Presentation by Tom Worsley to UK Department for Transport, November 2014.

1. Institute for Transport Studies
FACULTY OF ENVIRONMENT
DfT Analysts’ Seminar 11th November 2014
Transport Appraisal – its evolution,
development and current challenges. -
Tom Worsley Visiting Fellow
ITS

2. Road appraisal – some history
1959-1963 Completion of M1 motorway and work starting on
others
Pre-war plan – no appraisal - drawn up by Civil Engineers
1963 TAL – simple comparison of free flow with current
journey times- Travel time and op costs
1967 – improved method based on speed flow relationship
using FYRR
1973 COBA – forecasting, assignment, generalised cost.
Purpose:
• Prioritisation
• Public inquiry

3. Public transport appraisal
Victoria Line – revenue didn’t increase
Foster/Beesley study 1963– time savings from a more direct
NE-SW link and some road decongestion benefits
Study completed after approval had been given
Development of urban and regional multi-modal models – late
1960s/early 70s
1974 First Central London Rail Study - Crossrail, Fleet Line –
Jubilee Line (Bakerloo Stanmore branch) built to Charing
Cross 1979
T&W metro approved 1974

4. Main line rail
Policy of continuing to provide existing services
Most investment on a minimum full life cost basis
Some attempts to apply CBA to rail closures
Increments needed to be revenue generating – PDFH
ECML electrification – mid 1980s
Thameslink phase1 -1986

5. Aviation
1970/71 Roskill Commission – location of third London airport
Full CBA – standard transport methods plus some attempts at
environmental valuation
Cublington the best option in CB terms- rejected by Govt in
favour of Foulness/Maplin, which was then rejected in
favour of Stansted
Value of Norman church. Brent Geese.
Extensive criticism of assumptions and findings – ‘Nonsense
on stilts’ – ‘horse and rabbit stew’.

6. Public Response to Transport
Schemes – some notable examples
1964 Traffic in Towns – Buchanan Report – homes kept separate from
traffic
1970 – Homes before roads – objection to proposed inner and outer
London M-way box (Ringways 1,2 & 3)
1978 Archway Road inquiry disrupted and abandoned
1988 London Roads Assessment Studies – unrealistic schemes, big
protests
1989 Roads for Prosperity: Largest programme since the Romans
1992 Twyford Down 1993 Newbury Bypass
1993 East London River Crossing 1993 Hackney M11 link
2011 HS2

7. Responses to opposition
1977/8 ACTRA Report of the Advisory Committee on Trunk
Road Assessment
Reviewed COBA and RHTM (under development)
Recommendations; (appraisal only)
• Much to commend in the Department’s methods
• Uncertainty about traffic forecasts
• Use in addition to the logistic curve extrapolatory model a disaggregated causal model
based on household survey data – show ranges
• Take full account of environmental impacts, (Jefferson environmental scores) within a
framework for assessment to facilitate comparison of options
• Environmental impact assessment to be part of the case
• Case that roads enable restructuring of the economy weak. (but such schemes often
prioritised)

8. 1985 – S56 A change to the
case for intervention
1985 – bus deregulation and privatisation
Limited grounds for subsidy to bus services – non commercial
socially desirable services.
Buses compete with LRT
So subsidy to LRT restricted to the value of external benefits.
• Manchester Metrolink - primarily cost saving when compared with rail renewal
• Sheffield – patronage forecasts not realised
• CLRS 1989 – Both Crossrails NS and EW had good economic cases but not
fundable (and recession stopped growth)

9. East London Rail Study
Options for serving Docklands
• New more ambitious development opportunity – “vision” with commercial
support
• LDDC – powers to make changes
• DLR – insufficient capacity for the “vision”
• Factors contributing to “vision” – deregulation of financial sector,
restrictive planning policy in City.
• Strong (PM) political commitment
• BCR 0.9:1
• Regeneration benefits not quantified

10. SACTRA Generated traffic
1994
In uncongested conditions, generated traffic increases
benefits
Fixed trip matrix used – simpler and ‘conservative’.
By 1990s, assumption invalidated by more widespread
congestion and widely criticised
Independent SACTRA invited to report and recommend
Adoption of VTM
Research to understand better traffic generation – Manchester
Motorway Box evaluation

11. 1996-9 SACTRA Transport & Economy
No ‘unwritten agenda’ – academic report
Many spurious estimates of ‘GDP effect’
DfT and HMT concerns with causes of economic growth and
with case for urban schemes
Recommendations
• Update appraisal values
• More valuation of environmental impacts and reliability
• Guidance on regeneration
• More work on where imperfections in transport or transport using
markets invalidated the DfT appraisal model

12. NATA/Appraisal Summary Table
and WebTAG
Response to Labour Government’s commitment – an
integrated transport policy
1998 White Paper – “A New Deal for Transport – Better for
Everyone”
Largely presentational, in format (the AST) and in form (eg
classification of landscape impacts)
Extensive consultation
Codified in WebTAG

13. Wider Economic Benefits
SACTRA recommendation – imperfections in transport using
markets
• Positive economic externalities – agglomeration – elasticity of productivity
wrt effective density, where ED is function of generalised cost
• Tax wedge in labour supply – although issues about labour supply ‘model’
• Imperfect competition – prices are 10% above costs and costs are the
metric in business time savings
Impact
• Adds up to 30% to urban scheme benefits
• Has given an opportunity for a whole range of GVA impact estimates

14. Eddington 2005-6
HMT/DfT Review - Transport’s role in sustaining productivity
and competitiveness
Recommendations more policy orientated than SACTRA –
focus on conurbations and commuting, inter-urban corridors
and international gateways
Set a strategy, identify problems, option assessment, make
better use, incremental projects, avoid ‘grands projets’
Appraisal methods sound and adopt WEBs

15. Recent developments
NATA refresh 2009
• BCR metric – denominator is DfT budget (A Coalition commitment)
• Inclusions of WEIs as ‘adjusted BCR’
• Small time savings identifed
• Redrafted, simplified guidance TAG Units
The VfM metric
• Order of magnitude for unquantifiables
• Target to reflect funding constraint
The 5 case Treasury Business Model
• Role of appraisal (economic case) in the decision making process

16. Challenges 1
A GVA metric – what does this scheme do for the economy?
• Purpose
• Inform at a local level
• A lobbying device – add up the business generalised cost sings and WEIs
• Options
• Develop new/improved models – SCGE, regional input-output, advanced
LUTI, more place specific wage equation/agglomeration models
• Survey based approaches – Transport Scotland’s EALI model, TAG A 2-2
regeneration,
• What else? A logic map, a narrative?
• Issues
• Counterfactual, displacement, non-transport investment, the ‘story’

17. Devolution
Should DfT take its hands off local transport spending?
• Issues:
• Accountability in absence of local tax raising powers
• Displacement – role of TEMPRO
• Complexity of transport networks – no clear separation of local
from national traffic
• One size does not fit all – differences between LAs in leadership
and competence
• But:
• Others want to emulate London
• Need to incentivise good local decision making

18. Targets and CBA
Is the trade off between setting management targets and
ensuring schemes and operations are underpinned by CBA
manageable?
• Network Rail;
• Targets for reliability, safety and costs, so journey time savings not
incentivised
• HLOS 2007 was aimed at crowding levels, reliability and safety, not
crowded hours
• New Highway NDPB
• ?

19. Other challenges
Estimating changes in highway supply side reliability
Resilience
Capacity as the objective – no expectation of improvement
over the present
Reconciliation of Strategic Case and Economic Case in 5
Case Business model
Pricing as a policy lever remains politically unacceptable