They haven’t been twiddling their thumbs, part 2

(… continued from They haven’t been twiddling their thumbs, part 1, posted on 6 Dec 2013).

The filmed report by the Newsnight political correspondent David Grossman that was broadcast on 29th October 2013 continued with a “talking head” insert of Christian May, Head of Media Relations at the Institute of Directors, who said:

“At the very least, when the evidence changes the policy doesn’t appear to reflect that. So whether it’s in the sort of economic advantages that the Government predicts for the regions, which our members are sceptical of, or whether it’s in the detail about who works on trains and who doesn’t, or whether it’s a question of capacity alterations, I think that there’s an element of dogma to the Government’s approach, and I think that the debate should still be had.”

“An element of dogma” is a very dispassionate way of putting it. What we have seen is a Government that is determined to maintain a positive economic case for HS2 in the face of some very persuasive, and influential, criticism of its underlying methodology. It appears that, whenever a breach in the Government’s case is discovered, it compensates by constructing some new pretence. That it thinks that it can bluster through in this way is in no little part due to the difficulty of peering forward into the future that David Grossman commented on in his report. The fictional values of BCR that have been achieved by the machinations employed for the document The Strategic Case for HS2 allow the likes of Patrick McLoughlin and Sir Richard Leese to proclaim the robustness of the HS2 business case, in the absence of convincing evidence.

Whilst David Grossman seems to have hit the nail fairly and squarely on the head, in a report lasting less than six minutes he did not have much scope to elaborate on his findings. In normal times I would have addressed this void by working through the pages of The Strategic Case for HS2 myself, and reporting my findings. However, these are not normal times and I am finding it difficult to square my own particular circle, so I am going to have to rely on the work of others. Luckily a source that I trust in such matters, the HS2 Action Alliance (HS2AA), has carried out its own analysis, and has issued a press release in which it accuses the Government of resorting to “voodoo economics and fantasising”.

The HS2AA press release agrees with David Grossman that transport user benefits have shot up dramatically in the latest “strategic case”, but the figures that HS2AA has presented cover all transport user benefits, not just business traveller time savings, and concentrate on the period since February 2012 rather than February 2011; so it is not possible to tally the Grossman statistics with the HS2AA set. The HS2AA comparison does however support the general case made by David Grossman. In February 2012 the total transport user benefits were estimated at £44.1bn, of which £24.5bn (55%) was claimed to be due to time savings. Now the total transport user benefits claimed have risen to £57.7bn, an increase of 31%. However, the sum in this total attributed to time savings has risen to £45bn – almost double the February 2012 estimate – which has swollen to 79% of the total transport user benefits.

These numbers give the lie to the Government’s claims that it is not HS2’s speed that matters, but the increased capacity that it will bring to north-south rail connections. Clearly every minute that can be shaved off the journey times will be reflected in the bottom line BCRs for HS2. The need to maximise the business case drove the designers of HS2 to seek to minimise journey times, resulting in the environment-wrecking route that we have been presented with, rather than one that utilised an existed blighted transport corridor but added a few precious minutes to the journey time.

The HS2AA has been able to delve a little deeper into the methodology that the Government has employed to avoid the BCR sinking out of site than David Grossman had time for in his short film. It appears, for example, that – as Danny Alexander MP had trailed in the summer, and I reported in my blog Meanwhile, in another committee room, part 2 (posted 20 Aug 2013) – the Department for Transport (DfT) has revised its WebTAG evaluation methodology to employ “willingness to pay”, rather than salary plus employment costs, to derive the per-hour value of time for business travellers. Interestingly, the DfT has seized on this new methodology, although the WebTAG guidance document was only published in draft at the same time as the new strategic case for HS2 (see footnote). This unseemly haste to use the new rules is in breach of the DfT’s own procedures, and is in marked contrast to the way that the DfT was extremely reluctant to employ version 5.0 of the Passenger Demand Forecasting Handbook.

HS2AA characterises the new WebTAG guidance as trying “to sidestep that it matters that people now work on trains”. However, HS2AA’s verdict is that it fails to do this “because a business would not be willing to pay the same amount for a given time reduction for a journey spent working, as one where the time is wasted”. HS2AA’s summary of the new approach is:

“Unbelievably the absurd assumption that business people don’t work on trains remains.”

If all this wasn’t enough, HS2AA also records that the cost of crowding has been valued at five times the rate that was used previously.

It will be interesting to see whether all of these shenanigans, which HS2AA characterise as a “rabbit out of a hat approach”, are sufficient to satisfy the National Audit Office, the Public Accounts Committee and the Treasury Committee. Hopefully, we can look forward to some fireworks when these bodies have had time to digest what HS2AA refer to as “a last ditch attempt” to make the case for HS2.

Footnote: The new guidance is in the document Values of Time and Vehicle Operating Costs, TAG Unit 3.5.6, Department for Transport, Transport Analysis Guidance, October 2013 (draft).

PS: David Grossman’s report begins at 3min 30secs into the video.

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One response to this post.

  1. Posted by chriseaglen on December 12, 2013 at 7:32 am

    very niave to generalise what is done on a train. A plug helps and 10 minutes of extra time in a mobile coverage section can help. Time for a discussion may benefit from 10 more minutes. Extra time to watch a film or music add to enjoyment. Yes the analysis is very partial and not representing the publics behaviour but of the possible 5 percent to business travellers during the day. Poor reliance of analysis on the wrong segmentation of people travelling.

    Reply

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