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The Star
4 days ago
- Business
- The Star
News Analysis: Britain delays second high-speed railway construction, again
by Xinhua writers Zheng Bofei, Larry Neild LONDON, June 18 (Xinhua) -- Britons won't be boarding their second high-speed railway -- High Speed 2 (HS2) -- before the 2030s, as the government confirmed on Wednesday that construction has been delayed until at least 2033. The delay stems from years of mismanagement and escalating costs, spanning from the tenure of the Conservative government to the current Labour administration. Sixteen years after HS2 was first proposed, Britain has yet to lay a single track for its long-planned rail line -- more than two decades after the country launched its first high-speed railway, HS1, which links London with the Channel Tunnel. The HS2 project was initially expected to cost 33 billion pounds (44.22 billion U.S. dollars) in 2012 and open by 2026. In a statement to the House of Commons on Wednesday, Transport Secretary Heidi Alexander said that based on an interim report conducted by HS2 chief executive Mark Wild, "I see no route by which trains can be running by 2033 as planned." The report concluded that there was "no single root cause" behind the rising costs and delays at HS2 Ltd, but rather "an accumulation of issues over time." UNREALISTIC PLANNING When HS2 was first envisioned, the rail line was planned to connect London to Manchester and Leeds, linking major cities such as Birmingham as part of a broader route to the north of England. However, under former Prime Minister Rishi Sunak's Conservative government, the plan was scaled back to only include the section from London to Birmingham. According to The Guardian, when the Department for Transport (DfT) set the Phase One budget in 2013, only a "basic design" existed. Poorly suited to early-stage planning, the proposal lacked sufficient contingency provisions. As a result, the projected cost soared to 55.7 billion pounds by 2015. One early miscalculation was the decision to route HS2 through the Chiltern Hills. Bowing to political pressure from local interests, the government added expensive tunnel segments in 2013, causing the budget to be reset to 50 billion pounds. In January 2020, the National Audit Office reported that HS2 was billions over budget and years behind schedule because the government had "failed to understand the risks" inherent in the project. Internal reviews by HS2 Ltd, the public company managing the project, found the full network could cost up to 88 billion pounds and might not be completed until 2040. Nevertheless, by late 2019, the government's funding envelope remained fixed at 56 billion pounds -- well below projected requirements, leaving a major shortfall. Chen Chai-Lin, senior lecturer at the University of Liverpool's Department of Geography and Planning, who has long studied high-speed rail development, told Xinhua: "It is an embarrassment to the country to have a project that was first announced 16 years ago, and Britain still relies on railway as its major transportation option." "To do a contract with the UK, all this uncertainty adds to the future project. I think we need to sit down and then try to reflect on this situation. What's the future for the UK?" said Chen. "APPALLING MESS" In her Wednesday address, Alexander described HS2 as an "appalling mess" -- a "litany of failure" that resulted in missed deadlines and cost increases of 37 billion pounds between 2012 and 2024. She confirmed the appointment of Mike Brown, former commissioner of Transport for London, as the new chair of HS2. Systemic management problems and weak governance have compounded delays over the past 16 years. HS2 Ltd has experienced persistent internal lapses and high turnover. In its 2013 assessment, the Infrastructure and Projects Authority cited major, seemingly unresolved issues in HS2's scope, timeline, budget, and benefits, warning that the project might need to be rescoped or fundamentally reassessed. In 2017, HS2 Ltd admitted to paying 1.8 million pounds in unauthorized redundancy compensation -- a serious breach of governance. Despite multiple attempts at reform, oversight remained inadequate. In February 2025, Parliament's Public Accounts Committee (PAC) declared HS2 a "casebook example of how not to run a major project." The PAC cited a "cycle of repeated failure" in collaboration between the DfT and HS2 Ltd, highlighting ongoing disagreement even over fundamental matters such as final cost, scope, and delivery date. POLITICAL MALFUNCTION Over time, HS2's original purpose became clouded by shifting government priorities. After commissioning an independent review in 2019, then-Prime Minister Boris Johnson gave the project the green light in early 2020, but simultaneously scrapped the eastern leg to Leeds as a cost-saving measure. In November 2021, the government officially cancelled the Leeds branch of Phase 2, abandoning plans to extend HS2 to the East Midlands and Yorkshire. The decision, prompted by concerns over rising costs, was seen as a politically convenient way to cap spending, but it also undermined HS2's core objective of improving northern England's infrastructure. "If investing in major infrastructure projects is an important sign that the UK is focused on growth and tackling regional inequality, this decision seems to signal the opposite," said the Institute for Government (IfG) in 2023. In March 2023, in the face of rising inflation and tight public finances, then Transport Secretary Mark Harper announced the deferral of key HS2 segments. Phase 2a (Birmingham to Crewe) was delayed by at least two years, and construction of the London Euston terminal was paused indefinitely. Although the official justification was to distribute spending more evenly over time, the delays only raised long-term costs. The pause at Euston followed a surge in the station's estimated cost to 4.8 billion pounds -- nearly double the original budget -- largely due to changes in design and scope. As a result, the launch of HS2's first phase was pushed back. Rather than reaching central London, initial HS2 services will terminate at Old Oak Common in west London, with no trains expected to reach the city centre before the 2040s. Rather than planning every detail years in advance, ministers and officials should focus on launching a minimum viable option and scaling up over time to avoid locking into expensive and inflexible commitments, the IfG recommended. In October 2023, ahead of a general election, Prime Minister Rishi Sunak cancelled the remaining northern half of HS2 -- the Birmingham to Manchester section -- during his Conservative Party conference speech. This sudden reversal came despite billions already being spent on planning and land acquisition for the now-abandoned route. Industry groups strongly criticized the decision. A suppliers' association remarked, "Every change in scope has added to the delays and costs" on HS2. As the PAC later noted, recent government interventions have had "damaging consequences" for HS2's timeline and financial health. As Geoffrey Clifton-Brown, PAC chair, put it: "It is time to deal with HS2 as what it is -- a cautionary tale that should be studied by future governments in how not to run a major project." (1 pound = 1.34 U.S. dollar)
The Star
11-06-2025
- Business
- The Star
News Analysis: Britain's spending review signals ambition, but faces fiscal, delivery test
By Zhao Xiaona, Larry Neild LONDON, June 11 (Xinhua) -- Britain's Labour government has launched its most ambitious spending review in over a decade, pledging large-scale investments in health, defence, housing and regional infrastructure as part of a broader plan to "renew Britain." The review signals a clear break from past austerity and outlines the country's fiscal and political direction through 2030. However, analysts caution that the bold agenda, unveiled against a backdrop of high public debt and economic uncertainty, will ultimately be judged on whether it delivers tangible results without compromising fiscal sustainability. AMBITIOUS PLANS WITH MIXED BUDGETS British Chancellor of the Exchequer Rachel Reeves presented the first full-scale spending review of the new government to Parliament on Wednesday. It sets departmental budgets through 2029 and capital investment plans to 2030, framed as a blueprint for long-term renewal. Reeves pledged an end to austerity, insisting on fiscal discipline. The review includes a 29 billion pounds (39 billion U.S. dollars) annual uplift in the National Health Service's operational budget, representing a 3 percent real-terms annual increase to support general practitioner training, school-based mental health care, and digital transformation in health services. Defence spending is set to rise from 2.3 percent to 2.6 percent of gross domestic product by 2027, with funds allocated to nuclear deterrence, munitions production, and military housing. In housing, the government pledged 39 billion pounds over 10 years for social and affordable homebuilding, along with 10 billion pounds in financing to attract private investment. A further 15.6 billion pounds will be directed toward local transport upgrades, including the Oxford-Cambridge rail corridor and the TransPennine Route in northern England. However, not all departments will see gains. The Home Office will face a 1.7 percent annual average real-terms cut to its operating budget, while the Foreign Office will see a 6.9 percent reduction, largely from scaled-back overseas aid. The Department for Environment, Food and Rural Affairs will face a 2.7 percent cut, and budgets for culture, non-core education, and digital policy are expected to remain flat or decline by the end of the review period. Meanwhile, the government expects savings from ending hotel accommodation for asylum seekers - estimated to save around 1 billion pounds annually. FROM BLUEPRINT TO BUDGETARY STRAIN While the review was welcomed by some as a strategic reset, experts and opposition voices raised concerns about its fiscal viability and delivery risks. Professor Iain Begg of the London School of Economics told Xinhua that the plan marked a "strategic adjustment" rather than a structural overhaul. He welcomed investment in long-neglected northern regions but cautioned that expected savings from digitisation in health and tax administration "often fall short of government hopes." Britain's fiscal headroom remains limited. Public debt now exceeds 100 percent of gross domestic product, and borrowing in the 2024 to 2025 fiscal year reached 148.3 billion pounds. Debt interest costs have nearly doubled since 2018, now accounting for nearly 10 percent of total public spending. Despite leading G7 nations in first-quarter 2025 growth at 0.7 percent, the economy still faces inflation at 3.4 percent and rising unemployment at 4.6 percent. Against this backdrop, the review's ambitions face significant delivery risks. Paul Johnson, Director of the Institute for Fiscal Studies, observed that while headline spending appears generous, much of it is front-loaded in the first two years of the current Parliament. "Take Phase Two alone, from 2026 to 2029, and the picture is tighter," he said. He pointed out that eight departments will actually see real-terms cuts by the end of the review period, with schools, the environment, and overseas aid among the biggest losers. Johnson also questioned whether the NHS funding increase would be sufficient to achieve its most ambitious target: restoring the 18-week waiting time guarantee for hospital treatment. Much of the Chancellor's strategy relies on expanded capital investment. The government plans to spend an additional 113 billion pounds on long-term infrastructure over the life of the Parliament, from green energy projects to new rail lines and prisons. But the same period is also expected to see 140 billion pounds in additional borrowing, a figure that raises concerns about the cost of debt servicing. "The question is whether the extra investment will deliver enough benefits to justify the rising cost of public debt," said Johnson. The opposition Conservative Party strongly criticised the plan. British Shadow Chancellor Mel Stride warned of "a cruel summer of speculation" over future tax hikes, arguing that Labour's reliance on borrowing would soon demand fiscal correction. The leader of the Conservative Party Kemi Badenoch added that such borrowing risked "choking private investment and burdening the next generation." Britain has struggled with delays and cost overruns in public infrastructure. The NHS faces chronic staff shortages, and some expected savings, such as from ending hotel use for asylum seekers or rapid digitalisation, remain speculative. With public expectations high and economic conditions fragile, analysts stress that implementation will be the ultimate test. "The Treasury has shown its priorities," said Johnson. "The question is not just whether the money is enough, but whether it will be well spent." (1 pound = 1.35 U.S. dollar)
