New research showing HS2’s economic benefits could be greater and sooner are hugely welcome says Antony Oliver

Government is expected to reveal new research by consultant EY this week demonstrating that the High Speed 2 project could actually contribute some £40bn to the UK economy.

Not only that, according to leaked reports, it is set to say that residential and commercial schemes already underway around the new stations at Birmingham Curzon Street, Old Oak Common in West London, and Manchester Piccadilly will generate £1bn a year every year until the project opens in 2035. 

There have of course been many studies into the likely economic benefits from the HS2 project, the most recent by KPMG just over a year ago. This put the figure at £15bn but suggested that we might have to wait until 2037 before the impact would be felt.

One of the greatest benefits from this renewed focus on preparation ahead of the railway’s arrival is, of course, the fact that the economic and social uplift is likely to manifest itself that much earlier. HS2 is not, after all simply intended a new railway line but to coin another phrase “an engine for growth”.

So what has changed now? 

Well it seem that this new work predicts a much greater regenerative effect across the regions touched by the new rail line with the thousands of new homes and offices now expected to be constructed around the nine new HS2 stations between London and Manchester and Leeds.

And given the renewed effort by government to channel investment towards the economic “powerhouses” of the Midlands and the North – not least following July’s multibillion first tranche of funding directed towards Local Enterprise Partnerships – it is easy to see why these conclusions might be reached.

This week HS2 holds the first of two supplier days for the project at which the first reality of constuction contracts flowing from the project will be revealed to the industry, first in London then in Manchester.

The fact is that the UK remains too heavily skewed economically towards London. But the solution is not, of course, to switch off London but rather to switch on the rest of the UK. 

And that is precisely what projects like HS2, are there to do. 

But as we are now seeing, investment in the transport spine has to be done in parallel with investment in, and crucially around, the new hubs that are created at stations. 

What is clear is that as this project gradually passes through the complex and long winded planning process it is also gradually morphing into a reality. 

That means morphing from a set of plans that are feared and threatening towards a project that really must be embraced across the UK as the agent for change.

It is all very unusual for a UK major infrastructure project but that is precisely what we are seeing amongst the local authorities, LEPs and city regions as they genuinely start to prepare to reap the economic and social benefits of the forthcoming greater connectivity by being “HS2 ready” as the government puts it.

One of the greatest benefits from this renewed focus on preparation ahead of the railway’s arrival is, of course, the fact that the economic and social uplift is likely to manifest itself that much earlier. HS2 is not, after all simply intended a new railway line but to coin another phrase “an engine for growth”.

Scoff at such phrases perhaps but there is now evidence that this is engine could be firing. And with the regions seeing major investment and benefits that much earlier it will surely help to start the long awaited process of rebalancing the economic pendulum away from the capital.

Antony Oliver is the editor of Infrastructure Intelligence.