How to waste a couple of hundred million pounds

29th September, 2022

In between summer holidays and the arrival of a new prime minister, few people will have noticed that, by dithering for a decade, the government has quietly wasted nearly £200mn. Even fewer will have been surprised. But we should be paying attention, not just in the UK, but around the world, because this sort of waste is both ubiquitous and perfectly avoidable.

The loss in question is the result of endless changes to a plan to upgrade the 76-mile Transpennine line, a notoriously unreliable, overcrowded and outdated railway linking York and Leeds to Manchester and, by extension, Liverpool. The initial plan, set out 11 years and three or four prime ministers ago, was to electrify the line to reduce operating costs and carbon emissions. It was supposed to cost £289mn and be finished by the end of 2019. Instead, the National Audit Office says that the project is still on the drawing board. If that wasn’t frustrating enough, somehow £190mn has been spent on unnecessary work.

How did this happen? Ministers have vacillated endlessly over the specifics as personnel and budgets changed. Work was started in 2015, then paused almost immediately while waiting for Network Rail’s investment programme to be reviewed. When it restarted later that year, the aims of the project had changed: the line now needed to accommodate more passengers on faster, more frequent and more reliable trains. A further rethink committed the upgrade to laying extra track, enhancing the station platforms and introducing digital signalling.

Other commitments were not necessary for the Transpennine line itself, but designed to help it co-ordinate with Northern Powerhouse Rail, an ambitious proposal to build a new high speed line from Leeds to Manchester and perhaps on to Liverpool. This would all seem more encouraging if the high speed line had not itself been radically scaled back in late 2021.

The estimated cost for the Transpennine project has ballooned from under £300mn in 2011, to 10 times that number in 2019, before more than tripling again to around £10bn in 2021. This is not a classic cost overrun; if it was, at least northern cities would have the satisfaction of knowing the project was in progress. Instead, it’s a constant change of scope.

“The project has been all over the place during this decade,” Bent Flyvbjerg told me. He is an expert on megaprojects, a management professor at Oxford university and co-author of a forthcoming book, How Big Things Get Done. Flyvbjerg suggested a plausible explanation: a decade ago, the government announced that it would take action; it has spent the intervening time trying to figure out what action to take. He added that “the £190mn on unnecessary work could be seen as the price you pay for making announcements before you know what you’re talking about”.

If the story feels familiar, it’s because projects often unfold in this haphazard way. Anyone who has remodelled their kitchen is familiar with the temptation of rethinking the work halfway through; all too many of us know the costs of giving in to that temptation. One would hope for better from the vast, professionally managed projects that Flyvbjerg studies, but usually in vain.

Long planning periods are not the problem. Flyvbjerg argues for a “think slow, act fast” approach to large projects: explore all the options; extensively prototype, test and plan; only then, start to build, but build quickly. All too often, we start building first, and plan later. And before the planning itself begins in earnest, it is a good idea to figure out why the project is supposed to be happening. There is no doubt a plausible case to be made for investments to reduce emissions and costs, increase reliability and capacity, cut journey times and interconnect with other rail projects. But the government started not with any of those, but with the sense that it would be a jolly good idea to promise some investment up north.

“Political announcements without action, and without much thinking, are common, and not only in the UK,” says Flyvbjerg. Quite so. A few years ago, I argued that Brexit was also a megaproject, and it’s one that makes Transpennine rail look like a masterpiece of advanced planning. David Cameron held a referendum while forbidding civil servants to prepare for what turned out to be the outcome; Theresa May scrambled to trigger Article 50 before asking what she wanted to achieve in the negotiations that followed; Boris Johnson was never able to plan anything more complex than an illegal drinks party.

Over a decade late, the Transpennine upgrade finally has a budget, goals and a plan. In the interim, says the National Audit Office, “capacity for passenger services on the route has been reached, and journeys are increasingly unreliable and crowded”.

Large projects are complex and difficult, but the basic principles are not. Take your time planning. When the plan is complete, execute it as quickly as possible. Keep things as simple as you can, using repeated modular elements and avoiding eye-catching world firsts. Above all, ask yourself what you’re trying to accomplish before you start. One only has to list these principles to understand why politicians so often fail to respect them.

Written for and first published in the Financial Times on 2 September 2022.

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