Hitting the Buffers

The Dept. of Transport had lost control of the HS2 programme and the spiralling costs – £30 billion, then £40 billion and now £50+ billion are ‘based on fragile numbers.

The best piece of entertainment last month was the televised Commons Public Accounts Committee tearing into the revenue, cost and programme estimates of the new HS2 high speed rail link. The Committee suggested the Dept. of Transport had lost control of the HS2 programme and the spiralling costs – £30 billion, then £40 billion and now £50+ billion are ‘based on fragile numbers, out-of-date data and assumptions which do not reflect real life’. The assumptions include a 10-year old belief that technology does not exist which allows businessmen to work on trains. The DoT consider the vast capital cost of shaving a few minutes time off the London-Birmingham journey is thus justified. Their spokesperson seemed blissfully unaware of broadband, video conferencing, smart phones and tablets. The best part was the admittance that cost estimates were ‘industry-generated’ (Civil Service-speak for: ‘We asked a builder’.)

One commentator has likened HS2 to the scandal of the new Scottish Parliament building – on wheels. The Holyrood building’budget grew from £40m to over £300m and the end result looks like a 1970’s car park designed by someone on acid.

Chairperson of the PAC, Margaret Hodge questioned the DoT’s assertion a faster train link would spread wealth into the provinces. The experience of the Spanish HS network seems quite the reverse and Mrs Hodge pointed out: ‘The evidence suggests when you improve the link between a capital and provincial cities…you draw economic activity down to the capital and don’t stimulate activity in the cities.’

He admitted it was politically-driven and costings were ‘almost entirely speculative’.

The former Business Secretary, Lord Mandelson later admitted the last government proposed HS2 before the 2010 general election ‘to paint an upbeat view of the future’ after the 2008 financial crash. He admitted it was politically-driven and costings were ‘almost entirely speculative’ which has left many puzzled at the PM’s continued support for the project.

This saga would be great knockabout entertainment if it didn’t have the potential for another financial disaster. More enlightening was the publication of the so-called ‘Grimsey Review’ by the eponymous Bill Grimsey, formerly Director of Wickes, Iceland and now-defunct Focus. This privately-sponsored report is worth a read. http://www.vanishinghighstreet.com/the-grimsey-review

It is intended as an antidote to the Government-promoted Portas Report into ‘The future of our High Streets’ . Unlike that it is based on some serious research by the Local Data Company and opinions of a diverse group of retailers. It re-covers old ground like the impact of new technologies on retailing (on-line sales c.20% of sales turnover and growing at 10% p.a.) and the Business Rates regime which has not evolved to keep pace.

Online shopping for food (only currently 3% of sales) will increase once Amazon, Morrisons and PayPal get into top gear.

Grimsey concludes there are simply too many shops in the UK and there is a clear disparity between the North and South. He doesn’t suggest this can be solved by HS2. He also points out that online shopping for food (only currently 3% of sales) will increase once Amazon, Morrisons and PayPal get into top gear, so ‘physical shopping’ will continue to shrink. And that Ebay is quickly catching up with Amazon as a low cost E-commerce platform for independent retailers.

If the UK’s High Streets are over-provided with shops Grimsey suggests support is needed for existing retailers and to encourage non-retail uses. Some of his suggestions are deliverable but many will run into the buffers (sorry about the pun) once the Local Government Association and British Retail Consortium have their say. But there again I thought the same about smoking in pubs. Here are a few:

• The Government ‘Funding for Lending’ scheme designed to support Bank lending to small businesses is not working. It should be replaced by direct lending support from Council reserves and their pension funds to businesses in their catchment.

• Every Local Authority should establish a Town Centre Commission with a 20-year business plan, presented with an annual progress report. Landlords of empty shop units should be compelled to apply for a Change of Use to make the building ‘productive in the community’ with an alternative use.

• ‘MegaMall’ developments should be obliged to create affordable space for local traders and Market stall pitches.

• National retailers should be obliged to invest .25% of one years sales as a one-off levy into a local Economic Development Fund to support start-up businesses.

Radical ideas, but I suspect the report’s real value is in the debate it stimulates.

Much more fun was the outcome of the 2013 ‘Ugliest Town in Britain’ poll run by http://www.craptownsreturns.co.uk. I can’t believe Hemel Hempstead was voted No. 1 in the UK – it can’t be worse than Cumbernauld at No.10 – but ‘Emel (as the locals call it) may be a victim of its own footfall. Lots of people visit and voted as a result.

It might not be stuffed full of architectural gems but it does have a nice Market which deserves your support. Forget your trip to the Chateaux of the Loire and visit ‘Emel instead.