Transparency data

High Speed 2 (HS2) Crewe to Manchester: accounting officer assessment (April 2022)

Updated 27 November 2023

Background

An accounting officer assessment was prepared in May 2022 in support of the decision whether to remove the Golborne Link from the High Speed Rail (Crewe to Manchester) Bill after second reading when parliamentary time allows.

Overview

The High Speed Rail (Crewe to Manchester) Bill was deposited in Parliament on 24 January 2022 accompanied by the publication of an update on the strategic outline business case (originally produced in 2017).

Besides linking Manchester to the HS2 network, the scheme included a High Speed link from Hoo Green junction to the West Coast Mainline (WCML) at Bamfurlong near Golborne, referred to as the Golborne Link.

The Golborne Link provided some relief to network capacity constraints on the section of the WCML between Crewe and Wigan, supported by other network upgrades and facilitated an increase in the number of HS2 train services between England and Scotland compared to HS2 Phase 2a.

The Integrated Rail Plan stated that there is a strong case for a connection to the WCML north of Crewe, and that in the consideration of possible alternatives to the current Golborne Link in the Union Connectivity Review, the government will be interested to understand affordable options that maintain, or improve, overall value for money.

The independent Union Connectivity Review noted that the Golborne Link does not resolve all of the identified network capacity constraints on the WCML and recommended that the government consider alternative northerly connections from HS2 lines to the WCML.

The government has subsequently taken the decision to ask Parliament to remove the Golborne Link from the High Speed Rail (Crewe to Manchester) Bill at second reading while it takes the time to consider the most effective way to find the right balance between providing the benefits, improving journey times, controlling costs and understanding the deliverability of alternatives.

This avoids introducing additional impacts to the passage of the bill, which could delay the project and the realisation of benefits to Manchester and the North West.

Impact on business case for the Crewe to Manchester section of HS2

The value for money (VfM) of the standalone Crewe to Manchester scheme would fall from ‘low’ to ‘poor/low’ with the removal of the Golborne Link. The Department for Transport (DfT) value for money framework explains that a ‘poor’ categorisation is defined as a benefit-cost ratio (BCR) – an economic ratio used to inform the overall value for money of a project – between 0 and 1 and a ‘low’ categorisation is defined as a BCR between 1 and 1.5.

The overall strategic case for the Crewe to Manchester scheme without the Golborne Link largely holds to that set out in the January 2022 update on the strategic outline business case (SOBC). The core of the case focuses on levelling up, place-based impacts, particularly around Manchester.

The strategic case will show the reduced impact the scheme will have on building connectivity across the Union. The removal of the Golborne Link will reduce the number of planned high speed rail services between England and Scotland offered by HS2 from 3 per hour to 1.

The government is committed to exploring options for alternatives that deliver similar benefits to the Golborne Link as part of the wider commitment in the Integrated Rail Plan. However, consideration of such alternatives is at an early stage. Wider options to improve services to Scotland such as upgrades to the East Coast Mainline (ECML) also exist.

A supplement to the update on the SOBC, setting out the impacts on the business case, shows the enabling capacity that the Crewe to Manchester scheme continues to offer other schemes to support Northern Powerhouse Rail (NPR) and any future link to Scotland.

Regularity

Affordability

Removing the Golborne Link from the hybrid bill reduces the overall cost range of the scheme from £15 billion-£22 billion to about £13 billion-£19 billion.

The government is committed to exploring alternatives that provide similar benefits to the Golborne Link within the £96 billion envelope of the Integrated Rail Plan. Analysis suggests that there are credible alternatives to the Golborne Link that range from providing more benefits at a higher cost to those that provide fewer benefits at a lower cost.

However, the range of options that could be provided within the cost estimate range is at an early state of design maturity. At this stage, we cannot be confident of the costs or benefits of any of these alternatives. If, having considered the alternatives in detail, it were to be concluded that the Golborne Link was the optimal option, this could be reinstated, albeit at an additional cost compared to the current position via a separate consenting process.

Overall, the affordability requirement of the Crewe to Manchester scheme without the Golborne Link is met.

Legal

Legal advice is that there is no obstacle to removing the Golborne Link post-bill deposit. The Golborne Link forms part of the long title of the bill, so its removal needs to be actioned at the point in which the principle of the bill is agreed, which is at the bill’s second reading. The process requires a vote on a motion in the House of Commons, to remove the powers to construct the Golborne Link from the High Speed Rail (Crewe to Manchester) Bill.

As part of the principle of the bill, if the Golborne Link were to be kept in the bill scheme, the flexibility to decide not to build it would essentially be lost.

Feasibility

The removal of the Golborne Link has no impact on the deliverability of the Crewe to Manchester scheme.

Consideration of the alternatives is immature. However, experience gained through the delivery of previous phases of HS2 suggests that it is less problematic to build smaller sections of new railway, breaking larger projects into more manageable parts.

The criteria for feasibility of the existing scheme without the Golborne Link is met.

Value for money

The scheme’s value for money assessment uses the transport analysis guidance (TAG) value for money (VfM) framework for assessing the social benefits and costs of investing in HS2.

The BCR range for the scheme is between 0.5 and 1.2, with a reference case BCR of 0.7 over a 60-year appraisal period and based on DfT’s common analytical scenario. Using a 100-year appraisal period, the reference case BCR is 0.9. The VfM of the Crewe to Manchester scheme without the Golborne Link will therefore fall within the ‘poor’ to ‘low’ DfT VfM categories.

HS2 Crewe to Manchester is expected to deliver benefits that are not captured in the BCR, such as dynamic wider economic impacts from improving connectivity between major economic centres, environmental and non-monetised impacts.

The proposed scheme is a key element of the wider Integrated Rail Plan and includes facilitating infrastructure for both a link to be built to enable additional future services to Scotland and to support NPR. However, these benefits are not captured as part of the benefits of this scheme.

The overall HS2 network, combining phases One, 2a and 2b Western Leg without the Golborne Link is still expected to deliver a BCR above 1.

Propriety

The HS2 Crewe to Manchester scheme is in line with the standards set out in managing public money guidance. The consideration of propriety set out in the previous accounting officer assessment on Phase 2b Western Leg continues to be largely valid. It does not breach any parliamentary control procedures or expectations.

While the removal of the Golborne Link reduces benefits to communities north of Manchester, the proposal is to remove the Golborne Link from this bill in order that alternatives that provide similar benefits to it may be considered without delay to the High Speed (Crewe to Manchester) Bill. Any future alternative would be taken forward through a separate consenting process.

The powers for off-route and on-network works will be retained in the bill to act as enablers for future services.

Conclusion

On the basis set out in the accounting officer assessment, I note that:

The decision to retain or remove the Golborne Link should take a range of factors into account including funding, impact on the business case and delivery of the government’s wider strategic aims for the scheme.

Removing the Golborne Link reduces both the costs and the benefits of the Crewe to Manchester scheme. The reference case BCR is 0.7 to 0.9, depending on whether a 60 or 100 year appraisal period is used. However not all benefits of the scheme are captured within the BCR.

The VfM for the HS2 network, with or without the Golborne Link, is still expected to deliver a BCR above 1.

The wider strategic case for the both Crewe to Manchester and the wider network, which is built upon increased connectivity in the North, remains largely intact if the Golborne Link is removed.

The government has decided it wishes to consider affordable alternatives to the Golborne Link that maintain or improve overall VfM. Removing the Golborne Link at this stage means it is no longer part of the principle of the bill. This allows this work to continue while retaining optionality (as retaining the Golborne Link in the bill would, in effect, create a commitment to build it).

Work is at an early stage on alternatives and the costs and benefits of such options are currently uncertain. It would be possible to reintroduce the Golborne Link by a separate process if no viable alternative is identified, though this would incur additional costs.

There are no reasons of propriety or legality why the government should not take the decision to remove the Golborne Link from the bill.

On this basis and the assumption that further work on alternatives will be based on options that present equal or better value for money as other outcomes, I conclude that removing the Golborne Link from the current HS2 Crewe to Manchester Bill and continuing with investment in the Crewe to Manchester scheme, should Parliament agree, is consistent with official guidance on managing public money.