Derailed: The Story of HS2: 2. Mutually assured exaggeration

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Welcome to Understand from BBC Radio 4.

You're about to listen to Derailed, the story of HS2.

If you're in the UK, you can listen to the full series right now first on BBC Sounds.

Thomas was great, but actually, I was a big Ivor the Engine fan.

You might not remember the story of Jones the Steam and his green locomotive, but Gareth Dennis does.

I like the community vibe.

Thomas the tank engine's train railways always seem to inflict themselves on the environment around them, whereas Ivor was a bit more

in keeping.

Plus, he's got a tiny dragon.

Well, yeah, exactly.

Ah, well, right then.

We better do some work I suppose.

Gareth is a railway engineer.

Perhaps it's not surprising he takes deeper community lessons from Ivor the Engine than I do.

But he's also a blogger and author and talking to him is a reminder that the stories we tell about railways, what they're for and how they work for our communities, matter.

Because engineering is all about storytelling and that's a skill that has been lost a little bit.

When the grand vision for a new high-speed railway was unveiled in 2010, story was the next problem they were faced with.

Building a line between London, Manchester, and Leeds would be expensive and time-consuming, running across multiple parliaments, multiple budgets.

It would be disruptive, too.

Clearing a path means woodland would have to be torn up, landowners forced off property they've owned maybe for generations.

To have any chance of their vision surviving, engineers would need politicians and the public to buy in to why it needed to exist.

Yet Gareth watched as opposition to the idea grew and grew.

There are a lot of people saying, Well, we don't need to do this, and this isn't a problem on the railways.

And as someone working on the railways, I knew that wasn't true.

This is the story of a railway which divided Britain.

An ambitious idea brought down by political reality and what it tells us about why we struggle to build a better future.

I'm Kate Lambell from BBC Radio 4.

This is Derailed, the story of HS2.

Episode 2, Mutually Assured Exaggeration.

There are many stories told about HS2, but the two that really matter are the ones the government told itself.

The strategic and business cases which set out the reason to spend billions of pounds.

These are meant to help politicians make up their minds what journalists pour over when holding them to account.

And the strategic case is pretty simple.

It involves laying out the big ideas.

Just listen to Philip Hammond in 2010, announcing that the new coalition government would continue consulting on Labour's plans for high-speed rail, confirming the preferred route would reach Manchester Manchester and Leeds.

The government believes that the construction of a high-speed rail network will support economic growth and the rebalancing of the UK economy.

Justine Greening, who was made Transport Secretary the following year, suggests HS2 matched the mood music of the new administration.

She told me it appealed both to a desire to improve infrastructure and a political element of building northern support.

HS2's written strategic case focused on the very problems engineers were wrestling with in our last episode, that Britain's railways were overcrowded and antiquated.

Local leaders were also won over by promises of regeneration.

The business case was more difficult, because this had to speak directly to the Treasury.

And when I interviewed politicians who supported the idea for a new high-speed line, they tend to talk about the Treasury in a kind of half-whisper, as though a cloaked figure is listening in the alleyway nearby, ready to foil their plans.

Because the Treasury don't like spending money on the basis of fuzzy good feelings.

They ration spending according to hard data and brass tacks.

Their guide on how to do this, called the Green Book, describes how to set out all the costs for your big idea, the taxpayer money required, as well as all the imagined benefits, to produce one big number.

The benefit-cost ratio, or BCR.

If we can collapse something down to a number as human beings, then we like to do so because it's a mental shortcut.

Andrew Meany is a numbers man.

He works for a consultancy called Auxera, and in 2011, he was asked by the Transport Select Committee to analyse the business case for HS2.

So he's going to help us understand it as well.

Putting precise figures on the benefits of a massive railway isn't always straightforward.

You've got to make a lot of assumptions.

So the way these benefits are calculated, a lot of it comes from bypass schemes.

A driver of a car, they can't do anything with their time.

You know, if they're a plumber, they're between jobs.

If they're a briefcase traveller, certainly at the time you weren't making calls on your mobile phone.

So that was really dead time and the same logic was lifted and shifted onto railways.

In HS2's business case, just under 30% of the economic benefits were thought to come from journeys taking business travellers less time.

Time it was assumed they couldn't spend working on the train.

In 2011, that seemed sensible.

Years later, however, Andrew was asked by the government to come back and review HS2's business case once again.

We were expecting a Rolls-Royce business case at that point.

The features that we were expecting to be added hadn't been added.

Including an up-to-date assessment of the value of business travelers time.

The choices that were being modelled were fed in from a time before

people could work as productively on trains as perhaps they can today.

So before the widespread use of smartphones, before train Wi-Fi and laptops.

Exactly.

Is that surprising?

It was very surprising.

Even in the early days, this calculation changed how HS2 was seen.

After all, it was called High Speed 2, and the numbers backed up that importance.

So, speed is where journalists focused.

This is the vision of Britain's super railway.

Trains traveling at speeds of up to 250 miles at £17 billion and would cut the journey by half an hour.

From Birmingham to London in 49 minutes, it's going to be a real boost to the business.

The public got the impression we were about to spend billions just to knock 30 minutes off a trip to Birmingham.

And actually, how economists valued business travellers' time had a bigger impact.

The engineers who first designed HS2 were working alongside economists.

HS2's first technical director, Andrew McNaughton, says the two were regularly comparing notes as they developed the line.

Are you saying that the economic case fed back into the design?

Yes, indeed.

That over that first year circulated round several times and the benefit was the thing that really drove the final answers.

One decision fuelling another.

Keen to make their case as strong as possible, HS2 also went further than any Treasury guidance.

They had this idea that building something as big as HS2, bigger than any other public project, could somehow change the way Britain worked.

So as an alternative alternative to the benefit cost ratio, they also tried to calculate how the railway could improve the productivity of the entire nation.

Henry Overman is a professor of economic geography at the London School of Economics.

It just led to some wild claims.

2013 analysis by KPMG accountants suggested HST would bring £15 billion of growth.

At the time, that was 0.8% of GDP.

But something that just felt infeasibly large for a railway line that was going to be carrying 20,000 people at peak.

So I think that it sort of started from the nub of something that was there.

Well, maybe there should be a bit more transformation.

It feels a bit different.

It's the biggest scheme we're doing.

And the problem was that it just got sucked into sort of mutually assured exaggeration.

And then you end up with statements that don't pass the sniff test.

Two camps had now emerged.

Cost counters were deeply sceptical of HS2's business case, while politicians and engineers had bought into the ambition of the strategic case.

The battle lines that would later define the project were being drawn.

Sir Philip Rutnam, the then Permanent Secretary to the Department for Transport, freely accepts that the business case did not perfectly reflect the strategic case for the new railway.

If you look at the strategic arguments that were being made about HS2, actually they were rather more fundamental to my mind.

It's so strongly linked to the question, which is a political question ultimately, of what kind of country do we want to be.

So we were trying absolutely to put a lot of weight on the strategic arguments, but time and again what you find is that the Treasury or members of parliament, particularly those who didn't like the project, or journalists, go to numbers.

They go to the precise some claimed cost-benefit ratio, which frankly is a pretty artificial way of thinking about this project, particularly at such an early stage.

In the short term, this lack of cohesion between economic and strategic thinking made it seem as though HS2 was moving the goalposts simply to clear political hoops, and knowingly leaving flaws in the business case was a long-term risk, too.

After all, what happens if, over the years, someone with a treasury mindset becomes the ultimate decision-maker?

a former chancellor perhaps.

Well, then your very foundations may turn out to be quicksand.

The final thing I have to mention about the public story of HS2 isn't what was put in, it's what was left out.

The story which could have been told.

For that, we need to go to Leeds.

We were very keen in Leeds.

James Lewis is now the leader of Leeds City Council.

My local railway station in my council ward in Micklefield, which is on the line between Leeds and York and Leeds and Hull.

There's a couple of local trains which stop and pick people up, but in between all of those, there's the express trains from Manchester to Leeds to Newcastle to Hull.

The key to having a better local rail service, more frequent trains, and trains less likely to be delayed because of being held to let an express train coming through is having the express trains on HS2.

Go and stand at your local station for 30 minutes and count not just the trains which stop but those which pass straight through.

If you took those rushing behemoths out and put them on another line, let's say a high-speed line, there would be more room for your local stopping services.

But that, he tells me ruefully, got lost in the noise.

The way it got talked about in the national media, the focus on

from Leeds it was 25 minutes quicker from Leeds to London than the existing rail service.

Rail engineer Gareth Dennis agrees.

In the early documentation, it's clear as day that the purpose of the railway is to create new capacity on the high speed line and critically, the most important element, to create additional capacity on the existing railways.

But the communication of those concepts was almost non-existent.

And the official story, the business case, never spelt out how any additional capacity generated would be used to drive local benefit.

Andrew Meany.

I think if your purpose for the scheme is to create more capacity and those commuter trains are going to mean you can build all these houses around Milton Keynes and you can build these strategic freight interchanges and you can have freight trains whizzing up and down and that's going to be fantastic for the economy.

But if you can't articulate that then you're missing a really key part of the analysis and a key part of the story and why you're doing this.

Missing this this essential argument could let people living along the route feel like they were bearing the brunt of construction while getting nothing in return.

This was perhaps HS2's fatal flaw.

Not its cost, not its straight-line thinking, but its story.

And you leave that vacuum and the detractors are the ones who get hold of the microphone, right?

The detractors were about to arrive in force.

They're being asked to sacrifice for a business case that doesn't stack up.

It's horrendous.

There's the smell of rebellion in the air.

Listen to the full series right now, first, on BBC Sounds.

From BBC Radio 4.

The Russians will be launching a satellite sometime in the next three weeks.

I'm Kim Cottrell, back with a new series of Central Intelligence.

This is a CIA Covert Op Top Secret.

The drama podcast that tells the history of the CIA from the inside out.

Starring Ed Harris, Johnny Flynn, and me, Kim Cottrell.

Ms.

Page, such a pleasure to meet the real American.

Listen to Central Intelligence Series 2 first on BBC Sounds.

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