How do HS2 and other white elephants get commissioned? It’s clientelism – the subtle form of corruption.

By George Monbiot, published in the Guardian 28th September 2023

In 2010, when a high-speed rail line from London to the north – HS2 – was proposed by the outgoing Labour government, I wrote an article arguing that the numbers didn’t add up. The environmental benefits had been inflated by a series of blatant accounting tricks and concocted figures. What the government called the “business case” for the scheme was in fact a cost-benefit analysis, in which the supposed economic benefits had been amplified by outright assaults on common sense. The case for HS2 always was a baggage train of bullshit.

After reading all available documents and finding no justifications for the assumptions the Department for Transport had made, I pressed it for an explanation. After a flurry of panicked phone calls, it eventually told me there was a model for justifying its analysis, but this was “frightfully complicated”. It did not volunteer to send me a copy. The books, it seemed to me, were cooked – thoroughly and fatally.

At the time, the entire scheme was costed at £25.5bn. Now, if it were all to be built, the exchequer would be unlikely to see change from £100bn. One estimate suggests it could rise to £150bn. Think of what you could do with this money. It’s 10 times the cost of refitting all England’s schools. You could use it to build 300 hospitals or all the social homes required in England for the next 10 years, more or less bringing homelessness to an end. Or you could address catastrophic transport failures throughout the UK.

Any financial benefits, inflated and elusive as they are, will fall even further if, to contain the spiralling costs, the government announces that it will scrap the Birmingham-to-Manchester leg and build the London station, er, six miles from central London. This would cancel the time savings on which the “imaginative” cost-benefit analysis hung. It would also severely reduce the capacity of the line.

Astonishingly, there is no budget for HS2: whatever it costs, successive governments have agreed to pay. In July, the government’s Infrastructure and Projects Authority, reviewing HS2, concluded that “successful delivery of the project appears to be unachievable”.

So what do we learn from this train wreck, apart from a conclusion so obvious that even Sunak’s government appears to be pulling in at the station: any further spending on HS2 would be to throw good money after bad? What does this failure to make a realistic case, check the numbers or heed the abundant warnings before embarking on a £100bn project tell us about the state of the nation?

I think it is one instance of the endemic disease that plagues this country, a disease that withstands changes of government, democratic scrutiny and the Tories’ austerity programmes. It’s a disease whose name everyone knows in Brazil, where I used to work and learned my politics. But it is seldom diagnosed here, though it seems just as prevalent. Clientelism.

Clientelism is the subtle form of corruption. We do the blunt kind here as well: in fact, as the City of London is the global entrepot for money laundering, the UK facilitates the world’s corruption. But clientelism is more diffuse. It’s an exchange of favours, leading to the gross misuse of funds and the siphoning of public money into private pockets. But it tends to deploy a nod and a wink instead of a briefcase of bullion.

The favours can be widely distributed: a government might buy the votes of a particular interest group with pre-election handouts. Or, in the case of elite clientelism, they can be targeted at a few key players. From the point of view of this lucky few, it works like this: you (the government) provide the contracts, we (or our concierges) will help you stay in power. Elite clientelism is so prevalent, so deeply soaked into the fabric of national life, that it often seems to be as much a matter of instinct as intention.

It tends to stay within the law. Or rather, the law bends elaborately around it. Much of UK law functions as a kind of osmotic membrane, selectively allowing elite transactions prejudicial to the public interest to pass, while filtering out affronts to the interests of power.

You can see elite clientelism in all our dysfunctions. You see it in the astonishing contradictions of austerity: hobbling essential public services and slashing holes in economic safety nets while simultaneously launching a massive new roadbuilding programme, lavishing money on the arms industry, giving billions to chums for protective equipment they often failed to deliver, and permitting vast tax breaks for the rich, especially by means of the gap between income tax and capital gains tax.

You see it in the trashing of environmental protections, which happens, by the purest coincidence, to mesh with the interests of sectors that fund the Conservative party: scrapping the rules that stopped construction companies from pouring even more shit into our rivers, delaying the net zero policies that fossil fuel companies find so objectionable, and licensing, in the climate emergency, 100 new oil and gas operations.

You see it in the disastrous allocation of funds for infrastructure spending. While white elephants such as HS2 are signed off without due diligence, essential but less glamorous or lucrative projects – such as upgrading the sewerage network, or improving the rail links between northern cities, or insulating homes, or ensuring that schools don’t collapse on their pupils – are neglected. The primary purpose of most major development projects is to provide contracts for developers. If they also, once constructed, supply public services, that is a welcome but secondary benefit. The greater the ratio of private gain to public gain, the more likely a project is to proceed: poor value for public money is baked into policy.

Just as Sunak’s attacks on green policies are a fevered attempt, in the face of electoral obliteration, to curry favour with the country’s kingmakers (the newspaper barons and corporations that dominate political decision-making), HS2 could be seen as a desperate last gamble by Gordon Brown’s government, a gamble for which we are still paying. Now big Tory donors, perpetuating these transboundary political stitch-ups, are threatening to pull their funding from the party if the HS2 gravy train is derailed. This is not to say that all enthusiasts for HS2 are on the gravy train: some genuinely seemed to see it as a solution to our transport problems. But, as with all such schemes, the political momentum was provided by the lobbyists.

As always, such failed projects are considered in isolation, as instances of misrule rather than components of a pattern that persists regardless of the name of the governing party. You cannot confront something until you know what it is.