Jack Blanchard: Can new chief find cash to put HS2 on the fast track?

IT’S been a tough old month for that poor, ill-treated class, the highly-salaried quango boss.

First Sally Morgan learns she is to be sacked as head of Ofsted, immediately finding herself at the centre of a coalition storm amid accusations of political bias on 
the part of Tory Ministers and absurd posturing by senior Lib Dems.

Then Lord Smith, the chairman of the Environment Agency, wanders into a storm of a much more serious kind, battered by high winds and widespread condemnation of the agency’s approach to flood prevention.

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The contrast could hardly be greater with the Government’s newest quango chairman, however. Rarely do you hear a civil servant spoken of in such glowing terms as Sir David Higgins, who took up his role as the new chair of HS2 Ltd last month.

The quietly-spoken Australian is being paid a comfortable £591,000-a-year to build this railway line, and yet is lavished with undying praise by all who deal with him. From the Prime Minister downwards, the respect for the man who delivered the London Olympics is almost evangelical. David Cameron tells friends Sir David is the “best in the world” at what he does. Senior Labour figures – with whom the HS2 boss now keeps in almost daily contact – are barely less reverential. There is genuine cross-party confidence that here is a man who can deliver the UK’s biggest infrastructure project in at least a generation on time, and on budget.

His brief, in fact, is to do considerably better than that. Sir David will report back to the Department for Transport next month with his snap assessment of how the £50bn project is faring, and how it could be improved. He is likely to recommend bringing forward the second phase of the project, to start building from both ends of the line instead of just bottom-up. Simple rules of interest and inflation mean the faster that HS2 can be built, the less it will ultimately cost the taxpayer. Time is money. He will also call on all three parties to work much more closely together, to speed the necessary legislation through Parliament.

Whatever Sir David wants, be certain the Government is listening hard. David Cameron has invested a huge amount of political capital in HS2, and urgently needs it to be a success. One of the main problems with trying to sell this project to a sceptical public is that it all seems such a long way off. “Quicker and faster” is an enticing mantra for Ministers in search of a rare PR victory for a scheme that has been badly missold.

“If (Sir David) comes forward with proposals which speed it up, I will want to look at those,” Transport Secretary Patrick McLoughlin has said.

But a big question now looms. Ultimately, the biggest brake on speeding this project up is the rate at which the Government spends its money; in Treasury-speak, the “spending profile”. The current plan is fairly straight forward, and precisely the sort of neat accounting trick so beloved by the bean counters at Horse Guards Road. London’s enormous Crossrail project finishes in 2018, having been effectively costing the Treasury a few billion pounds a year since work began. The plan, in broad-brush terms, is effectively to switch that annual spending smoothly over to HS2, as work begins on the next big rail project. So far, so neat and tidy.

But if the Government is serious about speeding up HS2, it will have to be serious about speeding up the rate at which it spends the overall budget. This will mean finding significant extra sums each year from a public purse which is still a long way from healthy. In the long-term, of course, this should actually mean the project costs less. But that doesn’t make it any easier to sell to a Treasury which is desperately trying to balance the books today.

For all the Government’s warm words about speeding up the delivery of HS2, the big question thus remains – is the Treasury actually prepared to do it? Sir David and Mr McLoughlin both accept it is a conversation which has yet to take place. Asked about the prospects of increasing the “spending profile” by the Yorkshire Post last week, the Chancellor was somewhat reticent. “We are looking at all of this,” George Osborne said. “I’m open to all ideas.”

Being open to ideas, of course, is not the same as accepting them. The Chancellor describes himself as a “huge supporter” of HS2. The question is whether he is a big enough fan to put his hand in his pocket for yet more pieces of gold. The answer will be just along the tracks.

Jack Blanchard is the Yorkshire Post’s political editor. Read his blogs on the Yorkshire Post website or follow him on Twitter @JackBlanchardYP