Today’s judgments won't derail HS2 - but serious questions remain

High court rules on compensation over HS2.

The Department for Transport will, once again, be in the spotlight today as the High Court gets set to rule on whether the government followed proper procedures before approving its HS2 rail project. Given the recent lamentable procedural failures over rail franchising, tension within the Department will likely be running high.

From the government’s point of view the best outcome is obviously a green light from the court. Not only will this save blushes at the Department, it will allow the coalition to push, full steam ahead – if that is the correct idiom for a project that will not bear fruit until 2033 – with what has become one of its flagship projects.

However, even if the judicial review does come down in favour of the protest groups it is unlikely that HS2 will be halted completely: in rail terms it will receive an amber light rather than a red one.

The protestors no doubt hope that any legal setback to the project will open the way for further challenges which will pull HS2 into a quagmire of reviews and disputes which could carry on until the government finally loses interest or, at least, until the next election is called.

This hope is probably in vain. Given the number of recent setbacks and U-turns the government will be in no mood, or position, to compromise over a scheme it has so solidly thrown its weight behind. Just like the weary commuter, waiting for the train back home after a long day at work, the government will likely accept the delay with resigned determination. This is doubtless helped by the fact that there is widespread support across the political spectrum for HS2. For many on the left it is one of those big infrastructure projects which not only creates jobs and opportunities but also helps to narrow geographical disparities between London and part of the country.

What the outcome of the judicial review will not do is resolve, conclusively, whether HS2 is a sensible idea. Here, so many questions remain unanswered.

There is the argument that the benefits of the spending should be spread more widely. For example, despite commitments on electrification, parts of the rail network in the South West remain chronically deprived of investment. Certainly, dividing the pot of HS2 money up more equally between the regions would produce a less dramatic, less visible end result. However, smaller incremental rail improvements across the country may yield a much greater economic benefit than one big, budget-busting project.

In many ways this is an argument about the need for speed. HS2 will certainly reduce journey times between London and the midlands and parts of the north, however, given the lofty sums of money involved the improvements are marginal at best. Moreover, given the fact that many people use their time on the train fairly productively – whether working or relaxing – there is a real question mark over whether a faster journey accrues genuine economic benefits. The debate is further complicated by the point that without improving regional transport connections – those roads and public transport services which feed into the stations HS2 serves – a reduction of time spent on the train probably becomes pretty pointless.

The one thing HS2 will certainly do is help improve capacity; something much needed on a rail network that is now bursting at the seams. However, HS2 is an expensive solution to this issue and there are simpler ways of increasing capacity. Adjusting the existing infrastructure to accommodate double-decker and longer trains, for example, would cost a fraction of HS2.

The answer to all of these points – and many more – will simply not come from the outcome of today’s review. Nor have they come from government, which has presented a less than compelling case for its policy. Only time and hindsight, it seems, will help us form a view of whether HS2 is a sound scheme. For now, the jury is still out.

The Department for Transport will, once again, be in the spotlight. Photograph: Getty Images

 Managing Director of Conlumino

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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