The headlines are there for all to see: “High speed rail scheme cost to double to £80bn, economists warn”. The government in reply said “The budget will not be exceeded”.
I am often left puzzled by headlines like this. I wonder whether there is a level of dishonesty among politicians (and senior civil servants) with the public over the real costs of capital projects.
According to politicians, there will be a big boost to the economy in the building of the railway. But, as we often see, the actual costs exceed the estimated costs. Is it optimistic planning bias? Is it politicians not being truthful?
I think it is both. The estimates are prepared in a way that makes them palatable to ministers and the public. The reality is however that the estimates are nothing more than guesstimates and the politicians have no real idea how much the schemes will run to – see our previous blog. But, there is economic benefit in capital projects so, support them they do!
Maybe a cynical view, maybe a truthful view. What’s your thinking on this issue?
Image courtesy of potowizard, www.freedigitalphotos.net image ID: 100142301