The National Infrastructure Commission (NIC) was asked by Boris Johnson in February to look into proposed projects to help inform the Government’s integrated rail plan.
And the report, released this morning, found that prioritising regional rail links over long-distance schemes such as Phase 2b of HS2 would likely deliver more economic benefits.
Sir John Armitt, who chairs the NIC, said: “Major rail schemes will be an important component in levelling up the country’s economic geography, but we should ensure public money is carefully spent where it can make the most difference.
“The number and scale of rail schemes currently being proposed for the North and Midlands mean that some form of prioritisation will be necessary, and we think there are ways of bringing forward benefits for communities and businesses while keeping options open for additional investments, if the circumstances are right.
“Our independent analysis offers Government various ways of targeting spending depending on the precise economic and social outcomes it wants to achieve.”
A Department for Transport spokesman said: "We welcome the NIC’s Rail Needs Assessment report published today, which suggests how we can improve our future rail network in the North and Midlands and ensure projects like HS2 and Northern Powerhouse Rail work together to deliver the reliable train services that passengers deserve.
“It is necessary that we take the time to consider these recommendations in full, and we therefore expect to publish the Integrated Rail Plan in early 2021.”
Although advisers said it would be better to focus on regional links, they did not dismiss the eastern leg of HS2 - which would run from the West Midlands through to Sheffield and Leeds - completely, as the report said “by initially prioritising regional links, this does not rule out the further development of options such as the HS2 Phase 2b eastern leg that also have strategic value”.
But they said the baseline investment of £86bn was now “unlikely to meet the strategic objective of levelling up in the North and the Midlands”, and therefore the Government would have to go further.
They said the three options were either to stick with the baseline, up the budget by 25 per cent to prioritise local links (including HS2’s western leg), or by 50 per cent to look at long-distance links.
And they said there could be a “strategic case” for upping the budget to £129bn (50 per cent), “if core schemes remain on track and public finances can accommodate greater investment in complementary initiatives to support regional growth”.
However even then, that would not cover all proposed rail schemes in the North and the Midlands, which advisers said would total £185bn.
Northern Powerhouse Partnership Director Henri Murison said: “The conclusions from the National Infrastructure Commission lack the economic rationale of previous work, such as the Northern Powerhouse Independent Review into HS2 published a year ago. Our businesses, our local leaders and our communities have repeatedly and compellingly made the case that the only way to provide the connectivity and capacity the Northern Powerhouse so badly needs is by delivering the Eastern leg of HS2 in full.
“It’s time now for the government to take the clear, bold decision to recommit to what they promised in February – to build High Speed North in full. That is HS2 and Northern Powerhouse Rail from east to west, Leeds to Manchester and beyond. With that commitment, the North should then manage how to best integrate HS2 and Northern Powerhouse Rail with an arms-length delivery body answerable to our civic and business leaders alongside the Chancellor.”
While a joint statement from Judith Blake, Leader of Leeds City Council, Kay Cutts, Leader of Nottinghamshire County Council, and Dan Jarvis, Metro Mayor of the Sheffield City Region - on behalf of the Connecting Britain campaign - said: “We are hugely disappointed by the publication of the Rail Needs Assessment today. Let us be clear: the alternative options to delivering HS2 in full put forward by the National Infrastructure Commission would be deeply damaging to the North and the Midlands, and would seriously damage attempts to close the divide between London and the South East and the rest of England.
“Nothing less than the full delivery of HS2 – which the Government has already committed to – is acceptable to civic and business leaders in the North and Midlands. We call on Government in the strongest terms to reject these substandard proposals and stick to the public commitment made by the Prime Minister earlier this year to build HS2 all the way to Leeds and Manchester.
“The North and Midlands stand ready to work with Government to get spades in the ground and ensure the best and most effective rollout of new high speed lines North, South, East and West for the East Midlands and the North. Only by delivering those projects in full, creating more capacity for commuter trains and freight, can the jobs and growth needed to level up ever truly be secured.”
Jim McMahon, Labour's Shadow Transport Secretary, added: “If the Government is serious about improving British infrastructure, supporting jobs and improving connectivity in the north it cannot now row back from building HS2 in its entirety.
“Recent cuts to Network Rail and failures to deliver pledged investment in the North and Midlands show the Government is not keeping its promises."