A key part of their concerns is the assumptions made about how business travellers work on trains and whether shorter journeys would increase overall productivity.

The Government has committed to build the line between London and Birmingham by 2026, and then to Manchester and Leeds by 2032. The full project would cost some £50bn.

But in a report High Speed 2:A review of early programme preparation the National Audit Office has said that the Department for Transport has “poorly articulated the strategic need for a transformation in rail capacity and how High Speed 2 will help generate regional economic growth”.

It urged the DfT to carry out research into how business travellers use their time on trains, as a key part of the case rests on this but the auditors found no clear link between these time savings and improvements to the economy.

The NAO, parliament’s spending watchdog, said the DfT had “put a high emphasis on journey-time savings, from faster and more reliable journeys. “However, the relationship between these savings and the strategic reasons for doing the project, such as rebalancing regional economies, is unclear.”

It was also not clear to the NAO whether the business case submitted covered just the route between London and the West Midlands or the full ‘Y-shaped’ network to Manchester and Leeds.

“The Y-network has a stronger economic case but this is much less certain as route designs are less well-developed,” it noted.

Public accounts committee chair Margaret Hodge, to whom the NAO reports, said the DfT business case was “clearly not up to scratch…some of their assumptions are just ludicrous.

“To take just one example, on the benefits to business travellers, the Department continues to assume that business travellers do not work when on the train and to use data that is over 10 years old.”

She said High Speed 1 – from London St Pancras to the Channel Tunnel, had been supposed to pay for itself but an estimated £3bn funding gap had emerged, and questioned whether the same problem would arise with HS2.

“Unless the department gets its act together, HS2 will not deliver all intended benefits for travellers and the regions, and it will not deliver value for the taxpayer,” she added.

Auditors also pointed out that the DfT had twice made errors in calculating the project’s benefit-cost ratio and “has been slow to carry out its own assurance of the underlying analysis”.

NAO head Amyas Morse said: “It’s too early in the High Speed 2 programme to conclude on the likelihood of its achieving value for money. Our concern at this point is the lack of clarity around the department’s objectives.

“The strategic case for the network should be better developed at this stage of the programme. It is intended to demonstrate the need for the line but so far presents limited evidence on forecast passenger demand and expected capacity shortages on existing lines.”

In the judicial review, the Government faced ten challenges from four sets of claimants against phase one of the project between London and Birmingham. The Hon Mr Justice Ouseley ruled in the Government’s favour on nine of the challenges.

The High Court upheld the following key points:
• It was lawful for the Government to choose to rule out upgrading the existing rail network as it would fail to meet the Government’s objectives of providing a long-term boost to capacity and economic growth.
• Government consultations on route, environmental assessment and impact on habitats and protected species had all been carried out fairly and lawfully.
• It dismissed the challenge that the Secretary of State has fettered his discretion, and predetermined the outcome of future aviation strategy.

The one challenge which was upheld concerned property compensation. The Secretary of State will now re-run this consultation in line with the judge’s finding that further consideration should have been given to other potential compensation models.

Minister of State for Transport Simon Burns said: “This is a major, landmark victory for HS2 and the future of Britain. The judge has categorically given the green light for the Government to press ahead without delay in building a high speed railway from London to Birmingham, Manchester and Leeds.

“HS2 is the most significant infrastructure investment the UK has seen in modern times and a project the country cannot afford to do without. The judgment ensures that nothing now stands in the way of taking our plans to Parliament.

“We will now move forward as planned with the crucial business of getting the scheme ready for construction in 2017 and delivering enormous benefits for the country.

“We have listened to the judge’s comments about the property compensation consultation and to save time and public money we will re-consult on this aspect – but this will not delay HS2. We remain fully committed to fairly compensating the public who are impacted by the scheme.”

The first spur on the 211-mile route phase 2 network will stop at a Manchester airport station to be constructed between exits 5 and 6 of the M56 before then stopping at a “new station alongside the existing station at Manchester Piccadilly”.

The new Manchester airport station will have a spur to the airport and also to parts of Cheshire to allow residents of those areas to access the new high speed line.

The Leeds extension would connect to the London to Birmingham route at a point east of Birmingham and then follow the M42 north-east towards a new station at Toton, between Derby and Nottingham. From there it would go to a new station situated between Sheffield and Rotherham and then on to a point southwest of York where it could connect with the East Coast Main Line.

As with Manchester, Leeds would be served by a spur off the main line.

The Department for Transport claims that the second phase of HS2 will cut journey times between Birmingham and Manchester to 41 minutes and between London and Manchester 1 hour and 8 minutes.

As the results of the Aviation Review are not due until 2015, Heathrow has now not been included in the current route plans.

The final route is expected to be decided by the end of 2014.

The first phase of HS2 – that between London and Birmingham – is expected to be operational by 2026.

HS2 is expected to cost £33 billion.

It has promised to purchase any owner-occupied homes in the ‘safeguarded area’ (usually those 60 metres either side of the track) closest to the route between London and Birmingham at the full “unblighted” value of the property plus 10% up to £47,000. It will also establish a ‘voluntary purchase zone’ immediately outside the ‘safeguarded area’.

The Government will also establish a long-term scheme to help those who need to move during the development of HS2 but are unable to sell their homes and a sale-and-rent-back scheme for those who wish to stay in their properties which will in the future be required as part of the development work.

Simon Burns, Rail Minister, said, “HS2 will completely transform the UK. It will define our country, not just for the 21st century but beyond – linking our major cities in a way previous generations could only dream of.

“No major infrastructure project on this scale can be built without some impact on local communities, but I am determined to do everything I can to minimise the effect of HS2 on those closest to the line.

“We have developed the right compensation package, providing absolutely the right support for those affected, while at the same time protecting the interests of taxpayers. We have thought long and hard about this and the measures I have announced are fair and strike the right balance for local communities and the British taxpayer.”

The link between Birmingham and London – the first phase of HS2 – is expected to start operating in 2026.

Click on the chart to see it at full size.

Chief executive Paul Kehoe said the greatest demand in future would be for point-to-point flights to major commercial and tourism destinations, allowing passengers to avoid the inconvenience and expense of changing at crowded hubs.

His report Don’t Put All Your Eggs in One Basket came after several months of lobbying by London business organisations and trade unions to reopen the possibility of building a third Heathrow runway, something ruled out by the Coalition agreement but which could become an issue at the next general election.

Birmingham has ample spare capacity and clearly hopes to exploit the market among potential passengers who live or work in the area between it and London.

Kehoe said: “At Birmingham Airport the number of passengers could double from nine million a year today to 18 million without additional investment.

“We have already started the construction of our runway extension and when completed, in 2014, this number will increase to 36 million [allowing] us to fly to high-value new markets, including Brazil, China and India.

“This report challenges Government to draw a line under old-fashioned industry thinking. It is time to start recognising that there is more than one solution for UK aviation”

He said that even were a third runway built at Heathrow it would meet only 7% of additional passenger capacity need by 2050 and so was “not a national aviation strategy”.

The Birmingham report argued that it is cheaper to carry passengers nonstop than on any journey involving a change, and that the hub-and-spoke structures required 2% higher aircraft handling and landing fees than nonstop service to the same destinations, and 8% higher passenger connection costs.

Flights between Belfast and Edinburgh will increase from three to four on Mondays and from two to three on Tuesdays and Wednesdays. Services from Belfast to Manchester will increase from the current two to three on Mondays, Thursdays and Fridays.

Extra morning and evening flights will be added between Gatwick, Luton, Southend and Stansted and Belfast.

The new Birmingham service will start on 22 October and the expanded schedules to the other cities will become effective with the winter schedules on 28 October.

Ali Gayward, easyJet’s commercial manager, said: “Our aim has always been to make travel easy and affordable, and we remain committed to Northern Ireland. We are adding these extra flights in response to increasing customer demand for easyJet services.

“Edinburgh and Manchester are important centres for the business community.

“We operate up to 13 flights daily from Belfast to London, but demand is such that the extra morning and evening flights are essential.”

The airline will start a 12 times a week servcie to Hambirg on 2 May and a daily service to the new Berlin-Brandenburg “Willy Brandt” airport from 3 June.

The expansion comes after a record 2011 for Lufthansa at Birmingham when the airline carried 484,504 passengers from the West midlands hub, up 19% on the previous year.

Christian Schindler, Lufthansa’s recently appointed general manager for the UK & Ireland, said: “Our passenger growth out of Birmingham in 2011 proves that the vast majority of travellers still want the added value they receive from a full service airline. They know when they book with Lufthansa the price they pay includes the option to check-in online or at the airport, the ability to take a reasonable amount of luggage and they also enjoy good quality food and drink on board the aircraft, with no hidden extra cost.”

Business Zone will consist of 30 wide seats with tables, Wi-Fi and plug sockets. Passengers will pay a £20 supplement each way on top of their standard class fare. These upgrades are only available at the station or by paying onboard.

The company says the seats will offer 520mm of legroom and are 530mm wide, which it claims is bigger than any first class train service on the route. Business Zone fares will not include food or drink but these will be available at-seat.

Thomas Ableman, Chiltern Railways’ marketing director, said “Businesses told us that space to work and a decent internet connection were absolutely essential. They also told us that additional privacy at key times for increased productivity was valuable. What they didn’t value was paying over £100 extra for a sandwich, pretzels and a single glass of wine. We believe the premium economy service in the Business Zone creates a new class of travel that could signal the end of first class business travel across the industry.”