Further written evidence from the Department
for Transport (HSR 167B)
Letter from the Secretary of State for Transport
HIGH SPEED
RAIL INQUIRY
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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