High Speed 2

If McLeod Governance could have one job in perpetuity it would be the person that names projects.

The person that gives the offbeat, strange – and yes ridiculous – nomenclature to mankind’s corporate adventures.

On a recent business trip in the United Kingdom, one such name caught our attention.

High Speed 2.

Not High Speed 1.

Not High Speed.

But High Speed 2.  We immediately started looking for its predecessor and were disappointed to find that High Speed 1 has a much more well known name – it is the Channel Tunnel Rail Link.

Our disappointment, though, is not the focus of today’s Report of the Week – rather it is the United Kingdom Audit Office review of High Speed 2 that entertains our thoughts.

Firstly what exactly is High Speed 2.

In January 2009, the then Labour Government established High Speed Two Limited to examine the case for a new British high-speed line and present a potential route between London and the West Midlands with thoughts of one day the line being extended to Scotland.

In January 2012, the now Conservative Government announced the go-ahead for HS2 (as it is known).

It would be built in two stages – phase one would be a 225km route from London to the West Midlands which would be constructed by 2026.  Phase two would be from Birmingham to Leeds and Manchester and would be constructed by 2033.

The National Audit Office reviewed H2 – in its words –

As an early look at the Department of Transport’s progress in putting in place the foundations for successful programme delivery.

And that is what makes this report so interesting.

This is a project that has – all being well – another twenty years to run.

It is fair to assume that the National Audit Office will review this project many, many times in the ensuing years.

So what did they find the first time they reviewed:

  • The  strategic reasons for developing High Speed 2 are not presented well in the business case.
  • The benefit–cost ratio calculated for phase one has twice contained errors and the Department has been slow to carry out its own assurance of the underlying analysis.
  • The Department’s published timetable for introducing the hybrid bill for phase one to Parliament is October 2013 and this was considered overambitious.
  • The Department’s management and oversight of the programme needs further improvement in the areas of clarity of objectives, strong project and programme management, senior management oversight, effective stakeholder engagement, and assurance.

The report summarised:

High Speed 2 is at a very early stage of planning and development and, as such, we cannot conclude on whether the programme is likely to deliver value for money.

The cost and benefit estimates in its economic case are uncertain and will change because the programme is at an early stage.

Furthermore, there have been past errors in the underlying model and some key data needs to be updated.

In presenting its case for investment, the Department has poorly articulated the strategic need for a transformation in rail capacity and how High Speed 2 will help rebalance economic growth.

The Department and HS2 Limited have started a lot of work recently to strengthen the evidence and analysis on which the case is based.

The challenging programme timetable, however, makes delivering this work difficult and increases the risks that the programme will have a weak foundation for securing and demonstrating success in the future.

Now before we join the inevitable chorus of doomsdayers stop for one moment and consider the timing of this report in the lifecycle of this project.

Isnt it much better that a report of this nature was written one year (5%) into the project than instead as a post implementation review?

If the Department and HS2 continue to fail to live up to acceptable project governance standards then, yes, that is a serious issue.

For now – they have the roadmap.

All they have to do is follow it.


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