'Fundamental questions' remain over infrastructure appraisal, report finds

 

Researchers have called for ‘urgent’ work to develop new methods of evaluating infrastructure projects, after questions have been raised about the impact of transport and highways spending on economic growth.

A review of investigations into the economic impact of transport projects has said ‘much more’ needs to be done on understanding the effect of infrastructure developments on local growth, with ‘fundamental questions’ remaining about scheme appraisal and prioritisation.

The study by The What Works Centre for Local Economic Growth (WWG) considered more than 2,300 policy evaluations and evidence reviews from the UK and other OECD countries, finding 29 impact evaluations that met its minimum standards.

Researchers found both rail and road projects tended to have a positive effect on property prices yet this was dependent on distance to the project and could vary over time.

There was also some evidence of road projects having a positive effect on wages, incomes and productivity. However the study said the majority of scheme evaluations showed such projects had no or mixed effects on employment.

In a potentially damaging conclusion for the Government’s flagship HS2 project, researchers found little evidence as to whether large-scale projects - such as high speed rail or motorway construction – offered a greater impact on economic growth than spending similar amounts on a collection of small-scale projects.

The report added that there was not yet ‘clear or definitive’ evidence to support the claim that new transport was a cost-effective way to stimulate economic activity.

The WWG said it was now ‘vital’ that progress is made on ‘filling in the evidence gaps and in improving our understanding’ surrounding the impact of transport investment.

‘Much more empirical work remains to be done on understanding the impact of infrastructure improvements on local economic growth. The economic benefits of transport infrastructure spending – particularly as a mechanism for generating local economic growth – are not as clear-cut as they might seem on face value,’ the report said.

‘In turn, this raises fundamental questions about scheme appraisal and prioritisation and about the role of impact evaluation in improving decision making around transport investment.’

Surveyor's Highway Management conference will take place on September 23rd and 24th in Manchester. To register go to: www.highway.surveyorevents.com

 

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