HS2: Review to examine costs and benefits of rail project

The government is launching a review of high-speed rail link HS2 - with a "go or no-go" decision by the end of the year, the Transport Secretary Grant Shapps has said.

It will consider whether and how the project to connect London, the Midlands and northern England should proceed.

Billions have already been spent, but Mr Shapps refused to rule out scrapping it entirely.

He said it was "responsible" to see whether the benefits really "stack up".

Phase 1 of the development between London and Birmingham is due to open at the end of 2026, with the second phase to Leeds and Manchester scheduled for completion by 2032-33.

It is designed to carry trains capable of travelling at 250mph.

When asked about the money already spent on the project, Mr Shapps said: "Just because you've spent a lot of money on something does not mean you should plough more and more money into it."

He said ministers were asking the reviewers "just give us the facts".

"Go and find out all the information that's out there… genuinely what it would cost to complete this project, and then we'll be in a much better position to make that decision - go or no-go by the end of the year."

The review will be chaired by Douglas Oakervee, a civil engineer and former chair of HS2 Ltd.

Lord Berkeley, another civil engineer who worked on the construction of the Channel Tunnel, will act as his deputy. The Labour peer has previously been critical of the project.

A final report will be sent to the government in the autumn.

During the Conservative Party leadership campaign Boris Johnson said he would not scrap plans for the new rail link, but did express "anxieties about the business case".

In July, the current chairman of the project reportedly warned that the total cost could rise by another £30bn - up from the current budget of £56bn.

Labour peer Lord Adonis, a former transport secretary who worked as an infrastructure adviser to Theresa May, said the review was "as stupid as you can get" and would "screw Birmingham and the North".

He tweeted that it would become "a massive bun fight, while the transport department runs for cover and HS2 Ltd is paralysed by indecision".

The review will look into:

Former Transport Secretary Chris Grayling argued that new rail links were needed to take pressure off a system which was "bursting at the seams".

And in June this year, more than 20 business leaders urged the government to deliver HS2 in full, arguing it would "spread the flow of investment across the Midlands, the North of England and into Scotland".

The Conservative Mayor of the West Midlands, Andy Street, who will sit on the review panel, said HS2 was "vital" for the West Midlands and was "already creating jobs and building new homes".

But Conservative MP Dame Cheryl Gillan, whose constituency HS2 will run through, told BBC Radio 4's World at One its costs had risen "astronomically" and it was "now completely unviable in terms of value for money for the British taxpayer".

In May, a committee of peers argued the project risked "short changing" the North of England.

Their report said the scheme put too much emphasis on cutting journey times and not enough on the economic impact on regions.

It also called for the Northern Powerhouse Rail scheme - a separate scheme connecting towns and cities in the region - to be completed alongside HS2.

Labour Mayor of Greater Manchester Andy Burnham, who supports HS2, complained that the review panel included two elected representatives from the West Midlands but none from the North.

Shadow transport secretary Andy McDonald said Labour supported investment in new rail capacity, adding that "improved governance of railway expansion is needed, not least over the HS2 project."

One Conservative MP, Bob Seely suggested the "top half" of HS2 - the section covering the North of England - should be built, but not the Birmingham to London route, which he described as "a monumental white elephant".

The key question is, is HS2 value for money? One former senior figure at the Treasury said to me recently that in terms of that it scores much lower than many other projects, so the government is taking quite a big risk putting so much money into it.

The government could cancel it - but, of course, the main caveat to that is the amount that has already been spent and would be lost. For all the opposition to it, HS2 also has a lot of passionate supporters too and they would be unhappy.

Rather than scrapping it altogether then, perhaps the more plausible option is altering the plans in some way.

Trust me though, even doing will not be straightforward for financial or legal reasons.

Joe Rukin, from the Stop HS2 campaign, said: "If this is a genuine review, they must stop work now, because irreparable damage is being done right now to unique habitats, ancient woodlands."

He accused HS2 of "sending out possession orders like there is no tomorrow", referring to the compulsory purchase of properties in the path of the line.

He also raised concerns that the review chairman, Mr Oakervee, was being given a chance to "mark his own homework" given his previous role on the project.