KPMG to face MPs again over HS2 report

http://www.theguardian.com/uk-news/2013/nov/11/kpmg-hs2-mps-forecast-report

Consultants to defend forecast of £15bn economic boost following claims that calculation was ‘essentially made up’

Consultants KPMG will again be called before parliament to defend their report into the regional benefits of HS2 which claimed the high speed rail line could boost the economy by £15bn a year.

Last week leading transport economists told MPs that they believed a key calculation behind the figure was “essentially made up”.

The Commons transport select committee is summoning representatives from KPMG, and the transport secretary, Patrick McLoughlin, to answer its questions on the high speed rail project in the light of “significant new information”. The hearing is scheduled for 26 November.

The committee, which broadly supported building HS2 in a 2011 report but said there were still questions over its economic basis, is reopening its inquiries after the government issued a fifth Strategic Case for HS2 in late October.

The Department for Transport’s strategic case included figures from a KPMG report, commissioned by HS2 Ltd, into the potential impacts of HS2 on the economy at a city and regional level.

It said: “The results of the analysis suggest that HS2 could increase economic output by £15bn per year. Even with more cautious assumptions the annual benefit could be £8bn.”

At a Treasury select committee hearing last week, the KMPG partners behind the report said their work was robust and stood by the £15bn forecast, despite admitting it did not have a firm statistical foundation.

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