benefits (£ billion)
| 20.6 | 43.7
| 6.0 | 10.9
|
F | Total costs (£ billion)
| 24.0 | 44.3
| 8.9 | 18.7
|
G | Revenues (£ billion)
| 13.7 | 27.2
| 5.8 | 11.0
|
h = f - g | Net cost to government (£ billion)
| 10.3 | 17.1
| 3.2 | 7.7
|
e/h | BCR
| 2.0 | 2.6
| 1.9 | 1.4
|
Note: The two strategic alternatives shown here are
enhancements to the conventional network rather than new conventional
lines, and are those with the highest BCR of those assessed by
HS2 Ltd. Various rows have been omitted. The indirect tax adjustment
on the strategic alternatives means that the transport user benefits
do not equal the total benefits. Values have been taken from the
model output spreadsheets, and in some cases the presentation
means that the values differ from those presented in the Economic
Case.
Source: HS2 Ltd.
2.5 Table 2.1 shows that the reported BCRs for
the strategic alternatives are lower than those for high-speed
rail. Using the DfT's BCR classification system, the high-speed
options would both be assessed as 'high' value for money (VfM)
and the two strategic alternatives as 'medium' VfM.[275]
Based on these stated BCRs, the high-speed options appear to offer
better VfM than the strategic alternatives, and both options are
preferable to the reference case.
2.6 At this juncture, it is worth noting that
the recently published Report of the Rail Value for Money Study
argues that 'there is a need to ensure that a full range of whole-system
options is considered' and, specifically, that 'in common with
other transport sectors, there should be an end to "predict
and provide" in the rail sector, and there should be a move
towards "predict, manage and provide", with a much greater
focus on making better use of existing capacity.'[276]
The study recommends in particular that planning in the industry
should consider demand management options, where appropriate.
In this context, it is unclear to what extent the case (and in
particular the opening year) for the High Speed Rail programme,
and the alternatives against which it is being assessed, have
taken into account whether demand management has the potential
to contribute to resolving the capacity issues that the schemes
are intended to alleviate.
Q 1: To what extent would demand management
on the conventional network delay the need for extra rail capacity?
2.7 There are some potential inconsistencies
between the assessment of the strategic alternatives and high-speed
options. The business case for the High Speed Rail programme covers
WEIs, which include the benefits of higher employment densities
(agglomeration), labour market benefits (such as improved labour
supply) and other benefits. Oxera understands that the largest
component of the WEIs for the high-speed options is agglomeration,
which arises primarily as a result of releasing capacity for short-distance
services.
2.8 In contrast to the high-speed options, the
analysis of the strategic alternatives appears to omit WEIs. In
general, some WEIs would be expected from the strategic alternatives,
although the agglomeration benefits would be expected to be smaller
than those for high-speed rail. This is because the ability of
the strategic alternatives to increase capacity on the conventional
network for commuter services and simultaneously improve long-distance
capacity may be limited by the continued use of existing stations
for both services. Given that agglomeration benefits are driven
by increased capacity for commuter services, these benefits from
the strategic alternatives would be expected to be small.
2.9 The WEIs for the London-West Midlands strategic
alternative Package 2 were previously estimated in the 2010 business
case.[277] If these
were to be added to the current BCR estimates for Package 2 (ie,
1.9), its BCR would reach 2.0the same ratio as HS2.
Q 2: What is the latest estimate of WEIs for
the conventional strategic alternatives to HS2?
2.10 The presentation of transport user benefits
in the published reviews of the strategic alternatives implies
that crowding and other transport user benefits are omitted.[278]
However, HS2 Ltd has informed Oxera that these benefits, with
one exception, are included in the transport user benefits, but
that the disaggregation is not shown.[279]
2.11 The exception relates to the impact on reliability.
A reliability benefit has been included for high-speed services.
This is because all of these services would run at the same speed,
which tends to improve reliability relative to lines with a mix
of speed services, as per the conventional network. However, no
impact on the reliability of the conventional lines is included
for either the high-speed options or the strategic alternatives.
HS2 Ltd has informed Oxera that to conduct these estimates for
the conventional line would require more detail than is currently
available at this stage in the development of the scheme. The
impact of incorporating reliability changes for the strategic
alternatives is currently unclear. It is possible that the strategic
alternatives could reduce the reliability of conventional services.
Q 3: Is further work progressing to estimate
the impact on the reliability of conventional services for both
the high-speed rail options and for the strategic alternatives?
2.12 The BCRs for the high-speed options and
strategic alternativesas shown in Table 2.1are little
different. The economic case for proceeding with HS2 itself is
contingent on funding being available for costs that considerably
exceed the strategic alternatives, which offer broadly similar
value for money on conventional rail. This suggests that the case
for the High Speed Rail programme over the strategic alternatives
rests on estimates of the net benefits and option values of the
extension to a Y network. However, the estimates of the benefits
from the Y network are described as a 'high level assessment',
with a substantial element 'extrapolated from our experience of
work on HS2 (London - West Midlands)'.[280]
Q 4: Is it appropriate to focus on the benefits
of the Y network given that its case has been assessed in less
detail?
Q 5: Has further work been completed to improve
the robustness of the case for the Y network?
2.13 In the same way that the construction of
HS2 would enable the construction of the Y network and its associated
benefits, it is possible that the Y network would create a 'valuable
option' for further extensions. For example, future potential
extensions from Scotland are likely to have greater benefits if
they can link to a high-speed Y network at Manchester and/or Leeds
compared with linking to a conventional network.
Q 6: Has the prospect of benefits from further
extensions to the Y network been considered and analysed?
2.14 The Economic Case does not consider whether
investments in road networks would be a viable alternative to
a high-speed rail network; however, it is based on the Government's
previous assessment of the potential benefits and costs of improving
road (and rail) networks, which indicated that major upgrades
to existing road networks would provide much less capacity, more
disruption and fewer connectivity and journey time benefits than
a new rail line.[281]
Therefore, HS2 Ltd notes that it has not considered upgrades to
the road network on the basis of the Government's decision that
a new high-speed rail network would better support its strategy
to promote economic growth.[282]
It is unclear to what extent this decision has been subject to
full appraisal.
3 How robust
are the assumptions used?
3.1 Economic appraisal of future schemes inevitably
involves some uncertainty due to its reliance on forecasts. The
robustness of the assumptions and forecasts used can therefore
have a significant impact on the estimated costs and benefits,
and hence the BCR. This section reviews the implementation of
appraisal of the High Speed Rail programme and the assumptions
that underpin the assessment of transport user benefits, revenues,
costs, wider economic impacts, environmental effects, and distributional
impacts.
Transport user
benefits
Use of travel
time
3.2 The largest component of the monetised estimated
benefits of high-speed rail comes from the time savings of business
travellers (for HS2 these are £5.7 billion out of the £20.6
billion of total benefits, or 28%, excluding the reliability and
wait time components).[283]
The value of these time savings depends on the assumption around
the use of travel time.
3.3 The assessment of benefits assumes that workers
cannot use their journey time productively since this is the standard
assumption used in transport appraisal. However, the Economic
Case acknowledges that:
[with] the advent of technologies such as laptops
and 'wifi' internet networks which allow people to work on trains
we recognise this is an area of debate.[284]
3.4 Research also shows that the level of productivity
that can be achieved on a train is very similar to that which
can be achieved at a normal workplace. For instance, the Mott
MacDonald IWT Consortium study in 2008 found that the average
productivity factoror the amount of working time needed
if work were done at the normal workplace relative to that on
a trainis between 96% and 98%, depending on the duration
of the train journey.[285]
However, this is at odds with earlier studies, which have suggested
that around 10-20% of rail travel time may be productive.[286]
There are three potential effects of including productive use
of travel time in the appraisal:
- it would reduce the benefits
attributed to the reduction in travel time because the value placed
on these time savings is dependent on how much the time spent
travelling costs the employer, which would then be negligible/significantly
lower;
- it would increase the benefits for passengers
remaining on conventional services, who would experience less
crowded conditions (currently, the only benefit from reducing
crowding is reduced discomfort);
- it would increase the benefits when passengers
switch from other modes if they can work more productively on
HS2 than on their previous mode of travel.
3.5 The Economic Case notes that if productive
use of travel time is taken into account, the reduced productivity
from having to stand on trains should be taken into account.[287]
The sensitivity test in Chapter 7 explains that if the business
value of time is halved and if crowding impacts are adjusted to
reflect the loss of value experienced by business passengers travelling
in crowded conditions (instead of using commuter values for business
passengers), the BCR would increase slightly.
Q 7: To what extent do you consider that travel
time should be considered productive? How realistic is the sensitivity
test in Chapter 7 of the Economic Case?
Value of travel
time
3.6 The valuation of travel time for business
travellers used in the appraisal is £45 per hour in 2009
prices (£37 per hour in 2002 prices). The basis for the estimate
is 2002 earnings data applied to 1999-2001 National Travel Survey
data.[288] The April
2011 document published by HS2 Ltd notes that there is some survey
data evidence to suggest that business travellers value time more
than the values used in the business case.[289]
3.7 Oxera has tested a sensitivity whereby the
value of time for business users is reduced by one-third. This
had the impact of lowering the BCR for HS2 to 1.7 with WEIs (1.3
without WEIs), or, for the Y network, to 2.1 with WEIs (1.8 without
WEIs).
3.8 Oxera also notes that the DfT uses a uniform
value of time across the country, but is keeping under review
the option of reflecting regional variations in earnings.[290]
Should it decide to include regional variations, this would alter
the business case, depending on the balance of travel between
regions with higher and lower incomes.
Q 8: How confident are you in the estimated
values of time?
Revenues
3.9 Calculating the expected revenues that will
be generated by HS2 requires two interacting components to be
estimated: demand forecasts and fare levels.
Demand forecasts
3.10 The demand forecasting element of the appraisal
appears to be one of the most developed elements of the business
case. The forecasts are based on a number of bespoke passenger
demand forecasting models, with inputs from standard DfT models
and standard rail industry guidance.[291]
3.11 The broad approach to demand forecasting
consists of several steps. First, demand forecasts for the conventional
network from now until 2021 and 2043 have been estimated. This
is necessary in order to estimate the base level of demand on
the conventional network in the absence of high-speed services.
Second, the rate of demand growth following opening of the high-speed
line is estimated. Third, an assumed cap to rail demand growth
is applied beyond which there is no further growth in demand for
long-distance railthis is intended to reflect saturation
of rail demand.
3.12 However, the demand forecasts inevitably
rely on a range of assumptions, and these continue to evolve.
There have been regular revisions, the latest of which were published
in April 2011.[292]
3.13 The important points arising from the latest
demand forecast include:
- the greatest proportion of
trips on HS2 is abstracted from the conventional network (65%);
- a cap on demand growth (at roughly double the
current WCML levels) is implemented in 2043;
- a reduction in overall demand growth from 1.4%
to 1.1% per annum reduces the BCR of HS2 to 1.3 (excluding WEIs).
3.14 The approach to modelling has been based
on industry standard guidance, known as the Passenger Demand Forecasting
Handbook (PDFH).[293]
However, in other contexts, the reliability of PDFH forecasts
has been questioned, particularly because of a perception that
it has systematically underestimated the generally high levels
of demand growth experienced by the industry in the last six to
seven years. A number of alternative demand forecasting options
exist, including versions of the PDFH[294]
and other customised demand models (see Appendix 1 for further
details).
Q 9: How dependent is the business case on
the standard forecasting framework? Have alternative (especially
non-PDFH) rail demand forecasting frameworks been tested?
3.15 The demand forecasts appear to be one of
the areas in which sensitivity tests have been applied most thoroughly.
HS2 Ltd has tested sensitivities on both the rate of growth and
the level of demand at which growth has been capped. These are
tested as direct assumptions on demand, and sensitivities on exogenous
growth factors are tested separately. See Table A1.1 for a summary
of these sensitivities.
3.16 HS2 Ltd has elected to cap demand growth
for rail travel. This decision is partly as a function of the
modelling, which, without a cap would predict unconstrained demand
growth. The cap is equivalent to approximately double the current
level of demand on the WCML. The justification for this cap is
somewhat arbitrary; however, HS2 Ltd has tested scenarios (replicated
in Table A1.1) which show that the implementation of the cap has
an important impact.
Q 10: How was the level of the demand cap
determined? What evidence is there to support it being set at
the level selected?
Fare levels
3.17 The base-case scenario for the modelling
is long-term rail fare growth of RPI + 1%. This is equivalent
to the current cap on annual increases in regulated fares. In
the description of changes to the modelling published in April
2011,[295] it is stated
that the assumptions in the model were updated to incorporate
the short-term impact of RPI+3% for three years from 2012, as
announced in the 2010 Comprehensive Spending Review.[296]
The stand-alone impact of this does not appear to be described
separately from those of other changes.
3.18 HS2 Ltd has tested a scenario of RPI + 2%
in the long term, and found that this caused the BCR (without
WEIs) for HS2 to fall to 0.9. This indicates that the assumption
on rail fare growth is important.
3.19 Despite the real-terms increases in fares
experienced since 2004, the Secretary of State for Transport has
indicated that, in the long term, the intention is for there to
be an end to above-inflation fare increases.[297]
Fare increases at or below inflation would not be exceptionalindeed,
before January 2004, regulation of fares was at the level of RPI
- 1%. Given the change in BCR resulting from the sensitivity of
RPI + 2%, it may be useful to test other scenarios, such as RPI
+ 0%, or at least anticipate the optimal fares strategy for the
new services and reflect this in appraisal.
Q 11: Have other scenarios of higher or lower
fare increases been tested?
3.20 The fare levels assumed on the conventional
and high-speed services are the same.[298]
It seems unlikely that the optimal fare strategy will be equivalent
pricing between the two types of service, given passengers' willingness
to pay more for faster journeys. For example, there is currently
a fare differential for passengers using domestic HS1 services
relative to passengers using conventional services between the
same origin and destination. It would therefore seem appropriate
to test a scenario based on differential pricing between the high-speed
and conventional lines.[299]
This is particularly the case if there is a desire to use fares
as part of a demand management programme designed to 'lock in'
the benefits of the new capacity delivered by the High Speed Rail
programme.
3.21 The impact of differential pricing could
be to increase revenues and hence reduce the net cost to government.
Whether this improves VfM would then depend on the relativity
of the revenue increase to the impact on the reduction in benefits
from the demand response to premium fares. It may also be the
case that fares for using the high-speed network could be used
to 'lock in' the benefits of the High Speed Rail programme.
3.22 Premium fares for high-speed services may
also have distributional consequences. The consequence of such
fares will tend to shift the cost burden towards users and away
from general taxation. If the users of high-speed rail services
are generally expected to come from more affluent socio-economic
backgrounds, this may be a more progressive form of funding for
a high-speed rail scheme (as is further discussed later in this
section).
Q 12: Has further work on premium fares for
high-speed services been conducted since 2010? How would premium
fares affect expected revenues? In particular, is there a role
for demand management to 'lock in' the benefits of the High Speed
Rail programme?
Costs
3.23 High-speed rail infrastructure and rolling
stock involve substantial costs that fall into three categories:
construction costs, rolling stock costs and operating costs.
3.24 The construction costs include the cost
of tunnels, rail systems and land purchase. They are by far the
largest component of the total scheme costsin the Economic
Case for HS2, they are estimated at £16.8 billion out of
£24 billion of total costs, or 70%.
3.25 HS2 Ltd has approached the estimation of
these construction costs by estimating the procedures needed for
each specific component of the scheme, as identified in the detailed
route planning. For each route section and station, HS2 Ltd has
costed the scope of work based on a detailed route plan and section
drawings.
HS2 Ltd has undertaken considerable benchmarking
of infrastructure costs by type against costs in other countries.
Benchmarked costs have been allocated by section of route, and
optimism bias adjustments appear to have been derived from standard
Green Book guidance.[300]
Q 13: Has the benchmarking suggested areas
where costs could be reduced through efficiency savings?
3.26 The process of construction of a high-speed
line will involve disruption to the existing conventional services.
HS2 Ltd estimates that the cost of possession management and compensation
for operational disruption is £195m.[301]
The cost of any unplanned disruption is presumably captured within
the optimism bias.
3.27 However, there is a question as to whether
the degree of planned disruption is greater for high-speed rail
or for the enhancement to the conventional network under the strategic
alternatives. Works associated with the WCML upgrade caused considerable
disruption to existing services, with revenue growth on the WCML
falling considerably behind that seen on the parallel East Coast
Main Line during the upgrade works.
Q 14: Has there been an assessment of the
relative degree of planned disruption between the high-speed and
strategic alternative options?
3.28 The second cost category is that associated
with the purchase of rolling stock. These costs are estimated
as £2.8 billion (or 12%) for HS2. Two types of rolling stock
would need to be purchased: one for use exclusively on HS2 (a
'captive' set) and the other for use on both HS2 and the conventional
network (a 'classic-compatible' set). The costs for the captive
set have been derived on the basis of existing fleet types, and
with a low optimism bias. For the classic-compatible set, a 50%
premium and a larger optimism bias have been appliedthis
appears intuitively to be a conservative assumption for the hybrid
fleet, although it is uncertain how much such sets would cost.
3.29 The final cost category is operating costsie,
the costs associated with the day-to-day running of the high-speed
services, which include factors such as the cost of the train
crew. It is less clear what benchmarking has been undertaken in
relation to these coststhey appear to have been derived
from appropriate industry assumptions (eg, in relation to station
staff, and using HS1 operations and maintenance costs), but it
is unclear what assumptions are being made in relation to efficiency
improvements in rail operating costs over the period between now
and the start of operations.
3.30 Asset renewal rates are currently included
in ongoing costs, although it is not clear where the renewal costs
have been derived from, or whether the renewals profiles are reasonable.
Q 15: How have asset renewal rates been derived?
There is considerable uncertainty surrounding the
costs of the full Y networkHS2 Ltd has used a 'higher level
approach'.[302]
This relates in particular to the costs of delivering a service
pattern on the Y network, with no work having yet been undertaken
on train diagrams, which would enable detailed assumptions to
be made about rolling stock purchases and operating costs. This
might be a concern if the case for HS2 rests on its ability to
enable the full Y network to be built.
Q 16: What progress has been made in improving
the robustness of the cost estimates for the Y network?
It is unclear how HS2 Ltd has calculated the cost
savings that it is intending to make as a result of lower levels
of train service being required on the conventional network. For
example, it assumes £78m of savings per annum from the withdrawal
of Pendolino services on the WCML, but it is not clear that this
is a full saving (since it essentially assumes that Pendolinos
are reused to displace fully an equally expensive service elsewhere
on the network).
Q 17: How have the cost savings on the conventional
network been estimated?
Wider economic
impacts
3.31 WEIs affect the wider economy and not necessarily
the transport users themselves. They include effects such as agglomeration.
The WEIs of HS2 are assessed in the Economic Case as £4 billion,
with a conservative rough estimate of a further £2.3 billion
from the Y extension to Leeds and Manchester.
3.32 The WEIs for HS2 appear to have been calculated
in line with standard appraisal guidance. The agglomeration benefits
are based on outputs from the demand modelling. The imperfect
competition benefits are derived as 10% of business user benefits,
as per standard appraisal guidance. The imperfect competition
benefit reflects the fact that prices in an imperfectly competitive
market exceed costs, implying that the value of benefits exceeds
the reduction in costs.
3.33 HS2 Ltd approaches the issue of WEIs using
bottom-up analysis, in line with DfT guidance.[303]
Other studies of high-speed rail in Europe and elsewhere have
looked at impacts top-down, for example using evidence on job
creation and property prices in local economies.[304]
Such studies have produced estimates of the beneficial impact
on city and regional economies of up to 3% of local GDP. The HS2
estimates are well below this level, but nonetheless illustrate
the upside potential involved in such calculations.
3.34 The WEIs have not been subject to any of
the sensitivities tested elsewhere in the appraisal.
Agglomeration
3.35 The agglomeration benefits identified in
the Economic Case account for £3 billion of the £4 billion
of WEIs. HS2 Ltd has informed Oxera that most of these benefits
arise from freeing up capacity for short-distance commuter services.
Since these WEIs are predicated on capacity rather than travel
time, the benefits arise not as a result of high-speed services
per se, but rather owing to the ability to release capacity for
additional commuter services. However, as already stated, no equivalent
WEIs have been included in the assessment of the strategic alternatives.
3.36 The assessment of agglomeration impacts
was informed by a report by Daniel Graham and Patricia Melo, economists
at Imperial College London.[305]
The report focused on the agglomeration benefits from improved
travel times of high-speed rail itself and found that these benefits
would be 'very small indeed'. [306]
This is consistent with the agglomeration benefits included in
the Economic Case being derived primarily from additional commuter
capacity rather than inter-city time savings.
Q 18: Has there been analysis equivalent
to that of Graham and Melo (2010) for the agglomeration benefits
from additional commuter capacity? If so, does it provide indications
of the robustness of the estimate of £3 billion agglomeration
benefits?
Non-monetised factors
3.37 Some factors are omitted from the BCRs calculated
in the Economic Case owing to a lack of hard quantitative evidence.
These factors are potentially significant and may therefore be
expected to yield additional impacts. However, monetisation of
these benefits in the BCRs may be difficult or inappropriate (although
some of the written submissions to the TSC attempt to place values
on some of thesesee Appendix 1). As such, these factors
will need to be considered elsewhere in the overall business case
for high-speed rail. This is in line with comments made by HS2
Ltdfor example, with regard to land-use changes (such as
investment in new office space and housing developments being
constructed in the vicinity of high-speed interchanges), it stated
that:
While these [land-use changes] have not been included
in the monetised business case for HS2, they are deemed to be
important considerations in the decision making process.[307]
3.38 Some of the other factors not monetised
in the Economic Case are described below.
- The number of direct jobs created
by the construction and operation of HS2. If these jobs were included
in the appraisal, it is not clear whether there would be an impact
on the BCR, given that about 85% of the jobs would be in construction,
and therefore likely to be temporary, with even the permanent
ones possibly being displaced from elsewhere. (Although displacement
from one area to another may not change the overall BCR, it may
affect regional inequalities.) The Appraisal of Sustainability
(AoS) also states that jobs lost at other railway stations due
to the HS2 scheme will be likely to be replaced elsewhere, but
the evidence base for this assumption is not provided, so it might
be more appropriate for these lost jobs to be subtracted from
the total number of jobs created.
- The ability of workers to access higher-productivity
jobs may be enhanced because of reduced journey times from high-speed
rail.
- The local development/regeneration impacts around
HS2 stations, including:
- land-use changes leading to
greater concentration of employment around high-speed rail hubs,
which could yield additional productivity benefits;
- home/building demolition and adverse ecological
impacts;
- the net additional floor space (office, residential,
retail, hotel, education, industrial) associated with HS2 has
been forecast, but is not included in the appraisal. In addition,
this is calculated as the future floor space with HS2 compared
with the future floor space in the absence of HS2, and therefore
does not seem to account for the existing floor space that would
be lost as a result of the construction of the high-speed rail
link.
- The benefits of increased potential
for freight traffic due to released capacity on the WCML; the
AoS explains that there is scope for freight on the Southern section
of the WCML.
- The AoS quantifies the costs of operational airborne
noise at residential areas only, thereby excluding a detailed
appraisal of construction noise, airborne noise at other sensitive
locations, vibration, ground-borne noise, and noise from HS2 stations
and depots.
3.39 The overall impact of these effects is difficult
to ascertain.
Q 19: Are there some WEI factors that are
not in standard guidance that could have been included?
Q 20: Is it possible to suggest a likely order
of magnitude for these omitted benefits?
WEIs of the Y
network and strategic alternatives
3.40 There is no formal published appraisal of
WEIs of the Y network, nor of the extent to which the extensions
to Leeds and Manchester would displace or add to benefits from
the HS2 line. The approach reported in the HS2 Economic Case merely
assumes that there will be additional wider benefits equivalent
to half of what would be expected if they were in similar proportion
to the extra conventional transport benefits for business from
the extensions.
3.41 The equivalent benefits for the strategic
alternatives do not appear to have been calculated.
Environmental
impacts
3.42 The operation and construction of a high-speed
line will have impacts on both the local and wider environment,
one of the most important being that on carbon emissions. This
will be driven by the energy efficiency of high-speed services
relative to conventional services and other modes, the extent
of modal shift, the level of new trip generation, and the use
of freed-up capacity for other modes/conventional services.
When assessing operational and embedded carbon emissions,
the primary sources of emissions are often the same cost factors
that have the most uncertain estimates. This leads to a wide range
of potential aggregate carbon impacts from HS2. Assuming the central
cost estimates under two different sets of assumptions, this range
is from +£870m to -£2,022m (in 2009 prices). This range
becomes even wider if, under the same assumptions, the low and
high projected costs are used instead of the central case.
It is unclear whether the strategic alternatives
have been subject to an appraisal of their carbon impacts.
Q 21: Would it be possible to reduce the estimated
range of potential carbon emissions?
3.43 The quantification of carbon emissions in
the AoS uses July 2009 guidance published by the Department of
Energy and Climate Change (DECC).[308]
In the revised approach to appraisal published by the DfT, the
carbon valuation has been updated to reflect the values published
by DECC in June 2010.[309]
Q 22: Will the estimated carbon values in
the AoS be updated to reflect this change?
The extent of modal shift is a key factor in determining
the level of carbon emissions. A shift in passengers from domestic
aviation to high-speed rail would lower aviation emissions if
the aviation services were reduced as a result (or smaller or
more efficient planes used for the remaining passengers). Therefore,
the AoS considers a number of scenarios related to the impact
on aviation services from high-speed rail. One scenario considered
is that there would be no change to aviation emissions if the
reduction in passenger numbers on any one flight were not enough
to discontinue the service. Another scenario proposed in the AoS
is that slots previously used by the flights predicted to be displaced
by HS2 remain vacant. However, this is unlikely to occur due to
the excess demand for capacity at the main airports in the South
East (Heathrow and Gatwick).
Q 23: Is it correct that there may be a net
increase in carbon emissions because there is no reduction in
the number of flights and additional HS2 services?
The estimation of the greenhouse-gas effects of HS2
uses the July 2009 DECC guidance, which includes projections of
traded and non-traded costs of carbon up to 2050.[310]
The appraisal then assumes that the cost remains at the 2050 level
for the rest of the operational life of the scheme (ie, until
2086).
Q 24: If changes in the cost of carbon beyond
2050 are considered, would this significantly affect the estimates?
3.44 The case for high-speed rail is affected
by the impacts on carbon emissions that are quantified, although
these do not appear to be included in the BCR. Given the
very limited anticipated substitution from air to rail (6%) and
car (7%), the substantial volume of new trips (22%) suggested
for HS2, and the lower rates of emission from slower trains, the
classic rail options could well involve lower overall emissions. This
would bring the comparison of BCRs closer together for the Y network
and generate an advantage for the classic rail options to Birmingham.
Many of the ecological, biodiversity and other such
assessments are undertaken at a high level only, since the detail
required to carry out a full assessment is unavailable, according
to the AoS report.
Q 25: Will these assessments be carried out
when more data becomes available in order to have a better indication
of the impacts, and would these assessments be likely to have
a significant impact on the BCR of the scheme?
3.45 The AoS does not explicitly consider the
landscape impacts of building a new high speed line, which HS2
Ltd rightly believes would be important. Neither are such effects
included in the calculated BCRs, and the extent to which they
would reduce the measured value for money of a new line is therefore
unclear.
3.46 Studies do exist of the values attached
by people to particular kinds of landscape, and Government has
in recent years proposed and undertaken new studies. It should
be possible to produce broad estimates of the order of magnitude
of landscape costs for a new high speed line.
Q 26: Have estimates been made of the landscape
impacts of a new high speed line, and would these be likely to
have a significant impact on the relevant BCRs? Are such assessments
planned?
Distributional
impacts
3.47 The impact of high-speed rail is unlikely
to be uniform across the UK population; rather, the effects will
differ across socio-economic groups and regions.
Socio-economic
impacts
3.48 In assessing the case for HS2, it would
be of interest to consider the potential socio-economic impacts
on both users and non-users as a result of construction of the
line.
3.49 HS2 could have distributional impacts if
only certain socio-economic groups benefit from travel on the
proposed route. HS2 Action Alliance claims that 47% of long-distance
rail trips are made by the top household income quintile (with
a gross household income of over £70,000 per annum on average).[311]
Other studies corroborate the assertion that high-speed rail tends
to attract individuals from higher-income groups.[312]
While the Economic Case does not discuss this point, it estimates
that about 67% of the transport user benefits (of the Y network)
are likely to go to business usersie, individuals who tend
to be from higher-income groups.[313]
If users are predominately from high-income groups, they will
in general have a higher ability and willingness to pay for these
journeys. This may suggest that a premium-fare strategy is appropriate
(as discussed in paragraphs 3.20 to 3.22), and that more weight
might need to be placed on the wider economic benefits of providing
more capacity for business travel.
Q 27: Has there been consideration of the
types of user, in terms of socio-economic status, who will benefit
from travel on HS2?
Q 28: Are there expected to be significant
distributional effects between socio-economic groups as a result
of the construction of the HS2 line?
Geographic/regional
HS2 Ltd stresses the need for high-speed rail to
be fully integrated into local and regional economic and spatial
strategies in order that maximum economic benefits are obtained.[314]
This is likely to be an important enabling factor in the government's
desire to see the high-speed network changing the economic geography
of the country:
The Government believes that high speed rail can
play an important role in promoting valuable strategic change
in the economic geography of Britain, supporting sustainable long-term
growth and reducing regional disparities.[315]
In practice, there are likely to be higher benefits
in the vicinity of high-speed rail hubs, so the 'regeneration'
benefits to those areas are likely to be understated. However,
these may be offset by economic losses in other areas, including
locations not served by the high-speed linethe 'tunnel
effect'.[316]
Thus, the London and Birmingham economies might benefit
partly at the expense of areas not served by the new scheme. The
precise impacts will depend on the reallocation of conventional
services on the WCML and elsewhere.
Q 29: What estimates have been made of the
adverse economic impacts on areas not served by the new high-speed
line?
3.50 The AoS does note that there could be inter-
and intra-regional redistributive impacts, and that people may
be attracted to locate around HS2 stations in London or Birmingham,
at the expense of other parts of those cities or other cities
in the UK. In its April 2011 document, HS2 Ltd forecasts the monetised
impacts of transport benefits and WEIs by region, calculating
that 34% of benefits (by origin of trip) will go to those from
London. It also notes that the longer-distance rail users who
will be the principal beneficiaries of high-speed rail are likely
to be from London, Birmingham, Manchester and their surrounding
areas.
3.51 However, a number of impacts of the proposed
scheme have been assessed at the route level only. This prevents
a clear indication of whether the benefits or costs are concentrated
in certain regions. Some of these factors include:
- the change in carbon emissions
as a result of modal shift and change in total emissions (the
carbon emissions from construction have been assessed by route
section);
- planned regional growth (major housing and other
developments have been assessed by route section);
- the impact of the scheme on reducing health inequalities.
3.52 When the AoS does assess benefits and costs
by route section, it is not clear whether certain regions benefit
at the expense of others. Furthermore, the only regions that are
assessed in detail in terms of economic impacts are the catchment
areas surrounding key stations on the line. Some of the written
submissions to the TSC that cover specific regions are summarised
in Appendix 1.
Q 30: What is the relative size of the economic
impacts on cities expected to be served by the high-speed network?
What proportion of these economic impacts is abstracted from other
regions not served by the high-speed network?
4 Is the standard
approach to appraisal appropriate and do other similar projects
provide useful lessons?
Is the standard
appraisal approach appropriate?
4.1 Current appraisal guidance is designed to
be applicable to all manner of transport schemes, whether they
are small or big, for cycling or rail. There is therefore a question
as to whether this standard approach should be adjusted for assessing
a unique major transport project, such as high-speed rail. Oxera
understands that, in due course, the appraisal of the high-speed
network will be adjusted to reflect the revised approach to appraisal
recently published by the DfT. This approach put forward in this
revised guidance recommends five separate components to make up
the full business case: the Strategic Case, Economic Case, Commercial
Case, Financial Case, Management Case. The AoS uses several different
appraisal techniques to evaluate the impact of high-speed rail,
including WebTAG guidance, strategic environmental assessments,
environmental, health and equality impact assessments, sustainability
appraisal, and other similar techniques.
4.2 Appendix 2 looks at some more technical issues
relating to the approach to appraisal.
Are there lessons
from other major transport projects?
4.3 Oxera has briefly reviewed evidence from
other major transport projects to examine whether there are any
apparent systematic trends that would imply that ex ante project
appraisals tend to over- or underestimate any specific parts of
the appraisal (see Appendix 2).
4.4 Overall, a number of lessons can be drawn
from ex post assessments of other high-speed rail and rail schemes.
Planning and taking account of the environmental, economic, and
social factors seem to be integral to the success of the scheme.
Furthermore, a consideration of the main uncertainties or risks
surrounding the costs and revenues can lead to more robust estimates.
At the same time, in almost all schemes considered, unforeseen
circumstances have arisen and contributed to higher costs or lower
revenues than expected, although some schemes have still delivered
good VfM. The optimism bias adjustments applied to the appraisal
of the High Speed Rail programme are designed to mitigate some
of these risks at this stage of the process.
Q 31: Do the generally favourable ex post
assessments of major rail projects (eg, the Jubilee Line Extension)
suggest that the bottom-up BCRs are conservative estimates?
Q 32: Are the bottom-up estimates for the
High Speed Rail programme consistent with the top-down estimates
from other high-speed rail examples?
5 Summary
5.1 Oxera's review has highlighted that there
are several aspects to the business case for high-speed rail,
including monetised and non-monetised elements.
5.2 The monetised estimates are surrounded by
a degree of uncertaintyindeed, the sensitivities published
by HS2 Ltd for HS2 show a range of 0.7-2.7 for the BCR excluding
WEIs (see Table A1.1) and this simply looks at each sensitivity
in isolation. The overall balance of non-monetised impactswhich
include landscape, carbon and changes in land useis difficult
to ascertain, but is likely to become more apparent as the understanding
of the impacts improves over time, and as HS2 Ltd adjusts the
appraisal to reflect the DfT's revised approach to such assessments.
5.3 Overall, the case for the High Speed Rail
programme seems to depend on whether and when the capacity is
needed, the selection of the best VfM approach to delivering that
capacity, the degree of uncertainty around the monetised benefits
and costs of the preferred options, and judgements on the balance
of evidence relating to non-monetised items, such as environment
and regeneration impacts (which are likely to be substantive in
their own right but not fully set out in the Government's assessment).
A1 Further
detail: Are the assumptions used robust?
Other transport
user benefits
A1.1 Section 3 covered the travel time savings.
The remaining transport user benefits fall into the following
categories: reliability, crowding, other rail user impacts (which
include wait time penalties and access/egress time), road decongestion
and other impacts. The first four of these are also influenced
by the value of time estimates.
A1.2 The assessment of other transport user impacts
includes the benefits associated with local air emissions, noise
and accidents/safety, which are valued as being £37m (for
HS2), equal to 0.1% of the total net benefits. It is the value
of the HS1 link, at £350m, that makes up the majority of
the stated benefits of other impacts.[317]
Demand
Forecasting framework
A1.3 The forecasting framework used by HS2 Ltd
has primarily been the PDFH, which provides a framework and recommended
parameters for assessing demand changes as a result of changes
in rail service offering and in external factors.
A1.4 One of the main issues with the PDFH is
that it is based on a constant elasticity specification. This
means that increases in demand drivers continue to have an unabated
impact on demand. As a result the PDFH is generally recommended
for use in assessing incremental changes (<10%) in demand drivers.
A1.5 In the modelling undertaken for HS2, the
models are based on PDFH v4.1 and PDFH v4.0. A more recent update
(PDFH v5.0) has been released by the Passenger Demand Forecasting
Council but is not yet part of the DfT's recommended guidance.
The DfT is currently in the process of testing these estimates.[318]
A1.6 Other non-PDFH forecasting frameworks exist,
including the Revisiting the Elasticity Based Framework study
carried out by Arup and Oxera on behalf of the DfT, Transport
Scotland and the Passenger Demand Forecasting Council.
Effect of other
modes
A1.7 The demand and cost of other modes is a
further determining factor in the demand forecasts for rail. The
air demand estimates are informed by SPASM (the DfT's standard
aviation model) and the highway demand informed by the National
Transport Model (NTM) and National Trip End Model (NTEM).
A1.8 A sensitivity included in the Economic Case
is for a 50% increase in fuel duty above the current forecast.
This has the impact of increasing the BCR (without WEIs) to 2.4,
which suggests that the cost of road travel is an important determinant
of the case for HS2. An increase of 50% appears to be a large
increase to test; however, fuel duty is only one component of
the overall cost of road travel. Thus, flexing this single component
of road travel cost does not fully capture all the road costs
that travellers might face. Potentially an increase in the total
cost of road travel should have been tested.
A1.9 One of the other components of road cost
that experiences greater variability is oil prices. Although there
is much debate about forecast oil prices, a further scenario that
could have been tested would have been oil prices rising substantially
in the long term.
Q 33: How would substantial long-term oil
price rises or falls have an impact on demand for rail? Would
this impact be greater than those in the tested fuel duty scenarios?
A1.10 The demand modelling has taken account
of the service offering of other modes, including road and aviation.
For aviation, forecast air fares have been extracted from the
DfT's SPASM model. These forecasts predict declining real air
fares, which is in line with the long-term historical trend.[319]
However, a sensitivity reported in the Economic Case is for growth
in air fares of 37% as a result of high oil prices and carbon
trading. This leads to an increased BCR excluding WEIs of 1.8.
This sensitivity seems to be a fundamentally different position
to the base case of declining air fares. However, the implication
is that the level of air fares is not a crucial determinant of
the case for high-speed rail.
Q 34: Are declining real air fares realistic
given the prospect of increased environmental taxation on aviation?
A1.11 The demand for air, road and rail are modelled
separately. However, there appears to be an asymmetry because
rail forecasts take account of aviation and car cost changes,
while car and air demand do not take account of changes in the
generalised cost of rail.
WEIs
Estimates of WEIs
from written submissions
A1.12 A number of submissions to the TSC's inquiry
provide alternative estimates of the WEIs that could result from
the High Speed Rail programme. These submissions provide a wide
range of estimated impacts to certain areas/cities and the whole
of the UK.
- The South Yorkshire Passenger
Transport Executive[320]
cites evidence predicting that high-speed rail will be worth more
than £70m per annum in productivity benefits to the eastern
city regions of the North East, Tees Valley, Leeds, Sheffield
and East Midlands. This is as a result of wider production and
labour markets and the attraction of inward investment. This analysis
also indicates that the Eastern Network would provide a further
contribution of £4.2 billion to the national economy in productivity,
imperfect competition and capacity release benefits.[321]
- A report by Greengauge 21, cited in the Core
Cities submission, looks at the WEIs associated with changes in
accessibility, productivity of businesses and employment patterns,
as well as agglomeration effects.[322]
It estimates that a national high-speed rail system could generate
£14 billion of wider economic benefits (out of total scheme
economic benefits of £125 billion) over 60 years. This report
also notes that these wider benefits are well distributed across
regions: 36% to the Midlands and North of England; 35% to the
wider South East, including London; and 26% to Scotland.
- Birmingham City Council cites an independent
economic study which suggests that there could be an increase
in economic output of between £600m and £1.5 billion
in the West Midlands region (the higher levels of benefit are
reliant on additions to regional rail services).
- Professor John Tomaney cites a study by KPMG
for Greengauge 21,[323]
which claims that HS2 would create a single market for services
and knowledge-based activities. In turn, this would cause an increase
in GVA of between £17 billion and £29 billion by 2040.
KPMG also predicts that HS2 will generate additional tax receipts
of between £6 billion and £10 billion due to increased
economic activity.
- The Greater Manchester Combined Authority predicts
that economic output could be increased by £967m per year
across the region covered by the Northern Way partnership.
Distributional
effects
Socio-economic
impacts
A1.13 The AoS evaluates the levels of deprivation[324]
and socio-demographic characteristics of each station catchment
area and key areas along the proposed route and the WCML. The
community integrity and accessibility assessment also takes account
of the number of properties in the 20% most deprived areas and
in areas with a high proportion of equality groups that would
be demolished. However, these pieces of analysis are not linked
to the resulting potential distributional impacts from HS2.
A1.14 In line with WebTAG guidance, the key sustainability
objectives in the AoS include economic prosperity and economic
welfare, but these objectives are concerned with supporting wider
economic growth, rather than the distributional impacts. Similarly,
and in accordance with the way in which these assessments are
usually undertaken, the equality impact screening assessment (EqIA)
looks at the effects of HS2 on 'priority equality groups' but
it does not directly address the impacts on different income groups.[325]
Geographic
A1.15 There is evidence that those cities where
the service sector (including tourism) counts for a large proportion
of the economy, are the most likely to benefit from access to
high-speed lines.[326]
London is thus very likely to benefit, possibly at the expense
of less service-oriented cities on the line. In fact, a large
proportion of the quantified benefits (34%) in the Economic Case
are to long-distance passengers from London, so the regeneration
effects (if they exist) would be large in London.
A1.16 The AoS does not assess many distributional
implications between regions along the route, although it states
that one of the aims of HS2 is to reduce disparities between London
and the rest of the UK. For this reason, it would be of interest
to assess all of the benefits of the scheme by route section.
While some benefits of the scheme are assessed in this way in
the AoS, many of the significant effectssuch as benefits
for commuters/consumers, agglomeration, maintaining/improving
access to public transportare assessed at the route level,
and therefore it is not clear if there are disparities in benefits/costs
between different parts of the route.
A1.17 A number of submissions to the HS2 consultation
and evidence from other schemes suggest mixed evidence about the
inter-regional effects of high-speed rail.
- The wider economic benefits
of Crossrail have been assessed by borough in London and the South
East. The agglomeration effects (as measured by change in output
per job) are greatest along the route. In other words, the boroughs
which experience the most significant change in accessibility
to jobs have the highest change in output per job. However, it
is of note that no regions are projected to lose out.
- The North West Chamber of Commerce predicts that
high-speed rail will help to close the north-south economic divide
by improving access to the North West, enhancing opportunities
for investment and economic development.
- Professor John Tomaney[327]
looks at whether high-speed rail will help rebalance regional
economies based on evidence from five countries where high-speed
rail has been introduced, and concludes that the impact of high-speed
rail on regional inequalities is fairly ambiguous.
- The Liverpool and North West Chambers of Commerce
believe that HS2 will maximise VfM and business confidence to
invest outside London and the South East.
- Warwickshire County Council does not consider
that the evidence that HS2 Ltd puts forward suggests a reduction
in the north-south divide, and considers that this should be assessed
in more detail.
Sensitivities
A1.18 Table A1.1 summarises the stated sensitivities
for the BCR. Table
A1.1 Impact of sensitivities on the BCR (without WEIs)
| Sensitivity
| Detail | HS2
|
| Base case (without WEIs)
| Demand capped in 2043, growth rate 1.4%
| 1.6 |
Demand growth |
Demand cap higher | Demand growth extended by five years
| 2.0 |
| Demand cap lower
| Demand capped at 2026 level
| 0.7 |
| Demand growth faster (I)
| Demand cap reached in 2033
| 1.9 |
| Demand growth faster (II)
| Demand cap reached in 2033 due to higher economic growth
| 2.0 |
| Demand growth slower (I)
| Demand cap reached in 2055, growth rate 1.1%
| 1.3 |
| Demand growth slower (II)
| Demand cap reached in 2055 due to lower economic growth
| Below 1.3 |
| Scottish demand capped
| Cap Scottish demand in 2021
| 1.3 |
Inter-modal impacts
| Growth of other modes lower
| Capping air and road growth at 2008 levels
| 1.4 |
| Cost of other modes lower
| 50% higher fuel duty and 37% higher air fares
| 2.7 |
Fares | High fare increases
| Rail fares increase at RPI+2%
| 0.9 |
Other benefits |
Station redesign | Including benefits of Euston redesign
| 1.7 |
Costs | Cost reduction
| 15% reduction in costs
| 2.0 |
| No cost differential
| Same cost estimates for captive and classic fleet
| 1.9 |
| Lower optimism bias
| Optimism bias at 10%, slower electricity costs and greater productivity gains
| 2.0 |
| Private sector contribution
| Private sector contribution of £2 billion
| 1.7 |
Opening year |
Later opening | Opening year in 2030
| 2.0 |
Source: HS2 Ltd (2011), 'Economic Case for HS2:
The Y Network and London-West Midlands', February.
A2 Further
detail: Is the standard approach to appraisal appropriate?
Approach to appraisal
A2.1 The DfT's approach to appraisal and prioritisation
of transport schemes was reformed in April 2011. Following the
reform the guidance recommends that the assessment of a transport
scheme comprises several distinct elementsthe Strategic
Case, Economic Case, Commercial Case, Financial Case, Management
Case. These different components of the overall business case
all play a role in informing the ultimate decision. This means
that the pure BCR of monetised benefits and costs is only one
of the factors that decision-makers must consider. The Consultation
document has been clear that the BCR of the High Speed Rail programme
is only one component of the Government's case for high-speed
rail.[328]
A2.2 The approach to appraisal is still supported
by the DfT's WebTAG, which gives guidance on the technicalities
of conducting appraisal. A few changes were made to this guidance
following the reform, including to the treatment of indirect tax
and the value of greenhouse gases.
A2.3 One part of appraisal is the Appraisal Summary
Table which should include all qualitative, quantitative and monetised
impacts. The monetised costs and benefits should be included in
the BCRas calculated in the Economic Case. In the published
documentation for high-speed rail the various components of the
appraisal are described separately, for instance the Economic
Case and the AoS. Each of these contains aspects of the Appraisal
Summary Table. For instance, the Economic Case contains the monetised
construction costs, the AoS contains an assessment of biodiversity
and both contain assessments of noise (Economic Case as a monetised
assessment, AoS as a qualitative assessment). The approach taken
by HS2 Ltd is in line with the current guidance, although notably
there are some factors that could be monetised (such as number
of jobs created or building developments), but which are not.
Small time savings
A2.4 Although most of the time savings on high-speed
rail would not be considered small, some of the time savings for
passengers from released capacity on conventional services or
road network may be considered small.
A2.5 There has been an ongoing debate in the
transport industry regarding the treatment of small time savings
in appraisal. The business case for transport schemes often includes
the valuation of very small time savings (minutes or seconds)
accruing to many transport users. The debate is between those
who claim that transport users place low or no value on very small
savings, compared with those who claim that all time savings should
be treated equally regardless of their size. This debate was discussed
in a 2010 article in Oxera's online publication, Agenda.[329]
A2.6 The current DfT guidance remains clear that
all time savings should be included and the HS2 business case
adopts this approach.
Discounting
A2.7 The costs and benefits of HS2 have been
assessed in present value terms. This means that costs and benefits
further in the future are weighted as less important than costs
or benefits today. This is known as discounting and is primarily
based on the principle known as time preferencethat goods
and services available now are preferable to those available later.
This applies to society as a whole as well as individuals.
A2.8 The standard appraisal approach to evaluating
costs and benefits over time has been followed in the assessment
of HS2. The scheme has been appraised over 60 years from opening,
with an initial discount rate of 3.5% falling to 3% after 30 years.
The full Y network has been appraised over 67 years (60 years
from commencement of the full Y and the initial seven years of
just HS2).
A2.9 Two potential challenges to the discounting
approach can be raised. These relate to the discount rate and
the appraisal time period. Oxera has tested in the published model
two variants to the default discounting approach.
Discount rate
A2.10 The HM Treasury Green Book values have
been used and there would need to be a more fundamental revision
of these recommendations that applied to appraisal of all schemes
if alternative values were to be considered appropriate.
A2.11 However, there may be scope for reconsidering
this value if the trend economic growth rate per capita over the
long term was deemed to have changed from the 2.1% that is used
in the current estimate. For example, if there was a structural
change to long-term growth (not just short-term cyclical variations)
as a result of the 2008 financial crisis.
Appraisal period
A2.12 HS2 has been appraised over 60 years and
the Y network over 67 years (60 from the opening of full Y, seven
from just HS2). This is in line with DfT recommendations. Note,
however, that the Green Book provides recommendations for discount
rates for longer time periodssee Table A2.1.
Table A2.1 The declining long-term discount rate
Period of years |
0-30 | 31-75
| 76-125 | 126-200
| 201-300 | 301+
|
Discount rate |
3.5% | 3.0%
| 2.5% | 2.0%
| 1.5% | 1.0%
|
Source: HM Treasury (2003), 'The Green Book'.
A2.13 Since HS2 is a long-life asset one potential
alteration to the standard approach to appraisal is to alter the
appraisal time frame.
A2.14 Oxera has tested in the published model
two variants to the default discounting approach.
A2.15 Table A2.2 below shows the impact on the
BCR of changes to the discounting approach. Changing either the
discount rate or the appraisal time frame will change the BCR.
However, there is no clear reason to deviate from the current
guidance.
Table A2.2 Impact of alternative discounting assumptions
| | HS2
| | | Y network
| |
Period of years |
Base | Appraisal period extended by ten years
| Discount rate of 3.0% then 2.5%
| Base | Appraisal period extended by ten years
| Discount rate of 3.0% then 2.5%
|
BCR (without WEIs)
| 1.6 | 1.8
| 2.0 | 2.2
| 2.4 | 3.2
|
BCR (with WEIs) |
2.0 | 2.3
| 2.4 | 2.6
| 2.8 | 3.8
|
Source: HM Treasury (2003), 'The Green Book'.
Are there lessons
from other major transport projects?
A2.16 The construction and operation of a high-speed
rail line in the UK would not be unprecedented. The UK already
has one high-speed line and there are many others across Europe
and the rest of the world. This section briefly analyses whether
there are lessons to be drawn for ex ante appraisal of HS2 or
the Y network from ex post evaluations of other high-speed rail
schemes and outcomes of other major transport projects.
High Speed 1
A2.17 High Speed 1 (HS1) is the railway between
St Pancras London and the Channel Tunnel. It allows high-speed
rail services to operate between London and the continent as well
as domestic high speed services from Kent to operate into London.
Work on HS1 began in 1998; the first section of the railway (between
the Channel Tunnel and Kent) opened in 2003 and section two (between
Kent and London) opened in 2007.
A2.18 A number of lessons can be drawn from the
ex post evaluations of HS1. First, there seems to have been some
level of optimism bias with respect to passenger forecasts. The
estimates of passenger revenues were revised downwards three times
between the start of the project in 1998 and 2004. These forecasts
each included low, medium and high scenarios, and in almost all
cases, the high scenarios in the revisions were quite similar
to the low cases from the previous forecasts. However, there were
a number of unforeseen circumstances that may have contributed
to lower-than-expected passenger traffic, including a reduction
in travel following the terrorist attacks in September 2001. The
overly optimistic passenger forecasts also hindered the plans
to raise private finance, since this was based on the prospect
of a certain level of forecast revenue. In turn, this led to increased
public support for the project and a restructuring of the deal
in 1998.[330]
A2.19 On the other hand, there may be some positive
lessons from the construction of HS1 and the ex ante cost forecasting
that was undertaken. Section one of the link was completed on
time and slightly below the target cost (as set out in the 1998
restructuring). The target cost of £1,930m was estimated
as the sum of point cost forecasts for all of the component works,
which were based on assumptions about various project risks. Due
to the uncertainty in some of these assumptions, a contingency
was also estimated at £180m. The actual cost outturn for
Section one was £1,920m. [331]
High-speed rail
in Europe
A2.20 This section reviews major high-speed rail
links around Europe and looks at the impacts of these schemes
on passenger demand, modal shift, and wider economic and regional
impacts. Overall, the success of high-speed rail seems to largely
depend on the precise route selected, and whether the high-speed
rail link alleviates congestion and connects the most highly populated
cities.
Mobility impacts
A2.21 The introduction of high-speed rail services
in France and Spain generated a significant number of trips, and
caused modal shift from road and rail. For example, there was
a 2.8 times increase in demand for rail on the Madrid-Seville
route from 1991 to 1997 and a 2.2 times increase for the Paris-Brussels
route from 1994 to 2005, after the respective high-speed rail
lines were introduced.[332]
However, there is evidence that the generation in travel is mostly
from outer areas into the city rather than the reverse; in other
words, the journey generation is asymmetric. For example, on the
Paris to Rhone-Alps route, flight and train journeys to Paris
increased by 144%, but journeys in the inverse direction only
experienced a 54% increase due to the high-speed rail connection.[333]
Wider economic
and regional impacts
A2.22 The introduction of the TGV in France was
accompanied by the implementation of policies to develop and improve
regional rail services to ensure that benefits were spread widely
and to increase accessibility. These policies seem to have succeeded
in bringing benefits to cities in some cases, such as Lyon and
Lille. However, there have been low levels of job creation and
attraction of few new businesses in cities with deprived economies
and where the stations are located outside urban areas; for example,
Montchanin. The regional impacts from the introduction of the
high-speed rail link in Spain are also ambiguous. While the AVE
is not reported to have attracted new firms to the catchment areas
of stations, existing firms have benefited from the new transport
infrastructure. Sizeable land value and population increases have
also been cited as a result of AVE construction.[334]
A2.23 Experience from Germany suggests that there
may be positive impacts in the catchment areas surrounding stations,
although in the case of Germany both freight and passengers are
transported on high-speed rail. For example, there was a 20% increase
in demand for office and retail space around the Kassel-Wilhelmshohe
station, which opened in 1992, and this has induced other new
developments in the surrounding area.[335]
Costs
A2.24 The construction of the German ICE line
experienced building delays and complications which caused higher-than-expected
construction cost overruns, operating deficits and increasing
debt burdens. The operational deficits are considered to be a
result of the small average size of German cities and the dispersion
of the population around the country. [336]
West Coast Main
Line
A2.25 The upgrade to the WCML was completed on
December 7th 2008.[337]
There are two main documents which reviewed the business case
for the project: the business case produced by the Strategic Rail
Authority (SRA);[338]
and the review of the upgrade by the National Audit Office (NAO).[339]
A2.26 The SRA business case estimated user benefits
but not the WEIs of the upgrade. However, without quantifying
the WEIs from the scheme, the BCR is estimated to be 2.4:1, thus
providing 'high value for money'. The business case suggests that
service improvements would lead to a 15-25% increase in the number
of passenger journeys, of which 60% would be from modal shift
from road to rail. In addition, it is expected that the scheme
will remove 5,000 lorries per day from the road. Figure A2.1 shows
the distribution of user benefits from the scheme.
Figure A2.1 Distribution
of user benefits
Source: Strategic Rail Authority (2003), 'West
Coast Main Line Strategy', June, p. 45.
A2.27 The figure above shows that over half of
the estimated benefits accrue to passengers, both existing and
new.
A2.28 The NAO review of the upgrade comments:
The business case for the continuation of the programme
hinged around the non-financial benefits, chiefly savings in passenger
journey times and benefits to road-users from freight being carried
by rail rather than road and from reduced road congestion[340]
Jubilee Line Extension
A2.29 The Jubilee Line Extension (JLE) was one
of London's biggest and most expensive engineering projects. Running
from Green Park to Westminster, Waterloo and Stratford, the project
also included the building of six completely new stations as well
as rebuilding or enlarging five other stations. There were also
five major developments associated with the JLE, including the
Greenwich Millennium Dome. The JLE was completed in December 1999
and has been operating since.
A2.30 There were two major ex ante studies of
the JLE, including the East London Rail Study and quantified risk
assessment modelling, as well as a number of studies completed
during construction and two ex post assessments.
A2.31 The ex post assessments indicate that there
were significant cost overruns from the JLE. In the year that
it was decided to go ahead with the project (1993), the costs
were predicted to be £2.1 billion (although there were already
a number of upward revisions before this time). However, due to
a number of factors, including the collapse of tunnels using the
same tunnelling method as the JLE, and the greater complexity
of construction in some areas than previously envisaged, the actual
costs of the project were £3.45 billion. The JLE was also
delivered 21 months later than initially planned, for the reasons
mentioned above and due to problematic electrical and mechanical
work.
A2.32 However, even with these large cost overruns
and delays, the JLE is considered to have delivered good VfM.
The JLE was initially approved with a BCR of 0.95 and an expectation
that there would be some additional unquantified benefits from
the regeneration of the South Bank and the creation of new jobs
in Canary Wharf. An ex post evaluation of the scheme estimated
that the JLE delivers a BCR of 1.75, even accounting for the cost
overruns. This may be a result of the large developments that
were created around stations. For example, there was extensive
housing and commercial development around Canada Water station
which may not have occurred on the same scale without the JLE.[341]
A2.33 An ex post environmental impact assessment
concluded that the JLE has had no adverse impact on ambient noise
levels at the nearest noise-sensitive properties along both the
underground and above-ground sections. Additionally, apart from
the initial impacts of above-ground works associated with construction,
the operation of the extended line has not had any noticeable
impact on urban ecology.[342]
A2.34 Overall, there are a number of lessons
that can be drawn from ex post assessments of other high-speed
rail and rail schemes. Planning and taking into account the environmental,
economic, and social factors seems to be integral to the success
of the scheme. As well, a consideration of the main uncertainties
or risks surrounding the costs and revenues can lead to more robust
estimates. At the same time, in almost all schemes considered,
unforeseen circumstances have arisen and contributed to higher
costs or lower revenues than expected, although some schemes have
still delivered good VfM.
268 http://www.parliament.uk/business/committees/committees-a-z/commons-select/transport-committee/news/hsr---new-inquiry/ Back
269
The High Speed Rail programme currently includes two main phases:
London-West Midlands, followed by an extended Y network. This
review uses the terminology 'HS2' to refer to the specific London-West
Midlands line proposed by the Government and 'Y network' to refer
to the full scheme of HS2 with extensions to Manchester and Leeds. Back
270
Oxera was awarded the commission following a competitive tender
process. Back
271
HS2 Ltd, 'Economic case for HS2. The Y Network and London - West
Midlands', February 2011. Back
272
Oxera's assessment focuses on the business case for HS2 and the
Y network, and has not assessed the relative merits of the specific
route choices. Back
273
HS2 Ltd (2011), 'Economic Case for HS2, The Y Network and London-West
Midlands', February. In the reference case, additional investment
in the road network beyond 2015 is included at a rate based on
the DfT's road traffic forecasts. Back
274
Atkins (2011), 'Strategic Alternatives to the Proposed "Y"
Network', February, prepared for the DfT. Back
275
The DfT recommends that projects with a BCR of between 2.0 and
2.5 constitute 'high' VfM and that those with a BCR between 1.5
and 2.0 are 'medium' VfM. See Department for Transport (2011),
'Value for Money Assessments', May. Back
276
Rail Value for Money Study (2011), 'Realising the Potential of
GB Rail', Summary Report, June, p. 48. Back
277
Agglomeration was £190m-£299m, imperfect competition
£238m-£412m, and labour market impacts were negligible.
See Atkins (2010), 'High Speed 2 Strategic Alternatives Study,
Strategic Outline Case', March. Back
278
The Transport Economic Efficiency Tables in the strategic alternatives
documentation show 'travel time savings' only. Back
279
The strategic alternatives have been assessed by Atkins on behalf
of the DfT using HS2 Ltd's model; hence, the appraisal includes
the same benefits as those for high-speed services, with the exception
of reliability impacts. Back
280
Department for Transport (2011), 'Economic Case for HS2: The Y
Network and London - West Midlands', February. Back
281
Department for Transport (2010), 'High Speed Rail', March. Back
282
HS2 (2011), 'High Speed Rail: Investing in Britain's Future',
Consultation, February. Back
283
HS2 Ltd (2011), 'Economic Case for HS2: The Y Network and London-West
Midlands', February. Back
284
HS2 Ltd (2011), 'Economic Case for HS2: The Y Network and London-West
Midlands', February, para 4.3.4. Back
285
The Mott MacDonald IWT Consortium (2008), 'The Productive Use
of Rail Travel Time and Value of Travel Time Saving for Travellers
in the Course of Work', by Fickling, R., Gunn, H., Kirby, H.,
Bradley, M. and Heywood, C., p. 9. See also Oxera (2007), 'How
to value in-work-time crowding', August 28th. Back
286
See, for example, Fowkes, A.S. (2001), 'Principles of valuing
business travel time savings', ITS Working Paper 562, December.
Back
287
HS2 Ltd (2011), 'Economic Case for HS2: The Y Network and London-West
Midlands', February. Back
288
Department for Transport (2011), 'Values of Time and Operating
Costs TAG Unit 3.5.6', April. Back
289
HS2 (2011), 'Valuing the Benefits of HS2 (London-West Midlands)',
April. Back
290
Department for Transport (2011), 'Review of decision making in
the Department for Transport', written statement of the Rt Hon
Phillip Hammond MP, April. Back
291
The suite of models includes models for long-distance, South,
Midlands, Heathrow and station choice. Back
292
HS2 Ltd (2011), 'A Summary of Changes to the HS2 Economic Case',
April. Back
293
Association of Train Operating Companies (2005), 'Passenger Demand
Forecasting Handbook v4.1'. Back
294
The elasticities on exogenous variables come from PDFH v4.1 and
fare elasticities from PDFH v4.0. The most recent version of PDFH
is v5. Back
295
HS2 Ltd (2011), 'A Summary of Changes to the HS2 Economic Case',
April. Back
296
HM Treasury (2010), 'Spending review 2010', October. Back
297
Department for Transport (2011), 'Hammond welcomes value for
money report that could bring efficiency savings to benefit passengers
and taxpayers', May. Back
298
In the 2010 documentation this is explained as a feature of the
model structure, see HS2 Ltd (2010), 'HS2 Demand Model Analysis',
February, para 3.5.3. Back
299
In the 2010 documentation, premium fares were tested in an alternative
model, however HS2 Ltd concluded that it was 'an issue that could
be investigated in more detail in the future'. See HS2 Ltd (2010),
'HS2 Demand Model Analysis', February, para 3.5.6. Back
300
This adjustment for optimism bias is based on cost escalation
of projects from inception to delivery, and hence ought to implicitly
cater for changes in design that may arise as a result of the
consultation and hybrid bill. Back
301
HS2 Ltd (2011), 'Economic Case for HS2: The Y Network and London-West
Midlands', February, Table 7. Back
302
HS2 Ltd (2011), 'A summary of changes to the HS2 economic case',
April, p. 18. Back
303
A bottom-up approach means that elements are estimated separately
and then aggregated. This compares to a top-down approach, where
a single estimate of the total WEIs would be calculated. Back
304
See, for example, Marques, L. (2009), 'Portugal's High Speed Future:
Developing a National and International Network', The Future of
European Rail Conference, March 17th. Back
305
Graham, D.J. and Melo, P. (2010), 'Advice on the Assessment of
Wider Economic Impacts: a report for HS2', March. Back
306
Ibid. Back
307
HS2 Ltd (2011), 'Valuing the benefits of HS2 (London-West Midlands',
April. Back
308
Department of Energy and Climate Change (2009), 'Carbon Valuation
in UK Policy Appraisal: A Revised Approach', July. Back
309
Department of Energy and Climate Change (2010), 'Updated short
term traded carbon values for UK public policy appraisal', June.
Back
310
Department of Energy and Climate Change (2009), 'Carbon Valuation
in UK Policy Appraisal: A Revised Approach', July. Back
311
HS2 Action Alliance (2011), 'Review of the February 2011 consultation
business case for HS2', May. Based on data taken from Rohr, C.,
Fox, J., Daly, A., Patruni, B., Patil, S., Tsang, F. (2010), 'Modelling
Long-Distance Travel in the UK', RAND Europe. Values of average
quintile household income are taken from Office of National Statistics,
'The effects of taxes and benefits on household income, 2005-06'. Back
312
For example, a report by Greengauge 21 noted that people who take
advantage of high-speed trains for daily commuting are primarily
those with higher incomes. Harman R. (2006), 'High Speed Trains
and the Development and Regeneration of Cities', Greengauge
21, July. Back
313
As calculated from the HS2 Central Case Spreadsheet. Back
314
HS2 Ltd (2010), 'Demand Model Analysis Appendix 3: High Speed
Rail and Spatial Patterns and Strategies in Cities and Regions',
February. Back
315
Department for Transport (2011), 'High Speed Rail: Investing in
Britain's Future', Consultation paper, p. 12. Back
316
Gutierrez Puebla, J. (2005), 'Spatial Effects of the High Speed
Train', Investigaciones Regionales. Back
317
The 'Other Impacts' reported in Table 4 of the Economic Case. Back
318
Department for Transport (2011), 'Freedom of Information Response
F0007480', April 8th. Back
319
Atkins (2010), 'HS2 Baseline Forecasting Report: A report for
HS2', February. Back
320
Submitted on behalf of the South Yorkshire Integrated Transport
Authority and the Sheffield City Region. Back
321
This data is taken from a forthcoming report of the Eastern Network
Partnership, providing evidence for the HSR eastern network, to
be published in July 2011. Back
322
Greengauge 21 (2009), 'Fast Forward: A High-Speed Rail Network
for Britain'. Back
323
Greengauge 21, (201), 'Consequences for Employment and Economic
Growth', February. Back
324
It considers the impact of the scheme on areas of high deprivation,
known as Lower Super Output Areas (LSOAs). Back
325
This considers gender, ethnicity, disability, age, faith and sexual
orientation. Back
326
Albalate, D. and Bel, G. (2010), 'High Speed Rail: Lessons for
Policy Makers from Experiences Abroad', University of Barcelona. Back
327
51M (2011), 'The Local and Regional Impacts of High Speed Rail
in the UK: A Review of Evidence'. Back
328
Department for Transport (2011), 'High Speed Rail: Investing in
Britain's Future', p. 14, February. Back
329
Riley, C. (2010), 'Do small savings in travel time matter?', Agenda,
November. Back
330
National Audit Office (2005), 'Progress on the Channel Tunnel
Rail Link', HC 77 Session 2005-2006, July 21st. Back
331
Ibid. Back
332
Brown, R. (2007), 'Transport Economists' Group Seminar', March
2nd. Back
333
Albalate, D. And Bel, G. (2010), 'High-speed rail: lessons for
policy makers from experiences abroad', Working paper 2010/03. Back
334
Ibid. Back
335
Haynes, K.E. (1997) 'Labour markets and regional transportation
improvements: the case of high-speed trains, an introduction and
review', The Annals of Regional Science, 31, 57-76. Back
336
Albalate, D. And Bel, G. (2010), 'High-speed rail: lessons for
policy makers from experiences abroad', Working paper 2010/03. Back
337
Network Rail (2008), 'West Coast Main Line: Built in the 19th
Century. Rebuilt for the 21st', press release, December 7th. Back
338
Strategic Rail Authority (2003), 'West Coast Main Line Strategy',
June. Back
339
National Audit Office (2006), 'The Modernisation of the West Coast
Main Line', November 22nd. Back
340
National Audit Office (2006), 'The Modernisation of the West Coast
Main Line', November 22nd, p. 22. Back
341
Omega Centre at UCL 'Jubilee Line Extension (JLE)', Project Profile.
Back
342
Scott Wilson for Transport for London (2002), 'JLE - Post Project
Appraisal Environmental Indicator Report', December. Back
|