HS2 spiralling costs

I’ve led on a couple of multi million ££ public sector procurements. TJ, whilst some of what you say may happen to some extent, in some sectors…I can categorically tell you that the contracts i awarded were on merit.

If you have some examples of where you have personally been involved in this corruption, I’m all ears.

(For the record, I can pretty much guarantee that I am at least as left wing/anti Tory/anti corruption as you, but I have worked within the system so speak with some degree of knowledge)

Having been involved in bidding and managing multi-million £ government contracts, I’d say that whilst large companies do employ Government relations specialists, there’s rarely a point where there is a single individual responsible for procurement decisions, particularly with large scale projects where there’s external scrutiny plus Treasury – you’d have to grease a massive number of palms to swing it in your favour.

What you do get is a sclerotically slow and painful decision-making process and that delays to mobilisation do get paid for by government. However, the rates for which the government reimburses the costs of labour is typically fixed through an open-book process – it’s not carte blanche and the actual margins are quite slim. What doesn’t help is political interference where politicians try and influence projects already underway and don’t recognise sunk costs eg a significant amount of planning is done before mobilisation and for HS2 could amount to 30-40% of the total project costs.
Also, in big projects you’re having to deal with civil servants and public officials who often lack the knowledge or experience to make decisions – this can either slow things down, particularly when they change jobs every couple of years, or imbue a false sense of optimism. Secondly, there is an over-dependence on external consultants who come with big fees and soles their intentions aren’t entirely transparent, particularly as they invariably disappear come the actual project delivery.

its about having someone to mention your company

To whom though? Who is making these decisions? Who actually decides who does a particular job?

I’ve led on a couple of multi million ££ public sector procurements

Same here, and now I’m on the other side in the private sector. I’ve never seen any kind of inducement or impropriety in the procurement process.

I think he’s assuming that the bosses of the companies are able to get preferential treatment from ministers by buttering them up. But I am not sure ministers actually sign off on these things? What influence do they have?

sc-xc
Full Member

I’ve led on a couple of multi million ££ public sector procurements. TJ, whilst some of what you say may happen to some extent, in some sectors…I can categorically tell you that the contracts i awarded were on merit.

Can you be as confident that this has happened all the way up? What I mean by that is, was the specific procurement goal and its rules set out in a completely fair way? Has a project been designed to favour large organisations, or organisations with specific specialities to the point that very few people can actually bid?

Megaprojects, HS2 by its nature was always going to see big contracts go to a fairly limited pool of very large providers, you could absolutely guarantee your Arups, Balfour Beaties, WSPs, Skanskas etc would be all over it, while a similar spend on a wide spread of smaller enhancements might not, frinstance. Every procurement decision can be completely fair and yet the result can be massively prejudiced right from the initial steps.

(I can say for sure that I’ve made “fair” decisions that have been shaped before I ever got involved to the point that perfectly good contractors couldn’t be considered, and where projects have been designed around a supplier to the point that nobody else can compete. And I’ll be honest, I’ve done it too- with good reasons, but you soon figure out how to do it. Oh I need to get 3 quotes for this job I already want company X to do? Sigh, fine. Oh provider A has actually suggested something that’s a really good idea and which we’ve now funded and I have to make it look like provider B and C have a chance… None of that ever from corruption, but, if I was dishonest and someone had bunged me a little money I could effortlessly have done it, and I could have passed jobs down to other people and got them to do what I wanted in a way that looked innocent. And that at a pretty low level)

Out of interest what do you think will happen under a Labour government? no new infrastructure projects will happen or different companies will do them? If you want a big ass railway or tunnel or road upgrade the expertise pool isn’t infinite. The sector certainly isn’t blameless or perfect, hell a big Anglo Canadian name in the field has gotten themselves into potentially a world of trouble doing what you say everyone is.

you could absolutely guarantee your Arups, Balfour Beaties, WSPs, Skanskas etc would be all over it, while a similar spend on a wide spread of smaller enhancements might not, frinstance. 

I certainly think this is possible. BigCo thinking will lead to BigCo solutions – not necessarily any particular vendor, but a question that’s answerable by people that think like you. When you work in a multinational hammer, every solution looks like a nail.

I am also totally happy to believe that major private donors pay money to influence policy. And that HS2 is shit.

But TJ’s sixth form common room vision where you get a £300m HS2 contract by promising a minister a job and giving £25,000 to the party…just doesn’t bear any resemblance to reality. It’s pure bullshit.

Northwind to be fair makes some good points. iv certainly priced up work knowing I’m a box tick for a ‘competetive’ tender and conversely have written scopes with somebody specific in mind. But that’s a loooong way from bribery and corruption like some people are imagining.

In my world you have to be a lot keener on pricing for public sector than private. Margins on smaller scale public sector work are tiny compared to what we might get from equivalent private sector work.

Closest iv ever come to bribery is trying to persuade a drill crew to work past lunchtime on a Friday!

Rishi has been in various local radio interviews in the North West this morning. It was obviously a long way off Liz Truss’s absolute car crash round of interviews, but he was repeatedly asked (obviously) about HS2.

He repeatedly did what he always does and answered a completely different question, put his smiley patronising, primary school teacher tone on and started blathering on about ‘other investments’ in northern infrastructure. This seems to amount to filling a few potholes. By the sounds of it, we’re all supposed to be very, very grateful that we’re even getting that.

Its pretty obvious the call has been made that HS2 will be a white elephant going from Birmingham to somewhere in the vague vicinity of London, but he’s going to wait until after the party conferences to confirm that, demonstrating his usual level of cowardice

But TJ’s sixth form common room vision where you get a £300m HS2 contract by promising a minister a job and giving £25,000 to the party…just doesn’t bear any resemblance to reality. It’s pure bullshit.

apart from that is not what I said.  Its about influence and nudge.  Its about the things that northwind describes.

I am also totally happy to believe that major private donors pay money to influence policy.

which is the point I was making.  NOrthwind covers it well

Arrgghh – I read this again

Saw a story on my facebook newsfeed from the Torygraph about some poor rich person who’s had £500,000 of value lost from their estate.

Why does no one ever think of the poor oppressed rich people.

Its about influence and nudge.

But you still can’t describe how this actually works..? I’m genuinely curious if you have anything other than supposition and jivehoneyjive type insinuation.

I am also totally happy to believe that major private donors pay money to influence policy.

This is clearly the state of things. I used to work in providing community based eye care services and would routinely bid on NHS contracts, they were extraordinarily tight on bribery and commitment to being open about COI (noted in the minutes of every meeting). But the point still stands that the company I worked for was the beneficiary of influence to open NHS resourcing under the 2012 Lansley reforms, and to suggest that those reforms were just the work of unbiased civil servants just seems wilfully blind to the sorts of influence peddling that goes on day in day out at Westminster. We never did anything as grubby as have to employ the services of a MP to sit on our board, or hand over lumps of cash in car parks, becasue that work had already been done.

The revolving door of politicians and senior civil servants ending up at banks, or think tanks, or investment funds or whatever is naturally never referred to as corruption, it’s called the Old Boy network, or any other euphemism. But all these folks went to the same schools, they all know each other, they marry each other, and go to the same clubs…It’s obvious what goes on to get public money to the “right sort” of chaps and chapesses

Its pretty obvious the call has been made that HS2 will be a white elephant going from Birmingham to somewhere in the vague vicinity of London

This could be the issue that finishes him off. He probably thinks he’s making a ‘tough decision’ when everyone will be thinking he’s about to waste 30bn on a railway line that no one will want to use. If labour had any backbone they’d announce now that they will reverse Sunak’s decision and see it through. They won’t though because they’re in complete thrall to the ‘we don’t have any money’ myth.

But all these folks went to the same schools, they all know each other, they marry each other, and go to the same clubs…It’s obvious what goes on to get public money to the “right sort” of chaps and chapesses

In other words, the establishment. Funny though that when someone comes along to challenge that and open it up to democratic accountability people decide they’d rather the establishment stayed in charge. 🤷‍♂️

This could be the issue that finishes him off. He probably thinks he’s making a ‘tough decision’ when everyone will be thinking he’s about to waste 30bn on a railway line that no one will want to use. If labour had any backbone they’d announce now that they will reverse Sunak’s decision and see it through. They won’t though because they’re in complete thrall to the ‘we don’t have any money’ myth.

Thing is, the project got properly going in the last years of the previous Labour administration. It’s now been ploughed through the Tory heartland Home Counties (where they didn’t want it) and is being stopped before it gets to the Red Wall northern counties (which mostly do want it and do desperately need it because its the hook on which every other bit of investment has been predicated for the last 12 years).

A few years ago there was a much-heralded (and very very delayed) Integrated Rail Plan. The North was repeatedly told “you can’t have xxxx investment until the IRP is released” and “we can’t do yyyy railway improvement until the IRP is published” and “the IRP will be setting the blueprint for all your investment and rail upgrades for the next 30 years”.

The IRP was (eventually) published very late and it was met with total dismay by Northern leaders (I was in those meetings) because it wasn’t really integrated at all, it was a series of piecemeal investments, no real commitment to Northern Powerhouse Rail and the abolition of the eastern leg (to Leeds) of HS2.

And now the last little bits of IRP that were actually valuable are lying in tatters at the feet of Rishi Sunak who doesn’t care the slightest about rail cos he has a helicopter.

In other words, the establishment.

Sure, it’s another euphemism used to describe the world that @tjagain is describing. This forum was all over Michelle Mone’s dodgy PPE companies, but when it comes to engineering, it’s all whiter than white? Seems plausible 🙄

The PPE stuff bypassed “the establishment”… using the excuse of timeliness… that’s how they funnelled money to companies with no track record owned by donors. HS2 contracts bear no resemblance to that process in any way.

and is being stopped before it gets to the Red Wall northern counties (which mostly do want it and do desperately need it because its the hook on which every other bit of investment has been predicated for the last 12 years).

Thats the craziest thing about the whole thing. All these places have made long term investment decisions on HS2 and have already sunk millions into it. Rishi is so bloody stupid that he thinks ‘yeah, sorry about that. We’ve changed our minds’ is acceptable.

As Michael Heseltine said the other day, if you do that then nobody will believe a word you say ever again, and certainly won’t invest any money on the back of your declarations, because they think that you’re too flaky to be relied on. North West news were highlighting how somewhere like Crewe Council had sunk vast amounts of money into HS2 already, all of which would be wasted if it now doesn’t get to Crewe

I thought HS2 was a bonkers idea, but once you’ve started it then you absolutely have to do the lot, otherwise its just utterly pointless

Sunak has been doing a round robin on Northern radio stations this morning which has gone about as badly as expected although it wasn’t quite the Liz Truss car crash.

Radio Manchester tried to get a commitment from him about HS2 and he replied that the vast majority of people travel by car.

Now Rishi, why do you think that might be…?

Absolute cretin.

Yeah… “look at the pot holes”… is going to be part of the distraction plan.

This forum was all over Michelle Mone’s dodgy PPE companies, but when it comes to engineering

You think getting your hands on millions of masks and gowns in an emergency is the same as building a high speed rail line over a period of 25 years?

Thats the craziest thing about the whole thing. All these places have made long term investment decisions on HS2 and have already sunk millions into it. Rishi is so bloody stupid that he thinks ‘yeah, sorry about that. We’ve changed our minds’ is acceptable.

The thing I find most odd is that there is a valid debate about whether HS2 is a good idea or not (I was also on the anti side, as were many very experienced civil engineers I know), but this decision just ensures that it will be an enormous white elephant. If the tories want a £40bn monument to their craven incompetence then it looks like they’re going to get exactly that.

Especially if ‘theres no money to finish it’ comes off the back of the 8 billion quid bung to the 4% who might pay inheritance tax, which looks highly likely

You think getting your hands on millions of masks and gowns in an emergency is the same as building a high speed rail line over a period of 25 years?

No, not really. But the processes within Whitehall and Westminster that enable it most certainly are. Like I said, like yours; the company I worked for would’ve been rightly horrified by accusations of corruption and would’ve pointed to strong anti-bribery policies and so on, and honestly at our level it’s totally legitimate, but you only need glance at the links to be persuaded that there’s a network behind the scenes, and TBH if we insist that somehow PPE mis-procurement and  the mis-management of large infrasture planning must be looked at separately, then as you say

people decide they’d rather the establishment stayed in charge. 🤷‍♂️

Only today the head of JCB is being investigated for tax evasion. The Tories largest donor…Dare we call it corruption?

The headline in the Guardian after Sunaks interviews this morning

Sunak suggests fixing potholes a transport priority as he refuses to tell Manchester if it will get HS2

Heres the exchange with Radio Manchester

Jameson: Sorry, I feel we’re going off topic here and I just want to keep it focused on HS2. We’re straight-talking people in the north. It’s a yes or a no. Are you scrapping the HS2 line between Birmingham and Manchester?

Sunak: Like I said, I’m not speculating on future things. We’ve got spades in the ground right now and we’re getting on …

Jameson: But is it under review?

Sunak: Government is always making sure that we get value for money out of everything we do, but that’s just a statement of the obvious, right. But I think what people also should know, because I know there’s a lot of focus on this one thing, but actually what are the journeys that people use most in Greater Manchester or across the north? It’s in their cars, right now, getting to work, taking their kids to schools, making sure that the roads are free of potholes. That’s probably priority number one that people raise with me.

Jameson: But we’re not talking about potholes. The main story right now, across the country, is people want to know about the future of HS2. And still now you can’t give me a yes or a no. And you are the man in control. You have the keys. You can tell us now if that’s happening.

Sunak: But, Anna, my point to you is the vast majority of the journeys that people make are in their cars. Making sure that we make sure our roads are well maintained is very important.

I don’t know about you, but that sounds like the death of the HS2 link from Manchester to Birmingham to me

Yes, clearly.

From Birmingham to [hand-wavy] near-ish to London for 4 times the original cost. Well done everybody

He no longer gives a shit (if he ever did in the first place).
He’s out of here at the next general election, off to some cushy number in finance or with Big Oil and he’s just made sure that everyone remains wedded to their cars (and therefore to Big Oil) for as long as possible to ensure the profits keep coming in as the planet burns.

Notice how he doesn’t seem to have reviewed the sky high costs of the road building programme…?

I don’t know about you, but that sounds like the death of the HS2 link from Manchester to Birmingham to me

It was a week ago.

He is out to bribe voters at the election, and he hears the vocal car lobby and sees that there are votes there…

Any attempted comparison of HS2 procurement and contract awards with PPE is laughable.
HS2 is a long term delivery supported by many years of planning with checks, balances and both internal & external controls; it also has heavy oversight by the Treasury and the NAO.
Not in any way comparable with PPE – the acquisition of which was knee jerk, unplanned, uncoordinated and had panic written all over it.

tj – you are now changing your tune; first it was all about bribery and corruption but you could not provide examples with evidence – now you’re referring to ‘influence and nudge’.
To be accurate, you should be referring to ‘attempts to influence and nudge’.
You have chosen to ignore posts from people with direct experience of public sector procurement and tendering; nor have you given any weight to dovbiker’s experience in a gov department.
What you have done is indulge in tinfoil hattery and focus on posts which are not rooted in practical, relevant experience of large scale, high value projects.

Let’s ignore all the pre qual stuff and just look at the end to end tender process for large scale public sector procurement in simple terms – tenderers have been assessed as technically qualified and financially sound, compliance checks completed, tender assessment criteria have been developed and shared with all tenderers as a legal requirement, tender developed and issued – probably multi stage, tender panel established with procurement/technical/legal representation, tenders assessed against published criteria, tenderers invited to make formal presentations, required technical and financial clarifications received, further rounds of review and assessment, possible external review of assessments, evaluation report produced with recommendation on contract award supported by rationale, recommendation reviewed and approved by decision maker(s), standstill period allows for challenge from unsuccessful tenderer(s), contract finalised and awarded.

HS2 because of it’s size, profile, impacts, complexity will have been – and still is – subject to onerous oversight by the Treasury and the NAO will have been all over it

In my experience, it is normal for decision maker(s) to robustly challenge contract award recommendations but I have never been involved in a process where the recommendation was rejected which suggests – to me, at least – that the process is as fair, unbiased and honest as is practically possible.

For the record I have led procurement programmes and tenders with values upto £270 million so have, I think, some understanding.

molgrips – some of this ^^^ may help you understand how the process works (in outline) and you can then take a view on if/how ‘influence and nudge’ could come into play.

Only today the head of JCB is being investigated for tax evasion.

We’re fast approaching the point where, if you want to be British, you pay tax like the Americans do on anything earned throughout the world.

Don’t tell me you’re a patriot if you funnel income through Switzerland or any other tax haven.

HS2 because of it’s size, profile, impacts, complexity will have been – and still is – subject to onerous oversight by the Treasury and the NAO will have been all over it

Ha, ha, ha. Described in the Guardian yesterday as the management were kids with the golden credit card. Numerous managers on £150k and senior managers on 250k plus, these are de facto public sector employees.

Don’t pee on my leg and say it’s raining. It’s a symptom of who of my friends benefits if we build this, NOT what is good for the country? The latter is rigourous public spending the former is barely concealed corruption.

For the record I have led procurement programmes and tenders with values upto £270 million so have, I think, some understanding.

Have you ever lost a bid in a way you consider to be unfair and suspected outside influence?

With regarding ‘stacking’ of requirements or RFPs to influence the bid process, I think I have seen this at work. The customer has seen a product and thinks ‘oh that looks good, it does X, Y and Z that the other products don’t do’ but they still need to go through their process, so they put out an RFP saying ‘the product needs to do X, Y and Z’. Then we say ‘no’ so we don’t win the bid. A lot of RFPs clearly have lists of product features lifted from marketing material rather than actual project requirements. So it can be manipulated of course, as has been said. The real question is wether or not you really need X, Y and Z or if they just fancy the idea based on sentiment, or marketing, or some prior experience, or if you want to give business to the company that sells product that does X,Y and Z. And there could be many reasons for it. We’ve also won business for the some of the same reasons.

Clearly this stuff is far simpler than HS2 though, but of course there’s far less oversight.

sandwich – what is your point?
HS2 exec team are well paid; what’s the problem?

molgrips – I’ve been on both client and contractor sides.
As contractor, I’ve been on the losing side and, on occasion, there have been mutterings but they have been nothing other than noises from sore losers.
The usual reasons for losing are commercial (price/risk/margin), less than optimal technical proposal or programme (unacceptably long or unfeasibly short).
Unfair decisions can happen and unfair influence can be present but these are much more likely to occur in the private sector.
Large scale, high value public sector projects have multiple layers of controls which – IMO – work well.

In an attempt to stop any further attempted – and spurious – comparisons with PPE it’s essential to understand that covid related PPE procurement was undertaken using an emergency provision in the OJEU regs.

Numerous managers on £150k and senior managers on 250k plus, these are de facto public sector employees.

How does that compare with other high end jobs?

Only today the head of JCB is being investigated for tax evasion. The Tories largest donor…Dare we call it corruption?

Surely it would be much more corrupt if he wasn’t being investigated?

Every time a project like HS2 becomes a costly fiasco, we wonder why. So let me tell you: it’s clientelism from George Monbiot in the Guardian

Only today the head of JCB is being investigated for tax evasion. The Tories largest donor…Dare we call it corruption?

Well apparently being the Tories’ largest donor doesn’t get you out of HMRC investigations, so no…

Honestly, Monbiot can get in the sea at this point. On the one hand he bangs on about the environment, how we should be more environmentally conscious with our choices which includes travelling by train; but on the other hand he doesn’t want us to get trains that are fit for doing what he wants us to do.

That article is polemic, it’s of no actual use at all in terms of deepening understanding of anything. It’s no better than TJs arguments.