HS2’s ballooning budget was ‘covered up’

August 27, 2019 by No Comments


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Media captionHS2: How much work has already been done?

On Monday 6 April 2016, senior High Speed 2 official Andrew Bruce says he was set to reveal an uncomfortable truth to leading figures at the Department for Transport and HS2 itself.

His presentation, scheduled for 15:00 BST, on the fifth floor of the ornate Sanctuary Buildings in Westminster, would be the culmination of months of work.

After a detailed analysis of vast amounts of data, the decorated former army colonel believed the cost to the taxpayer, of the land and property needed to build the railway between London and Birmingham, was much higher than HS2’s official estimate at the time of £2.8bn.

His detailed calculation, which the BBC has studied, put the figure £2bn higher.

‘As if I had never existed’

The notion that HS2 could not be delivered within its £55.7bn budget had the potential to derail the scheme, months before a crucial vote in Parliament.

However, Mr Bruce’s presentation never happened. About half an hour before he says he was due to deliver it at a board meeting, he was fired.

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Andrew Bruce believes HS2 was underestimating the cost of land and property

“My work was never seen again,” he told BBC News, in his first interview.

“It was completely removed from the body of knowledge of HS2. It was as if I had never existed.

“I was dismissed to stop the figures that had been produced from going to the Department for Transport.”

The BBC has seen emails, internal reports and vast amounts of data which back up his account.

However, HS2 says it does not recognise Mr Bruce’s version of events.

One email he received from a colleague shortly after his dismissal described his work as “gold dust” and expressed concern that it might now be “trashed”.

We have also spoken to two other former directors at HS2, who also alleged that other senior figures at the company were concealing the project’s true cost.

HS2 strongly denies this.

When Doug Thornton was director of land and property at HS2, he says he refused to use an outdated and misleading cost estimate. He was fired soon afterwards in December 2015.

For a project on the scale of HS2, the land and property department is vital.

Proper compensation must be paid and complicated legal processes followed, to ensure every phase of construction can proceed as planned.

But in December 2015, the department was “understaffed” and did not have a plan, according to a report by the consultancy firm Deloitte.

Mr Bruce, who was head of planning at land and property, says that in early 2016, eight new members of staff were due to be recruited into his team.

However, it never happened. He says he was suddenly inexplicably moved from London to HS2’s office in Birmingham and found himself effectively working on his own.

He was motivated by the stark inaccuracy of the estimate, which was being used for all the land and property needed for the first stretch of the railway.

The £2.8bn figure in the budget was based on a simplistic and inexpensive assessment.

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Siemens/ PA

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A proposed design for an HS2 train

According to Mr Bruce, people at CBRE, the company which carried out the work on HS2’s behalf, were “angry” it was still being used as the official figure years later.

There is no suggestion CBRE did anything wrong.

But that early property cost estimate only related to around 5,500 properties or plots of land for Phase One, when in reality HS2 needed to buy about 11,420 by compulsory purchase.

In effect, half of the plots or properties required had a value of zero. On top of that around 1,600 had a token value under £1,000.

“I was seeing blocks of flats in central London for £500,” says Mr Bruce. “Houses and gardens in Euston for £600. It went on for page, after page, after page.”

The former military man from Fife, who previously managed vast programmes for the British army in both Iraq and Afghanistan, says he worked around the clock for weeks to improve the data.

He was “nervous” about presenting a £2bn overspend to his boss, other senior managers and civil servants overseeing the project.

“I was going to tell them something they very much didn’t want to hear.”

‘Utter shock’

On the morning of the presentation, colleagues joked that he would probably be fired.

But he was confident about the rigour of his work, to which the BBC has had detailed access, and he did not see it coming.

“It came as an utter shock.”

He says he insisted he needed to give the presentation, but he was not allowed.

In a matter of minutes after his sacking, he had been escorted from the building.

A week later, in a letter, HS2’s HR department claimed his performance had been “unsatisfactory”.

But Mr Bruce insists he was never given a performance review and that he had surpassed all of his targets. He tried to appeal against his dismissal, but HS2 claimed it received his appeal too late to consider it.

“HS2 knew it was going to cost more. They knew they didn’t have the budget to compensate people properly.”

The £2.8bn figure was part of HS2’s overall submission to Parliament for Phase One, which was voted through by a massive majority of MPs in February 2017.

But Mr Bruce believes Parliament was “misled”.

“The true cost was absolutely covered up.”

HS2 is owned and ruled by the government.

Mr Thornton says he regularly briefed senior officials at the Department for Transport that the budget was “unachievable”.

HS2 disputes Mr Thornton’s claims.

Mr Bruce also says it is inconceivable that HS2’s political masters were unaware of the overspend.

“They could say that they never knew. I would say they closed their eyes.”

HS2 strongly rejects the idea that a truer estimate for the cost of land and property needed between London and Birmingham was covered up in the first part of 2016.

A spokesperson said it did not recognise Mr Bruce’s claims.

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Getty Images

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The plan has attracted fierce criticism from some of those living on the intended route

Last year the National Audit Office (NAO) investigated his allegations and cleared HS2 of any wrongdoing.

The NAO’s report, published last September, said at the time Parliament did not “require” HS2 to update and improve its estimate.

Mr Bruce described that finding as “disgraceful” and said the report was a “whitewash”.

HS2 said it was “incorrect for Mr Thornton or Mr Bruce to say that they were dismissed because of a desire to hide the true cost.”

The company said a decision to revise the estimate had already been taken while Mr Bruce was still working at HS2.

HS2 said a “very significant request for funding” to cover the additional cost was made to the government as part of a spending review in 2015.

However, it has not explained why the unrevised, £2.8bn estimate was still submitted to Parliament.

The Department for Transport said the NAO report found that changes to estimates over the cost of property needed in large complex projects should be expected.