High Speed Rail - Transport Committee Contents

Further written evidence from the Department for Transport (HSR 167B)

Letter from the Secretary of State for Transport


Following the Transport Committee's session on 13 September, I am writing with further information on three matters raised in my evidence.

Decision making

I discussed my Department's approach to developing and testing the business case for HS2. As you know, business cases produced by my Department are developed in line with Treasury advice on evidence-based decision making (set out in the Green Book), using its best practice five case model approach. This approach shows whether schemes:

—  are supported by a robust case for change that fits with wider public policy objectives—the "strategic case";

—  demonstrate value for money—the "economic case";

—  are commercially viable—the "commercial case";

—  are financially affordable—the "financial case"; and

—  are achievable—the "management case'.

I would like to clarify that the environmental case for a project is discussed within the strategic and the economic cases for a project.

Modal shift forecasts

In my evidence to you I raised HS2 Ltd's forecasts of the modal shift from air and road to high speed rail that would be facilitated by a high speed rail link from London to the West Midlands. HS2 Ltd predicts that the percentage of passengers using HS2 in 2043 who would otherwise have travelled by air is 6%, whilst the percentage who would have otherwise travelled by car is 7%. The construction of the second phase of HS2—to Leeds and Manchester—would further reduce journey times and provide new opportunities for modal shift.

External challenge

The Committee asked me whether my Department's work on HS2 is subject to scrutiny from external challenge groups. In addition to the external challenge panels run by HS2 Ltd, which include a range of experts from outside of Government, I gave a description of some relevant organisations and their activities. I attach a fuller description of the variety of sources of challenge and scrutiny of HS2, at Annex A.

If there is any further information that would be of use to the Committee in forming their recommendations on HS2, please do not hesitate to contact either me or my officials. I look forward to receiving the conclusions of the Committee's inquiry into high speed rail.

16 September 2011

Annex A

This annex sets out a number of processes by which the Department's work on the HS2 project has been, and continues to be, formally scrutinised, in preparation for my decisions on high speed rail at the end of the year.

The Major Projects Authority (MPA) conducted a Project Assessment Review (PAR) for HS2 in June 2011, the recommendations of which are being implemented by my Department and HS2 Ltd. The MPA will conduct a comprehensive PAR of the HS2 project at the end of October, after which its report will be referred to the Major Projects Review Group (MPRG) for consideration in mid November. My Department expects to receive an immediate assessment from the MPRG on the feasibility of the project. For information, the MPA is part of Cabinet Office and aims to significantly improve the delivery success rate of major projects across central government. Further information on their remit and powers can be found here http://www.cabinetoffice.gov.uk/content/major-projects-authority.

My Department's work on HS2 is subject to scrutiny from Infrastructure UK (IUK), in particular with regard to any future governance structures. For information, IUK is part of HM Treasury (HMT) and in addition to providing a stronger focus on the UK's long term infrastructure priorities, it aims to improve delivery of UK infrastructure through achieving greater value for money. Further information can be found here http://www.hm-treasury.gov.uk/ppp_infrastructureuk.htm.

The economic and financial cases of the HS2 project are the focus of robust interrogation by HMT. Depending on the outcome of my decision on high speed rail, HMT Ministers will wish to satisfy themselves as to the quality of the economic and financial cases of the project, both at the decision stage and as the project moves forward. The Ministers and officials of a number of other government departments provide input to my Department's work on policy areas relevant to them. These include the Department for Environment, Food and Rural Affairs (Defra), the Department for Communities and Local Government (CLG) and the Department for Business, Innovation and Skills (BIS).

In addition to the organisations detailed above, my Department has a comprehensive process of internal assurance, ultimately led by myself and my Permanent Secretary as the Accounting Officer. This includes the Board Investment and Commercial Sub-Committee, which reports to the Departmental Board and is a forum for making informed decisions on major investment projects within an economic, financial and commercial context at regular stages of the project.

It should not be forgotten that the public continue to serve as the most significant source of scrutiny of HS2. The recent public consultation, which lasted five months and attracted over 50,000 responses, invited interrogation of an extensive suite of documentation on the project and the opportunity to submit opinions and further evidence to the decision making process. Individuals, businesses, academics, rail industry groups and local authorities, amongst many others, have all contributed to the consultation. All relevant information was made public for this exercise and officials actively encouraged public engagement with the project through a series of road shows along the proposed route, seminars in major cities across the UK and leafleting exercises in train stations.

Additionally, my officials have engaged actively with critics of HS2 before, during and after the consultation period. Communications from individuals and action groups have provided challenge to the evidence provided by my Department, which officials have considered and responded to. All of the evidence arising from these communications and the formal consultation process will inform my decision-making process.

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Prepared 8 November 2011