THE DEPARTMENT FOR TRANSPORT is dismissing claims that the cost/benefit ratio of building High Speed Two has fallen to the point where the scheme could now be labelled 'poor value for money'.
The Financial Times has reported that an error in financial modelling resulted in a miscalculation of the direct cost/benefit ratio, or BCR, which has now been corrected to give a new figure of £1.20 for every £1 invested.
It is not the first time that the BCR of HS2 has been recast. When the first stage of HS2 between London and Birmingham was given government approval last year, the ratio was said to be £1.60/£1.00. Earlier this year, that figure was adjusted to £1.40/£1.00.
It is now said that the Government has 'admitted a modelling error', although no details of the source have been published.
But even if the new figure is correct, the Department for Transport is dismissing it as beside the point. A spokesman said: "We have always been clear that the [BCR] can only form one part of the decision-making process for a project of this scale, as its benefits reach well beyond narrow transport economics.”
The chief executive of Centro, the West Midlands PTE, has already calculated that his region alone is set to gain tens of thousands of jobs from HS2.
Geoff Inskip is due to give evidence to the All Party Parliamentary Group for High Speed Rail next Wednesday (18 April), when he will say that HS2 would bring 22,000 jobs and generate £1.5 billion for the West Midlands economy, 'while freeing up desperately needed capacity on the existing network'.