Business case for HS2 starts to crack
The government's latest business case for the High Speed 2 (HS2) rail link has lowered the amount of benefit it predicts relative to the spiralling cost of the project.
Despite recent criticism from MPs and the Institute of Directors, the beleaguered project has relied on cross-party support and an economic impact assessment from KPMG to justify the bumper price tag.
In recent years the political debate has moved on from ‘not in my back yard’ concerns to a 'battle of the financial models' and the strategic case for high speed rail in the UK.
However according to the new DfT report, the expected benefit cost ratio (BRC) has dropped from £2.50 to £2.30 in economic benefits for every pound spent. This is mainly due to a £10bn increase in the cost of the £42.6bn project which was revealed earlier this year.
After it was widely ridiculed the government...