Vanity projects are like foreign wars. They ensnare politicians and drive them mad. A high-speed rail track from London to Birmingham and beyond was first sold to David Cameron in 2009 as a glamorous alternative to a third runway at Heathrow, which he had pledged never to build. HS2 was stupid then, and has grown ever stupider ever since.

This week the chairman of the national infrastructure commission, John Armitt, admitted that, to make transport sense, HS2 needs an extra £43bn adding to its budget. This budget is still fancifully put by the transport department at £56bn, but is variously estimated by the Treasury and others at £80bn to £100bn. The taypayer-owned HS2 Ltd is a classic para-statal: a collage of trapped ministers, unaccountable officials, a bottomless budget and no risk.

What is more, HS2 can pay itself what it likes. A quarter of the 1,346 staff were revealed this week as earning more than £100,000, with 15 more than £250,000. This was approved by the Treasury secretary, Liz Truss, whose boss Philip Hammond is hamstrung by having also approved HS2 as transport secretary in 2010. Meanwhile the company’s soaring consultancy bill also doubled last year to a staggering £600m, including £21m in one year on “environment consultants”. This train has already committed more than £10bn of public money to itself, without a yard of track laid. It is out of control. It makes Trident look a bargain.

When Labour’s then transport secretary, Andrew Adonis, embarked on HS2 in 2009, it was in defiance of the 2006 Eddington report, which dismissed high-speed as outdated, voracious of energy and with poor rates of return. Ministers should “avoid wasting time and money pursuing alluring new super-high-speed rail networks … that might prove difficult and unpopular to stop”. Yet HS2 was expensively engineered to go at an implausible 250mph, double the fuel-efficient maximum. Indeed the project no longer boasts its speed, preferring to promote itself as “extra capacity”, where it runs up against the stronger claims of the chronically under-invested commuter network. Britain cannot even afford modern onboard signalling, which is drastically increasing line capacities on the continent. HS2 is plain out of date.

Worse, as Armitt confirms, the new line will not connect. It will not go to Birmingham’s New Street or to central Manchester, Nottingham, Sheffield or Leeds. Almost all of its stations are in suburbs or beyond, needing car parking and improved roads. In London, HS2 will arrive at the capital’s least convenient terminal, Euston, which is neither on Crossrail nor on the Central or Metropolitan lines. “High-speed” passengers seeking Eurostar will have to trundle their bags down Euston Road to St Pancras. HS2 is truly a train designed for Brexit.

Such is the power of a private sector lobby that no minister has dared stop it. HS2 has become Concorde on wheels

The project is now starting to eat money the rest of the railway networks needs. It would make more sense to upgrade the east coast line to Scotland and link it to HS1 at St Pancras. It would make more sense to build, or at least upgrade, a line across the north from Manchester to Leeds. It would be more economic by far to improve the congested motorway network. Just 2% of passenger trips are nowadays by rail – or 8% by distance – and a minuscule percentage of freight ones. Like it or not, roads are the lifeline of the economy. High-speed rail is irrelevant.

HS2 has failed every Treasury and National Audit Office viability test. No thinktank or transport expert considers it the best use of transport money. Labour’s John Prescott and Alistair Darling opposed it. Eurostar called it “away with the fairies”. It was a fancy passed from an unelected peer to an as yet unelected prime minister. Yet such is the power of a private sector lobby for available public money – from HS2’s contractors, consultants, train builders, even the CBI – that no minister has dared stop it. HS2 has become Concorde on wheels.

Can anything be done? The answer is anything unbuilt can be cancelled. At the very least, assessments are most scathing about taking the new HS2 track beyond Birmingham. It could stop there. As for going into Euston by tunnelling under Primrose Hill, this madness has been challenged even by Adonis. Euston is so cramped that the existing tracks will have to be reduced to make way for it, defeating much of the purpose of the line. Billions will be spent, and 400 houses destroyed, while platforms for Eurostar lie grossly underused down the road at St Pancras. All this for a few minutes off a journey time.

Better by far – as Adonis has proposed – would be to cut HS2’s losses and bring it to a halt in west London. At Old Oak Common it would at least link with Crossrail, whose tunnels have been built wide enough to take high-speed trains, possibly even linking to HS1. Old Oak Common is already being promoted as “the Canary Wharf of the west”. Sensible urban planning would take the heat off central London, not add to it. There are still choices here. They just need guts from the benighted transport secretary, Chris Grayling, who must face down 15 executives, all paid twice as much as him.

The sums being squandered on this fiasco must crush the spirits of those crying out for public investment. Every year Hammond demands cuts to local buses, adult care homes, children’s centres, drug rehabilitation, libraries. It may be unfair to compare spending projects. But when austerity is the order of the day, pet ministerial projects can claim immunity. Given his treatment of others, how can Hammond defend what he is blowing on HS2? It is just a rich toy for rich boys, and he knows it.

• Simon Jenkins is a Guardian columnist