Transport: DfT modelling ‘underestimates’ value of small projects

24 January 2007
 
Small-scale road and transport projects for tackling congestion and transport overcrowding are currently significantly undervalued when being appraised for funding, modelling for a Treasury review suggests.
The Department for Transport has published the results of modelling carried out for December’s Eddington review, which aimed to capture the wider economic growth benefits, and not merely looking at the journey-time savings.
Under the proposed new appraisal, local authority schemes with relatively low benefit-cost-ratio (BCR) scores of three or less could get a ‘high’ score.
The Treasury’s Eddington review said in December that if transport appraisals included wider GDP benefits, cities with clusters of businesses crucial to economic growth would score much more highly when competing for funding.
Every pound spent on tackling traffic jams and over-crowded transport in growing urban areas and key inter-urban corridors would have an estimated £5-£10 of benefit to the economy.
Eddington’s review, ordered by the chancellor ahead of July’s tight Comprehensive Spending Review, said small projects for tackling pinchpoints and promoting walking and cycling offer ‘the very highest returns’.
Results revealed by the DfT demonstrate how capturing wider benefits – such as increasing the size of companies’ labour markets, and encouraging business clusters – would affect individual council schemes.
Nine out of 15 local road schemes which had been assessed as having a BCR of three or less – and as low as 2.3 – given a fresh assessment for Eddington’s review, gained a ‘high’ score, the same rating as for projects with BCRs of eight or more. Half of 14 local transport schemes such as interchange projects and bus improvements were upgraded. Senior county officials said the results demonstrated the value of investing in local transport.
Graeme Fitton, chair of the County Surveyors’ Society finance committee, said: ‘This chimes with what we told DfT civil servants when giving feedback on the regional funding allocation process.
‘We need to factor in the benefits to the economy. The current journey-time measure is much too narrow.’ The department appeared to accept that principle, but it needed to find a way of actually doing it, he added.
Schemes gaining a high rating for the purposes of the Eddington review included: new relief roads or bypasses for Hastings, Sheffield and Lowestoft; two new underpasses, one on Surrey’s A31 and a second on the A41 at West Bromwich; and new transport interchanges for Wolverhampton and Warrington.

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