Like this will work, right?

HS2 says the changes to its agreements with its “main civil construction contractors”, which remove financial incentives for firms to stay within budget, will save an estimated £1 billlion and were related to the collapse of Carillion, the construction giant, in 2018.

They surfaced in a 62-page report by the National Audit Office (NAO).

But Mr Morris said that HS2’s “short term savings” appeared to come at the “potentially substantially higher risk of increasing their liability for future cost increases – which would ultimately be borne by the taxpayer.

“This artificially lowers the cost now but inevitably the final price will be a lot higher.”

Joe Rukin, campaign manager of the Stop HS2 lobby group, claimed that the move was evidence that HS2 Ltd were “conning politicians into making sure that their gravy train keeps running”.

The NAO report, published last week, states: “At the time of publishing this report, HS2 Ltd was finalising revised commercial terms with its main civil construction contractors … HS2 Ltd estimates that these revised terms will achieve £1 billion of savings, through contractors reducing their pricings in response to the reduced risks that they will bear.”

It adds: “Revising the commercial arrangements was a reasonable response to HS2 Ltd’s analysis on the reasons for cost increases.

“However, like all contractual arrangements, these revised terms carry risks to value for money, which the Department and HS2 Ltd must manage.”

Contractors “were previously incentivised to control costs” because they were liable for 60 per cent of any forecast cost increases above a target price”, but “there is no longer a fixed target price for the contracts.

“HS2 Ltd has collaboratively developed an estimated cost for the works with its contractors and will be responsible for funding increases above the estimated cost.”

No fixed cost agreement is going to limit costs is it?

Just cancel the damn thing. By the time we’ve got to this sort of nonsense claim we’re well into something that can never, never, work.

10 comments on “Like this will work, right?

  1. As a political project it’s become a loser, even in Northern seats. As a transport solution it is failing. Old Oak Common?
    Previously they could shrug and think it will be someone else’s headache in five years. Now it looks like being the same people’s headache for ten years.
    Rescue what sunk costs we can (mostly land purchases) and sink the hulk.

  2. The area around Euston Station is a complete mess. A neighbourhood has been bulldozed, hotels and pubs pulled down. What a shambles!

  3. Dear Mr Worstall

    Those reports are music to government ears. It’s their job to squander taxpayers’ money, and the more blatantly, the better, showing who is in charge and who are the livestock, to be milked, shorn, fleeced and possibly slaughtered at the whim of whoever has their hands on the levers of power.

    What’s the point of power if you can’t abuse it?

    DP

  4. Bit of a problem for Boris. He’s declared himself a fan of infrastructure projects so it going to look odd if his first two major decisions are cancelling HS2 and the 3rd runway at Heathrow.

    I suppose cancelling them both will hold him in good stead with Greenies over Heathrow and his old base with HS2, but he’ll need to get cracking in the North otherwise the construction industry will be in trouble and he needs some results up there so that in 4 years when he calls the next GE he can run around in a yellow hard hart and hi-viz vest pretending to be George Osborne.

  5. BiND,
    The case for Heathrow is pretty thin. The total cost is tionestimated at some £17bn (last time I checked, could be higher now); they hope to recoup it via higher landing fees. But if Gatwick were given the go-ahead for a second runway too – a snip at just £6bn – then I suspect Heathrow would have trouble filling those slots.

  6. @DP

    Gov’t squander taxpayers’ money, and the more blatantly, the better, showing who is in charge and who are the livestock, to be milked, shorn, fleeced and possibly slaughtered at the whim of whoever has their hands on the levers of power.

    We’ve a shortage of Doctors / GPs – Gov’t response

    Dr Martin Scurr: I am dumbfounded that taxpayers’ money…

    …in a NHS critically short of resources is being squandered on a new bureaucracy to encourage employees to work part-time.

    Certainly, there is a severe shortage of both clinical and non‑clinical healthcare professionals, with 100,000 vacancies across the hospital and GP sectors. Yes, we need to retain staff, but I’m not convinced that more working part-time is the right approach.

    All within medicine accept the need for flexible working arrangements for some of our colleagues — for instance, parents — but it must not become a central theme, for, if it does, the care of patients will suffer from even less continuity of care than there is already.

    Where does it end? If we start from the basis of offering part-time positions to, say, junior doctors, I’d fear we are misleading the new recruits about the level of commitment needed for the job, starving the NHS of the hours it needs — and, of course, leaving patients without the care they require. We need the best of the best in medicine: that means recruiting and retaining those with drive, energy and enthusiasm.

    Given that we may never have the resources needed for our healthcare system to catch up with the standards set in other countries, should we really waste any on extra bureaucracy to promote part-time working?

    Chinless wonder Mr Hancock living up to his name

  7. @BiND

    It is Not Gov’t’s job to pay our money to prevent the construction industry, or any other, being in trouble

    @Andrew M

    Ahem, Heathrow and Gatwick runways are private sector – not state sector – taxpayer money not being squandered

    Let them and other airports crack on with infrastructure if they want to.

    If HS2 was viable private consortiums would be clamouring to build it; that they’re not says all one needs to know

    Gov’t has now confirmed EU Mandated HS2 is not viable: £0.60 benefit for every £1.00 spent

    End HS2 asap, every day adds £millions to sunk costs

    Even Train Loving Hitchens says bin it

    Hitchens point is UK (like Holland) is too geographically small to need [EU Mandated] HSR, same as USA is too large.

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